Brick and Mortar Retail is Not Dying
Traditional retail has never been a sexy industry to work in. But the days of associating retail with unloading endless trucks and staffing an abundance of cashiers are over.
Facial recognition, augmented reality, AI, and machine learning now regularly impact our lives, including which brands we choose to throw our money at, and how exactly we do it. That being said, there has never been a more exciting time for the retail industry (and the consumers who get to grab a bucket of popcorn and watch the competition unfold).
It's the most challenging time for retailers and brands striving not only to attract and keep customers, but meet the rapidly increasing consumer demands and expectations. While brick and mortar enterprises like Walmart, Target, and Best Buy attempt to remain competitive in the retail industry, combatting digital retailers like Amazon and Apple, brick and mortars are forced to create innovative experiences for consumers through the latest technology trends.
Small biz genius recently compiled a number of consumer behavior statistics from sources such as Statista and Research Gate. According to their findings, 55% of Americans begin their product searches on Amazon. Most notably, over 60% of millennials and generation Z-ers are likely to complete transactions on their mobile devices, and as many as 18% of local searches lead to a sale within 24 hours.
These stats are frightening for retailers who haven’t successfully tapped the digital realm of retail like the J.C. Penney’s and Footlockers.
According to Forbes, traditional retail stores have existed for five reasons: inspiration, immediate gratification, convenience, and taction (the idea of touching, feeling, trying products on, i.e., getting help or confidence in a purchase), all combining to create the 5th reason, experience (such as the memory or social delight of being somewhere). While online retail strategies, such as Amazon’s same-day shipping of virtually any product you might need definitely takes the cake in the convenience category, in-store retail still has a place in the market if brands can tap into these other four areas (inspiration, immediate gratification, taction, and customer experience).
“..in the end, it all comes down to experience—the social joy of being in physical places. For department stores to right the ship, it will take wholesale changes in their business models away from just inventorying their four walls solely for products. It will take sifting through years and years of business model debt—architectural debt, technological debt and cultural debt—to come out clean on the other side and to imagine something completely new.”
Interactive kiosks and instant gratification
Some emerging trends that we’ll be covering in an upcoming CCW special report include removing long checkout lines with scan-and-go capabilities, using smart shelving and in-store robots for inventory control, and providing product customization to lure in-store traffic. Ralph Lauren does exactly that with their in-store holographic experience for designing individualized polo shirts. Store visitors could select designs from a tablet and see it represented in holographic form, leaving with the precise amount of desired “clout.”
According to Annex Cloud, Australian clothing retailer, General Pants Co, “has installed interactive kiosks in its store to bridge the gap between online and offline shopping experience. They have imitated many social media interactions with their “Insta-opinion” function, which allows customers to photograph themselves wearing or holding up an item from the store. Then those photos will be submitted in real time to get feedback from other kiosk users a thumbs up or down.” Tapping into modern day consumer’s desire for instant gratification and social feedback has proved successful in social media campaigns, so why not retail?
Monitoring consumer moods for customization
Japanese retailer Uniqlo recently launched its first “neuroscience” fashion campaign. Based on the concept of suggesting clothes to the customer on his or her mood, UMood, a wearable technology, is placed on the foreheads of customers. A “series of images and videos were shown to them. The brainwave reading provided by the customer’s psychological reactions was placed against an algorithm that then suggested a t-shirt from the retailer’s range to match the consumer’s state of mind. Those different states of mind were categorized as ‘adventurous’, ‘calm’ or ‘stressed.’”… talk about knowing your customer. Consumer behavior is a subject that has been studied for decades. But knowing the immediate mood of the customer in order to tailor personalized products is an unprecedented metric that we now have the technology to measure.
Measuring store traffic with mobile apps
In addition to consumer-mood and scientific algorithms, instant gratification kiosks, or holographic customization tools, in-store mobile applications are also becoming increasingly important for in-store traffic and revenue forecasting.
Retail merchants with physical spaces not only need a sense of their online metrics like SEO and click-through-rates, but also in-store analytics, a metric that has always been easier to track online. RetailNext is an in-store analytics retailer app that pulls together the full set of information brick and mortars need to make intelligent business decisions.
RetailNext displays traffic, dwell times, and point of purchase. The surveillance software allows retailers to view the heat maps of visitor traffic and measure clusters of customers over time in and near the store. The app uses online data points and map metrics to help business owners and store managers understand digital shopping behavior, giving actionable intel for marketing and advertising strategies through an omnichannel experience.
Accessing customer data with mobile apps
Part of that omnichannel experience for brick and mortar retailers looking to remain competitive includes managing PR and online reviews; one of the most effective platforms is Google My Business, with Q&A features, options for booking appointments through landing page redirection, and Luna Metrics to help you measure visitors, leads, and ROI for Google Posts.
According to Retail Experience, “95% of shoppers read online reviews before making a purchase. This makes it the most widely used source for research. Faced with these uses, monitoring opinions to be able to respond to them becomes essential. A negative comment left unanswered, can quickly have negative impacts on the brand and 96% of Internet users are influenced by the presence of negative opinions during a purchase, making it essential for retailers to effectively manage Google My Business.”
44% of local businesses are already registered for free, with reviews directly visible in search results.
Whether it’s tapping into Gen Z’s addiction to instant gratification through a rating system on kiosks, hologram customization for individualized apparel, personalizing products through neuroscience algorithms, or mobile apps measuring foot traffic and brand reviews, brick and mortar retailers need to go above and beyond if they want to continue compete with the convenience of online retailers like Amazon.
(Image Credit: Best Buy)
Traditional retail has never been a sexy industry to work in. But the days of associating retail with unloading endless trucks and staffing an abundance of cashiers are over. While consumer expectations and technology capabilities simultaneously increase at an exponential rate, the key for retailers to remain competitive is agility. The speed at which brick and mortar retailers are able to adapt and innovatively utilize tech trends will create the best-in-class experiences for the customer, remain competitive, and at the very least, continue to exist.