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Retailer stores are in a state of turmoil.
Traffic is in sharp decline and it’s dropping faster than solutions are being executed.
More importantly, many of the strategies that stores have implemented are woefully ineffective. From digitizing the store experience to beacon technology, the results are weak.
So what’s the answer? Are stores to continue being cannibalized by eCommerce? Can brick-and-mortar make a comeback?
The answer is probably both--if store teams begin to think like their digital counterparts.
If we look at market share across channels, there’s only so much that can go around. If ECommerce is 20 – 30 percent of the market, it means that those dollars are taken out of stores.
Retailers need to brace themselves for a new reality in which stores are not the primary medium for commerce. And that brings us to innovation.
Store models have been roughly unchanged for decades. Yes, there have been some advances, but the model holds roughly the same compared to any other industry.
If stores want to drive traffic, they need to truly re-imagine the in-store customer experience. Enough with the minor changes; just adding a digital monitor isn’t going to cut it. Bringing the online experience in store? Great, it’s a step forward, but why does the customer choose stores over eCommerce if it’s the same experience?
The truth is stores can’t beat third parties on price and they can’t beat eCommerce on convenience. The paradigm has shifted and stores are in the middle of a fight that’s been going on in every other channel for the past decade. It’s just time they realized that.
You want customers to come to the store? Give them a reason to drive to your location for product. The urgency to adapt is about as high as it’s ever going to get.
One CPG retailer is taking the urgency to heart. Walgreen's is testing into virtual overlays on their product shelves through a 3D camera. Through the advanced in-store experience, customers can identify products quickly on shelves and even see products that are on promotion. Customers can get in-and-out quickly and save money in the process.
Perhaps the most disruptive test is from none other than Amazon. That’s right, the most innovative store models are emerging from the world’s best ECommerce site.
Amazon’s new approach to grocery stores is both heralded for its adaptation and ridiculed for its break from the old model. Customers in the new format don’t have to check out, they can simply walk out of the store and still pay for their groceries. Who knows if it will be successful, but if anything is consistent, it’s that change wins in today’s environment and the status quo fails.
In their current state, retailers have two options for stores. They can become mini, omni-channel distribution centers, or they can evolve and revamp the store experience from the ground up. The future is most likely a combination, with most stores stocking some product for omnichannel orders and other retailers pulling back and reducing their store footprints. Both of those strategies will help, but the remaining stores need to be rethought.
Retailers need to think like their ECommerce counterparts, consistently endeavoring to rethink the customer experience with a test, refine, repeat approach. The store experience used to be special. It was an integral part to our interactions with friends and family.
It can be that again, but stores need to go above and beyond.