Daily, I’m asked by well-meaning friends, family, and strangers at the gym who somehow learn the nature of my work, if I’m scared for the future of retail.
Asking if I’m scared for the future of retail is like asking if I’m worried about fluctuating gas prices, or the rising cost of food, or even if I think it’s going to rain at my nephew’s 7:00 AM late-season soccer game this weekend. You just can’t always predict the outcome of a future event when you’re still firmly planted in the present.
I am well aware of the conversations surrounding the industry –the forecasts and opinions of respected thought leaders, business analysts, economists, and even fear mongering journalists. But the reality is, retail’s transformation is something that was to be expected. There is nothing unnatural about it.
Recently, I came across an opinion column written by college lecturer, Derek Larson, for the Saint Cloud Times. In his analysis of holiday shopping trends and the future of brick and mortar retail, he began discussing the innovation of the department store and what that would have looked like to those in the 19th century. He went on to say,
“The innovation of the department store –and its rural cousin the mail-order catalog – was the key to consumerism. Customers shopping for one item were exposed to many others in the process, learning to develop wants in addition to needs.”
In our current society, the same effect is happening, only with the technological revolution. Consumers have more needs and wants than we could ever imagine, but now their accessibility – in terms of availability, choice, and speed – have been radically revolutionized. The ways in which they learn about, research, shop, and purchase products is completely unprecedented. So naturally, as consumer technology use and the rise of online shopping become more and more common, people make the logical assumption that brick and mortar will die. And in some cases, certainly in some markets, that is true.
But what some believe, myself included, is that it’s still early enough in this transformation that smart brands, retailers, and industry suppliers can harness this new environment and control its outcome. Neil Thomas, VP of Axis Display Group, puts it this way:
"The path to purchase used to be very linear. Now, it takes on many shapes - but what we know is that there is going to be a dance between conventional brick and mortar and technology. This dance can be a ballet or it can be a mosh pit, depending on what we know about the customer journey and what we do with that information."
Nobody knows for certain where technology will be in five years, 10 years. It’s senseless to simply accept the demise of an entire sector of commerce instead of adjusting and adapting to the new environment.
Brick and mortar stores may have to die as we once knew them, but their necessity will likely never cease to exist. There are countless articles and research reports explaining how in order to be competitive, physical retail locations will need to change strategy, not close up shop.
Instead of simply providing a structure with shelves and aisles and racks to display and sell products, some brick and mortar stores will likely begin to take on new purposes in consumers’ lives. Stations or sections of the store may be transformed into “brand centers” – places where people can test, demo, or compare products. Spaces may temporarily serve as meet-up locations hosted by the store for customers with common interests or questions. “Experiential” retail will become “retailtainment” – stores are no longer just for shopping, but for community, education, and entertainment.
Consider the opportunities this way of thinking lends a sporting goods retailer. Store layout could be organized by activity or interest, showcasing products, but also creating areas for additional brand exploration. The water sports section now includes a projector screen with lounge seating where monthly a brand influencer or sponsor hosts a webinar, interview, or documentary about their real-life product use. Consumers receive a sample, gift, or discount for their participation in the event. Perhaps in the product testing (consideration) phase, virtual reality goggles are provided so consumers can experience the agility of a particular white water rafting boat on a simulated course particular to that store's geographic region.
Across the store, where athletic shoes and boots are sold, in-store technology such as a smart kiosk equipped with motion tracking and augmented reality, is setup to analyze a shopper’s gait, arch type, and foot size. Nearby, multiple “hot” test surfaces such as turf, linoleum, concrete, gravel, and pavement are available for shoppers to try on and compare whatever results the kiosk suggested. Perhaps they are given in-store tablets to use so they can easily rate and track their opinions about each brand and product and have the results emailed, printed, or texted to them. They can choose to buy site on scene, or go home and price compare. It’s possible the retailer has already forged a partnership with an online retail giant, so price protection and overall satisfaction levels are preserved.
The consumer could have easily gone online and made a purchase, and some will always choose to do only that, but the new brick and mortar is not necessarily competing with that type of transactional shopping. The new brick and mortar will be about creating brand experiences that make brand loyalty a no-brainer.
When you begin to think about brick and mortar this way, the options for physical retail are not limiting, but endless. Technology can be harnessed in any industry with any product in any setting, whether it’s a product display at Walmart or flagship showroom for T-Mobile.
Contact one of us at Axis to discuss the state of retail in your industry.