There are few people in the retail chain who would argue that the role of the store is the same as it ever was. With the rate of change accelerating like never before, consumers are throwing new challenges at retailers faster than they can implement solutions.
And so, it’s no wonder that many retailers seem to be in a perpetual state of paralysis. First it was the COVID-19 pandemic generating a ten-year acceleration of eCommerce adoption, and now a deceleration towards pre-COVID digital growth rates. Combine this with late 2021’s inventory swing, collected to initially avoid supply chain shortages, it’s no surprise that these events have caused surplus of merchandise so great that it is contributing to many western economies’ teetering on the brink of recession.
The idea of the store as a straggler in the race is nothing new. We let it be that way because previously, it worked. However, the last few years have brought into focus the impact that the stationary store can have on retail businesses and there is undoubtably an opportunity to adopt the store to the changed landscape it now occupies.
To do so effectively, retailers will need to adopt agile, flexible and often unfamiliar ways of working to ensure ongoing alignment with the expectations of a continually changing customer base. With increased consumer expectations for convenience, transparency and personalisation, the opportunity to augment the store, if done correctly, has the potential to yield significant operating efficiencies and cultivate meaningful brand loyalty too.
So, how can retailers work to reimagine and reinvent the role of one of their most valuable brand assets – the store? Below are some key tips.
Understand what the customer wants
In a world where discovery happens online and everything is available at our fingertips, it’s important to understand why your customers still go to the store.
The most forward-thinking retailers are gathering consumer insights and real data to identify what role the store plays in the consumer journey and optimise accordingly. For some, the convenience and immediacy of the store is critical. For others, it’s a tangible and personalised buying experience and for most, it’s a unique blend that calls for a unified solution.
Well trained store teams, fast and flexible technology, and data-informed decision making are almost always part of getting it right. If you asked your entire team why customers visit stores, would everyone give the same answer? And, more importantly, would it be the same answer your customers provide? Getting closer to your customers and understanding the way they think is step one.
Measure the right thing, and then some
While KPIs such as conversions, sell throughs and earnings before interest undoubtedly matter, they aren’t the be-all and end-all for top performing retailers. Once you’ve figured out why customers go to the store, the next step is to figure out how to measure and improve your performance against their expectations.
Once retailers understand why their customers are visiting their stores, it’s important to be able to take a step back, look at the big picture and ask yourself – ‘do we really have the technology in place to continue to monitor our performance against these expectations?’
For every measurement of fiscal performance or operating efficiency, there needs to also be a measurement for customer store satisfaction. Maybe it’s as simple as a Net Promoter Score, or maybe it’s something more advanced and revealing.
For example, if you were to compare online sales to retail sales within defined proximity ranges to the store (i.e., 5 kms vs 10 or 25 kms), you could find out just how far customers are willing to travel for the store experience. And, within that customer segment, what are the differences between the digital customer, the store customer, and the customer who shops both. If you’re looking for advanced metrics to better understand how the store impacts your customer base, this would be the way.
Invest in the right tools for the right experience
So, how exactly should retailers be thinking about their stores in today’s changeable retail environment? It’s a big question, with many possible start points, but for us, we’d always start with data.
For modern, future-looking brands, the importance of being able to generate and collect data is the key to success. This could include real-time inventory data, transactional, or even customer data passed back and forth through digital channels like social media.
Take Point-of-Sale (POS) technologies as an example over the last few years. POS has come a long way since the rather superficial function of previous generations. The modern POS is no longer just a tool to complete a transaction, sale or return, but rather, it represents a key to seamless, unified commerce, enabling activities such as exclusive products, click & collect, store fulfilment of online orders, and customer retention.
Today’s retailers require technology with the infrastructure, agility, flexibility, and scalability to join all the digital dots together if they are to maximise the potential of their stores and deliver a truly seamless and memorable customer experience.
The store, redefined
The recent changes the retail industry has witnessed, which have only accelerated by the pandemic, are no different to periods of change we’ve seen in the past – they are simply the latest in a long line of retail transformations and disruptions.
While the store of yesteryear may have been resigned to the archives of retail history, today’s stores are enjoying somewhat of a renaissance, in large due to the new technology available at their disposal.
With retailers today needing to rethink traditionally held ideas around assets and operations, it is no longer simply a matter of digital Vs. physical. Critically, it’s about how a brand can leverage all its merchandise and customer data to align with its sales channels to deliver a truly remarkable, seamless customer experience. Although the function of the store and the technology needed to operate it are fundamentally changed, today’s stores still have a key role to play in the retail narrative and are still very much at the forefront of this latest retail revival.
Raghav Sibal is managing director for Australia and New Zealand at Manhattan Associates.