Why Augmented Reality Isn’t the Biggest Trend for Retailers This Year
If you’ve set foot on any retail trade show floor this year, you’d think every consumer in the United States was demanding a retail experience enhanced and in some cases even defined by augmented reality. But as those of us in the trenches know, augmented reality is far from a reality – in large part because consumers aren’t ready for it.
As further evidence, even for those consumers who do want to dip their toes into AR, consuming augmented retail experiences aren’t the first use cases on their minds. Instead, they’d like to use AR to learn about places they might like to visit, or to master new skills and techniques, according to a study released at CES this year.
While continuing to adopt new technologies to evolve the digital experience for shoppers is crucial, the foundation of the future of retail lies instead in how we look at and leverage the physical realm to deliver experiential purchasing experiences. In that light, retailers can borrow many lessons from the ways in which developers and the stores within them have approached the creation of so-called “live, work and play,” spaces.
From New York’s Hudson Yards, to the redevelopment of a naval air base in suburban Weymouth, Mass., building mini cities and neighborhoods where people can live, shop, and in some cases even work are driving forces for continued growth in commercial and residential development. The lessons for retailers here extend beyond simply being in the spaces, to applying the very model of “live, work and play” that underpins them in developing their experiential retail strategies. It’ll pay off.
According to a report from Global Data, centers that had services beyond the goods themselves drew more visits and a higher average spend per visit, 18.9 visits per year and $142 per visit. That’s compared to 10.2 for shoppers using a mall without a strong non-retail offer, spending on average $54.
A classic example of this is Ulta, the fast-growing chain of beauty stores in the white hot health and beauty space. Its beauty products are organized into higher and lower-priced categories, and the brand augments these with in-store services such as hair, skin and brow treatments.
But beyond offering traditional services alongside products, innovative brands are looking at ways to partner to bring the store, and as a result the brand, to places or people that make perfect sense, but which haven’t up until now been explored.
For example, J Crew recently partnered with WeWork, which provides shared office and co-working spaces. In WeWork locations around the country, J Crew opened pop-up shops to sell items from its spring collection, while also hosting panel discussions on topics like entrepreneurship and goal-getting In turn, it featured WeWork members in its catalogue modeling J Crew clothes and items, aiming to highlight the diversity of the WeWork community.
Seeing, and reacting to, the emotional customer response is something that not even the most advanced augmented reality or even digital strategy can replace. And it is why the store will continue not only to be relevant, but a key piece of every retailer’s growth strategy. Retailers that partner and innovate to deliver experiential retail strategies will engage and delight customers, and not only survive, but thrive because of their irresistible in-store experiences.
Matt Rhodus is director & industry principal, strategic initiatives, Oracle NetSuite.
Starbucks opens store made out of shipping containers
Starbucks has gone modular in Taiwan.
Starbucks Taiwan opened its first store in Asia Pacific built from recycled shipping containers. The new outpost is in eastern Taiwan, in Hualien Bay Mall, in Hualien City
Starbucks recycled 29 used shipping containers to form the structure of the store, which is approximately 3,200 sq. ft. and two stories tall. The exterior design was brought to life by famed Japanese architect Kengo Kuma, who is also the exterior architect for the upcoming Starbucks Reserve Roastery in Tokyo. This is the first time Kuma has used shipping containers for his designs, and he was inspired by the foliage of coffee trees combined with the traditional Chinese bucket arch. The stacking of the containers created a much taller structure and provides natural sunlight through the various skylights found throughout the structure.
The interior of the geometric space features a tribute to the culture of Hualien, with a brightly colored wall mural that represents the aboriginal Amis peoples with deep heritage in the city. The containers are fashioned to create warm and comfortable seating areas. From one end of the container, customers can enjoy views of the mountain range. The other end is decorated with graphics that tell coffee stories.
In the United States, Starbucks has opened 45 of pre-fabricated modular stores, built off-site prior to delivery and installation, creating an opportunity for the company to extend into sites not designed for traditional store locations while minimizing the environmental footprint generally associated with new buildings. The formats also allow Starbucks to reuse reclaimed materials throughout the design.
Starbucks is committed to building sustainable stores and recently announced the “Starbucks Greener Stores,” which will be a framework to design, build and operate sustainable stores around the world. Today, this store joins a suite of Starbucks locations built from shipping containers.
First Look: Nordstrom gets more ‘Local’ with two new locations
Nordstrom is doubling down on its no-inventory store concept — and adding a couple of twists.
The department store retailer is adding two more Los Angeles locations for its Nordstrom Local format, with one opening in Brentwood (photos above) on Sept. 28, and another opening downtown at The Bloc, on Oct. 12. Both stores will be furnished by Anthropologie Home, which is collaborating with Nordstrom to outfit the stores with the latest in home goods and accessories. (In March, Nordstrom announced a deal with Anthropologie to introduce more than 200 items from Anthropologie Home at 15 Nordstrom stores and on its website.)
Similar to the first Nordstrom Local, which opened in October 2017, on Melrose Ave. in Los Angeles, the new locations will offer consultations with personal stylists, buy-online-pick-up-in-store service, alterations, curbside pickup and returns from Nordstrom.com and other online third-party retailers.
In addition, the stores will feature Trunk Club services, refreshments and fancy gift wrapping in partnership with Paper Source. Each of the Nordstrom Locals will also offer dry cleaning services in partnership with a Los Angeles-area dry cleaner.
But Nordstrom Local is not a one-size-fits-all concept. Instead, the stores are tailored to meet the needs of customers who live nearby. The approximately 1,200-sq.-ft. Brentwood outpost is focused on styling and alterations. It features a feminine ambience, with copper lighting pendants, curved furniture, soft lights, white walls and wood accents. Natural light floods the space during the daytime.
The approximately 2,200-sq.-ft. downtown Los Angeles store, will offer an on-site concierge and barber services in partnership with Baxter of California, as well as shoe, handbag and luggage repair services in partnership with a local cobbler. Customers will also be able to purchase grab-and-go food at this location. The store’s design will reflect the locale through an industrial décor complete with open ceilings, exposed ducts, deep saturated colors, woven wall art and hand-crafted wooden accented furniture.
Additionally, Nordstrom is introducing a new feature called “Get It Fast” on Nordstrom.com and the mobile app for customers in eligible zip codes in Los Angeles. It will provide customers with a real-time view of inventory available no later than next day. Customers can choose a convenient Nordstrom Local or Nordstrom location to pick up their purchase or opt for free next day shipping to their Los Angeles address.
“Los Angeles is one of our most highly engaged markets, with roughly four million active customers,” said Jamie Nordstrom, president of stores. “One of our goals with Nordstrom Local is to help provide them with a seamless and convenient experience, bringing services like in-store pick up of online orders, alterations, personal styling and more right to their neighborhood.”