RetailNext: Stores not dead but do need to be reinvented
Despite the growth of online shopping, brick and mortar stores are still critical to retail success.
“Retail stores are not dead,” said Shelley E. Kohan, VP of retail consulting at RetailNext Inc. “The retailers who continue to embrace change in their business models will be well positioned for today and in the future."
With digital shopping behaviors firmly established and store sales continuing to decline according to the company’s latest Retail Performance Pulse report, many brands in the United States are crippled with too many stores and too much space, according to Kohan. Consequently, “it's critical for stores to be reinvented in order to blend seamlessly with a brand's established digital touchpoints,” she explained.
Kohan cited the case of formerly online-only brands such as Amazon, Warby Parker, Bonobos and Rent the Runway that have opened brick-and-mortar stores in the last two years, resulting in profitability and low-cost customer acquisition.
"This is not a case of 'build it and they will come.' Instead of opening stores in areas where traffic needs to be driven, brands should invest in building out attractive stores in areas that already have high traffic,” Kohan advised. “Use the traffic-driving budget instead to deliver an exceptional in-store shopping experience and market toward shopper retention and loyalty.”
Also, the same actions toward addressing shopping trip abandonment online need to be applied in-store through customer service to eliminate friction points for the customer and achieve higher conversion rates.
“While each shopping touchpoint, digital or physical, has its inherent advantages, none will ever be able to do it all alone,” Kohan said. “The reinvention of stores to integrate with online platforms is essential to a brand's future success."
Arts and crafts retailer uses Wi-Fi to target in-store shoppers
Jo-Ann Fabric and Craft Stores thinks it has found a way to make each mobile shopper’s store visit unique.
The crafting retailer is targeting mobile shoppers that “opt-in” to use its new in-store Wi-Fi network with unique coupons, according to Ad Age.
The report said that Jo-Ann Stores is combining the Wi-Fi connections and shoppers’ Wi-Fi registration data. As a result, the retailer can monitor shopper behavior, create digital identities that link shoppers' physical in-store visits to other data, and deliver real-time communications and pro-motions during future visits.
The chain recently enabled Wi-Fi in all of its 850 stores across the U.S,. Ad Age reported.
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Study: Retailers need to empower their workforces, realign skills to succeed
The increasingly digital customer is impacting the evolution of new, distinct store formats.
As stores transition to new concepts by 2020 and beyond, so will the roles of store associates, according to new research from Avanade and EKN Research. Avanade surveyed 161 global retail executives across various retail segments to understand the driving factors of digital and workforce transformation in the industry.
As digital retailing evolves, there will be significant shifts required to create a digital workplace if retailers want to stay relevant. Yet, retailers appear to be lagging behind in getting their workforce ready for what lies ahead, with most indicating very little change in how store activities will be allocated in the next few years, the report revealed.
For example, 60% of retailers believe stores will transform from a focus on traditional sales to more theme-based stores focused on attracting specific customer segments, with 56% expecting stores to perform as online fulfillment centers. The main factors impacting this evolution were identified as changing customer expectations, continued negative same-store sales and the exponential growth experienced by digital channels.
Despite these anticipated changes, retailers expect employees to work much the same as they do today. However, this is a stark contrast between retailers' vision and their ability to realize it. For example, retailers do not plan to have store employees increase their emphasis on customer-facing activities in the next few years even though they foresee a push toward more theme-based retail concepts.
"Retailers must rethink store activities and seek technologies that improve the customer experience and enhance their workforce," said Barry Givens, retail solutions lead at Avanade.
“For example, 52% of retailers plan to use augmented reality and robotics in their stores in the next one to two years, and it's important to understand the impact of those technologies on the workforce,” he said. “Digital tools that help train staff and provide personalized employee experiences are just as important as those that engage the customer.”
Respondents did note that a more prepared, empowered and engaged workforce could improve consumer satisfaction, stock availability, online and in-store sales, and store operating margins. Meanwhile, transitioning to a true digital workplace will increase employee engagement and productivity, particularly as millennials become a bigger part of the talent pool.
This will require retailers to provide fast, agile training to maximize performance, especially among the growing temporary workforce. They must also adopt automation at store level — and not just smartphones. They also need smart merchandise, wearable devices, augmented reality, POS tablets, among other solutions, the report said.