November 18, 2014
In early rounds of bricks-and-mortar retail versus ecommerce, ecommerce – supported by disruptive innovation and nowhere to go but up – won handily. There were a few exceptions.
Technology retailers such as Apple and Microsoft smoothly transitioned brick-and-mortar locations into highly digital marketplaces. On the back of this, the apparel industry recognized this adapt-or-die scenario and, now, online consumer touch points are table stakes in the category, with hundreds of designer labels conducting business through Net-A-Porter, the online magazine format that pioneered ecommerce for the fashion industry.
Even so, new threats loom on the horizon. Retailers that survived this market shift must design a clear roadmap, using both technology and unique bricks-and-mortar advantages to embrace the threat of ecommerce.
Many retail executives continue to ask themselves: How much longer can bricks-and-mortar stores survive? However, smarter retail leaders are asking: What do we need to do to not just survive – but to thrive?
To address this, best-in-class retailers are adopting three strategies to embrace ecommerce.
1. Immerse yourself or lose yourself: Differentiate with experiences that compel shoppers to think beyond their devices
Seeking strategies to stimulate consumers in meaningful and different ways, many leading bricks-and-mortars have invested in interactive displays and kiosks to create fully immersive experiences for consumers.
The displays are designed to take customers on unique shopping adventures that create special engagements with the brand, exceeding the transactional components of the business.
Nike is a prime example of a brand that has integrated digital and mobile capabilities into its in-store customer experience.
The brand’s showcase store in London, the NikeFuel Station, has floor-to-ceiling LCD motion-sensing walls with digitized reflections of customers – an experiential tool that builds memorable associations with the brand.
The Nike store also features augmented reality tools and interactive touchscreens that provide animated product information to shoppers, while footage of “digital mannequins” plays around the retails space, featuring items available in the store.
Brands that follow this movement will be able to offer their shoppers a new level of intrigue and delight, delivering unique brand interactions that are not possible through a computer screen.
2. Personalize to win: Uniquely tailor relationships with customers across all touch points
To win in today’s hyperactive shopping environment, many companies are creating more in-store human experiences, exposing the impersonal nature of online shopping. These companies recognize that personal connections are crucial to building brand loyalty.
While adopting a customer-centric focus is not new, the expansion of impersonal online shopping has presented bricks-and-mortar stores with a fresh opportunity to develop more meaningful connections with customers.
Recognizing this opportunity, many stores have introduced personal shopping assistants to affordably and accessibly de-digitize the shopping experience. This approach has been implemented successfully through Apple’s Genius Bar where often confused and frustrated customers have the opportunity to resolve computing issues in person with expert Apple technicians.
Humanizing computer troubleshooting has played a pivotal role in the Apple’s bricks-and-mortar success and has compelled other brands to imitate the Genius Bar model.
J. Crew is following suit with a recent re-launch of its personal shopper program that focuses on meeting the customer’s needs with a similarly meticulous level of attention.
These consumer-centric efforts not only build awareness by attacking ecommerce in areas where it inherently cannot retaliate, but also by creating personal connections with shoppers that build brand loyalty.
3. Omnichannel 2.0: Leverage online and mobile technologies to drive traffic in-store
With the adoption of smartphones and tablets – led by an increasingly digitized millennial consumer – many retail executives are looking for ways to leverage mobile technology to drive traffic to their bricks-and-mortar locations.
For example, Barneys New York has integrated tablets and smartphones into the mechanics of in-store point-of-sale transactions. It is noticing improved customer experience and satisfaction in stores where this has been piloted.
The recently launched smart phone app ASAP54, which digitizes the bricks-and-mortar shopping experience, is another example of this convergence.
Dubbed the “Shazam of shopping” by many in the industry, users can snap photos of their favorite in-store outfits and find the product and others like it online.
Instead of viewing this as a competitive threat, retailers including Barneys New York and J. Crew are embracing this technology to drive competitive advantage and push traffic into their stores through quick links and tags within the app’s interface.
Evidence of this, the digital channel, if harnessed correctly, is a powerful mechanism for retailers to create new forms of engagement to satiate tech-savvy shoppers and drive them in store.
Embracing change to win
The continued thrust of ecommerce into the bricks-and-mortar space undoubtedly marks a compelling time for retailers, since technology continues to drive traditional shopping experiences into new territories.
However, while the bricks-and-mortar store will always be a part of the consumer’s repertoire, it needs to be refreshed to avoid the decline seen in music and video retail industry counterparts – who shunned rather than embraced the technological revolution.
Embracing this change, and ultimately, moving from reactive to proactive in the adoption of digital innovations will enable the development of new types of in-store experiences.
These new forms of engagement are set to create buzz, drive traffic and ultimately dispel the notion of the dated and less convenient bricks-and-mortar store.
This marriage of retail and digital will restore the balance of power for bricks-and-mortar stores and unleash a new world of opportunities for the leaders willing to innovate and integrate.
Kevin Thompson is vice president of customer experience and development at Barneys New York, New York. Reach him at firstname.lastname@example.org.
Pierre Dupreelle is senior partner and head of strategy at Millward Brown Vermeer, New York. Reach him at email@example.com.
Dan Ensslen is director at Millward Brown Vermeer, New York. Reach him at firstname.lastname@example.org.