store

From Storing to Exploring

Retail’s Reinvention

The store, as we once knew it was a wonderful but inefficient mechanism. The shopping part was fun, and often engaging. The buying and selling were often more problematic. Today, the internet (aided by the smartphones) has separated shopping from buying, altogether. This has resulted in retailers’ migraine millennium. Rather than perfecting the in-store experience, too many retailers attempted to compete on price, with little product or service differentiation. This is the very definition of commoditization. It was a race to the bottom and the internet won. The losers have been too numerous to count

Big, Boring Boxes

The most concentrated form of commoditization was the category killer. Aptly named, these big box behemoths killed off many smaller, local and regional independent retailers. Fortunately, this segment is just now becoming reinvigorated, and it shows great promise; significantly aided by the democratization of retail technology and data analytics. Indie retailers now have access to technology once exclusive only to the bigs. The ubiquitous, boring boxes came in almost every category. They included toy warehouses lacking any sense of fun or discovery. Spine-filled book stores devoid of stories. And tech-filled computer stores without any signs of intelligent life. Ironically, their value propositions were sub-par, and they ultimately killed themselves off. Experience does matter.

It’s also undeniable that over the past fifty years too many stores were built, and too many look alike brands proliferated. That was compounded by the convergence of large socio-economic, cultural and demographic changes, which were all amplified by the great recession. The days of conspicuous consumption have given way to changing priorities and more thoughtful purchasing.

From Selling Goods to Staging Experiences

There has been a clear and very palpable response to much of the commoditization that has resulted from the internet’s tsunami-like emergence. The very nature of what drove our ancestors to create the early marketplaces, thousands of years ago, are still alive and perhaps more relevant than ever. We want and need to engage in socialization, particularly with affinity groups. Our highly developed senses long to be exercised. We like to see, touch and feel beautiful things. We are curious beings and perhaps most importantly, we love stories; additionally, we become emotionally engaged if the stories are authentic. Enter experiential retailing.

Deconstructing An “Experience”

Much lip-service has been given to this experience thing; and like many buzzwords, it can mean different things to different people. It’s kind of like “good food” or “a nice car”. In my decades as a retail designer, and trend forecaster, it has been my business to objectify the very nature of what it takes to create a meaningful, and memorable customer experience. My clients charged us with connecting the dots between design, and the bottom line.

Along the way, we discovered that creating memorable experiences involved both science as art. And while the subject could fill a book (which I did), we identified three distinct levels of experience that need to be considered. The levels are engagement, immersion, and transformation. Their relative value and “stickiness” grows exponentially, as you move along that spectrum. The best brands are often able to move their customers right up the experience ladder. But doing so takes great skill, and much orchestration. Here are some of the thoughts and considerations behind the building of a high value retail experiences.

Taking a Brand Stand

With the demise of an endless number of multi-brand retailers, much collateral damage occurred to the national brands, whose products lived (and sometimes died) on their shelves. And, the fact that smartphone-toting consumers were suddenly all walking around with their own personal point of sale, in backpacks, back pockets, or purses, only compounded the problem. Retailers needed to find a way to get face-time with their customers. They were motivated, and as a result, novel new customer engagement solutions began popping up.

The popularity of social media, along with the growth of influencer marketing conspired to reconstitute the “temporary tenancy” into a new and exciting genre: the pop-up. These new brand-stands behave as much like media as store. They are transitory and can be placed and replaced. They have added a much-needed sense of serendipity.

Most importantly they’ve enabled face-time between brand ambassadors (not salespersons) and customers. The format establishes an appropriate venue for valuable data gathering, to begin to build a more comprehensive view of the customer’s purchasing behavior on and offline. This strengthens the brand bond while enabling personalization. It also helps move the customer from engagement to immersion. Given that the format plays well with social media, it can also become the glue that helps fuse online with offline selling.

Adidas_popup_amsterdam

Adidas garnered the attention of many with its pop-up store in Amsterdam.

Dynamic Versus Static

The attraction that many of the pop-ups have is their impermanence; which elicits the FOMO (Fear of Missing Out) factor. Today’s customers particularly Gen Y and Gen Z’s have come to expect the unexpected. This leads retailers to invest in highly curated, narrative spaces, with short half-lives: days, weeks or months. Two examples are the recently unveiled Bloomingdale's Carousel installation in New York and Macy's recently launched Story concept shops, which are expected to roll out in 30 stores this year. Bloomies has made the point that Carousel’s personnel will be a carefully selected and trained “docent-selling team” to engage guests around the overall themes. Both concepts have the capacity to become immersive experiences as well as destinations. It’s reasonable to assume that these trend-sensitive offerings will be influenced by AI-based social media image scanning, as an aid to predicting emerging trends.

Igniting Emotions

Above all, successful companies understand the importance of creating emotion around their brands.   Nike, Apple, Tesla, Ikea, and Target have all developed storylines that help move their customers across the experience spectrum. They also understand that in the era of the internet, their stores must become less about storing, and more about exploring. And that exploration utilizes technology to connect the virtual with the actual, online with offline; in this brave new world of “unified commerce”. This also coincides with a move from product-based selling to solution-based selling. Put another way, it’s moving from push marketing, toward a pull marketing approach.

Nike_urban_clothes_solutions

Nike store selling solutions for urban shoppers.

Apple’s newest retail prototype emphasizes community and gathering, including seminars and classes around how customers use their products to better their lives. This reinforces the solution-based aspect, and the meaning of what the product represents.

Even Target’s remarkable new retail prototype devotes significant square footage to vignettes and carefully staged displays, that feature product application “stories” that spark imagination and elevate the customer experience. Target’s success with data-driven, hyper-localized product assortment, continues to give them a winning edge. In doing so, Target has become one of the “default department stores” of our time, while changing the conversation from discounting to value creation.

new_Target_Minneapolis

Target’s new retail prototype in Minneapolis.

Consumer Engagement Spaces (CES)

It is undeniable that in the foreseeable future more and more product sales will take place on line. A recent UBS analysis suggests that online sales could escalate to 25% by 2026, from its current 16% market share. They even go so far as to suggest that for every 1% increase in online penetration, approximately 8,000 stores will ultimately close. I wouldn’t suggest such dire predictions. So as retailers, mall owners and managers attempt to “reimagine” product driven retail space into something else, another new term has entered the lexicon: Consumer Engagement Space - CES. These highly curated offerings may combine aspects of socialization, cultural relevance and multifaceted engagement, including that of social media. They may be directed at specific affinity groups, will most certainly embrace digital technology, and must be deemed authentic. Some may even do some “soft branding”.

It’s Not a Store It’s a DORE (Display Only Retail Environment).

Today’s omnichannel leaders have developed such connectivity across the entire supply chain, that new opportunities are emerging, which were unimaginable just a few years ago. In place of many of the traditional stocking stores of the past will be a new breed of branded environments. These experiential, Display Only Retail Environments are intended to move the customer up the experience ladder from engagement to immersion; perhaps even transformation.

These carefully choreographed customer experiences provide visitors with digital and physical tools for both assisted and unassisted selling. Customers who wish assistance will be met by highly trained brand ambassadors like with Bloomingdales’ docent selling team, empowered by data systems enabling a single view of the customer. These branded environments will embody the seamlessness of true “unified retail”, ridding itself of legacy channel-hangover. And, the most delighted customers will leave empty handed every time.

On April 15th Ikea opened its first DORE, on the upper east side of Manhattan. It’s 17,000 square-foot footprint is 5% of the average Ikea, but engineered to be a meaningful satellite, brand touchpoint. It is designed to meet the planning needs of urbanites occupying very compact Manhattan apartments. The store is laid out in a manner that addresses three complementary planning stages: design ideas, systems and componentry, and the planning/implementation process. It is quite likely that Ikea will use heat mapping technology to evaluate shopper flow and make necessary adjustments as these layouts are refined during rollout. The concept represents yet another retail variant that holistically blends online and offline retail, while emphasizing solution-based over product-based selling. It further emphasizes “clienteling” over selling – a subject that is core to creating the kind of high value proposition that will get consumers on their feet, and out the door, and in the DORE.

Ikea_display_only_retail_environment

Ikea’s new solution-focused DORE (Display Only Retail Environment) in New York City.

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