To a casual observer, it might appear that brick and mortar businesses are dwindling as the world continues to consume more online. Yet the increase in closure rates may more indicative of changing customer expectations than a decline in retail sales more broadly. Tired, boring store experiences are dead, but intelligent brick and mortar stores can provide rich experiences that complement and add value to their experiences online.
We only need to look to Amazon’s multi-billion dollar acquisition of Whole Foods, Warby Parker, Allbirds or Glossier to see how successful online businesses are investing in physical, offline experiences. KPMG’s Global Retail Trends Report for 2018 predicts that by 2019, 90 percent of all retail will still be done in physical stores. Iconic retail brands like Apple and Costco continue to succeed, relying mainly on brick-and-mortar stores.
Technology no longer serves just to offer an alternate experience, it’s now being used to bridge the best aspects of the online and offline worlds. At Burberry, customers can check out from the in-store couch and QR code shopping ‘stores’ are popping up all over the world. In recognition of the fact that almost 80% of shoppers will go in store when they have an item they want immediately, Google has added a number of new tools to boost the brick and mortar experience for shoppers. Where trust or security is important, such as with banking, brick and mortar outlets are particularly essential. A Bain & Company study shows how a number of leading banks are creating flagship branches that serve as showrooms for certain product sales and places where customers can get trusted expert advice.
So what defines an ‘intelligent store’ versus a gimmicky one? First and foremost, intelligent stores or venues alleviate traditional customer pain points such as long lines or out of stock items. The result of this is increased customer engagement and ultimately profitability.
Technology can also allow brick and mortar businesses to further leverage their unique opportunities (the ability to try products/services, instant gratification) combined with the benefits of online technology (personalization, price transparency). Innovations such as customer recognition technology or kiosks that allow customers to transact and provide feedback can help brands meet the heightened customer expectations that have developed through online shopping experiences.
Rather than simply measuring sales per square foot (or RevPAR for the hotel industry) leading brands should take advantage of their physical spaces to maximize experiences per square foot and real-life interactions. What other complementary experiences could you offer on-site? How could you further personalize customer experiences, or build on them to generate a new type of loyalty that isn’t centered around point schemes? Or what partnerships can you form to bring external services onto your premises (such as food delivery) from other known brands?
The expanded view of the customer experience usually involves an increased focus on services – just look at Apple’s Genius Bar, or Sephora’s makeup tutorials. These extra interactions lead to increased dwell time, greater human connection and experiences that could only be had by interacting with your customers in person. Indeed, it’s not the demise of brick and mortar business we are seeing, but rather a revolution in customer experience and a golden period for brands that understand what customers want.
Learn how Local Measure’s suite of products help brick and mortar businesses understand their customers better and deliver true omni-channel experiences.