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Four Ways To Design Stores Customers Want To Shop In

November 26, 2014

PSFK Holds The Future of Retail Conference in San Francisco; Creates A Manifesto To Reinvent The Physical Store

Did you know that 95% of retail transactions still happen in-store and only 5% happen online? As a result, the retail store of the future is rapidly evolving. This past week, we attended the PSFK Conference for the Future of Retail 2015. Key executives from some of the biggest technology companies in Silicon Valley, Apple, Google, IBM, PCH International, to name a few, were in attendance to discuss the key trends driving retail, shopper behavior, and customer experience. Here are the take aways:


#1: Retailers Need To Know Who I Am and How I Shop

Today, customers want to have an actual “experience” when they’re shopping in a physical retail environment that matches something found in 3D IMAX movie theaters, the only difference is that they are shopping for apparel and accessories. In order to match evolving behavior patterns, retailers have to design stores that seemingly recognize just WHO an individual is as soon as they walk in the door. What’s more, retailers will need to focus on how their in-store and online experiences connect. Lofty feat? I think yes.

According to PSFK founder Piers Fawkes, retailers are currently failing at connecting the two.  For example, when Amazon opened a store in San Francisco’s Westfield shopping center, Fawkes expected it to be an interactive and omni-channel experience made extremely personal. Instead, he found a ‘small brown Apple store’. “When I currently log onto Amazon, I get served with princess recommendations galore for something I bought my daughter years ago. Why did not the store offer me the same princess products instinctively?” he said. Brick-and-mortar retailers will need to sell to each customer based on their individual behavior and interests. In order to achieve instant dynamic discovery, store technology must connect customers with the right information.


#2: Retailers Transact In A Culture Driven By Experience

In order to stay relevant with customers, retailers should focus on transacting culture, experiences, and relationships. Before retailers decipher what this means for their store, it is important for them to understand three trends in consumer behavior:

  1. Sharing Economy:  Peer-to-peer behavior drives the sharing resources; the sharing economy enables people collaboratively produce, manufacture, and consume goods.

  2. Local Economy: Farmers markets have grown 700%. Consumers want to connect with the makers, artists, and craftspeople.

  3. On-Demand Economy: Consumers want what they want and they want it now.

Long story short, we are in the midst of a personal selling revolution that’s driven by Twitter, Square, YouTube, and retail outlets like Etsy and The Store Front. Instead of relying on large retailers to get the products they need, consumers have alternative ways to get items they want. They can rent or borrow instead of buying or they can look to a local producer to quickly buy a quality product. Based on the social economic disruption of these behavioral shifts, retailers must now create spaces that really matter to customers. Retailers must think beyond basic transactions and focus on creating an experience. Look at Lululemon offering yoga classes and expert seminars or at Broom St. General Store, which doubles as a coffee shop and bistro. These retailers are succeeding because they have created a community experience within their physical spaces.

Expert Tip: Don’t be afraid to imagine the real  – continue to sell customers on an aspirational lifestyle.



#3: Retailers Need To Invest In Employee Training

As retailers invest in store experience, they will also need to focus on total product immersion. Retailers must go beyond traditional merchandising advice to develop customer-centric interactions. These interactions will help shoppers get their hands on products in new ways. In order to do so, retailers will need to invest time and money in educating their staff. Education may mean killing other less necessary brand expenditures. It may mean adjusting your budget to make room for educational investment such as providing employees with the right technological tools to help them more efficiently sell to customers. Bottom line, if an employee can not help a customer, the company loses revenue.

If employees can not help a get a customer obtain what they want, then an employee better be prepared to say, “I will find out immediately and get you an answer” instead of “I do not know.” A great example would be Multimedia Plus’ mobile and video tools that are currently being leveraged by Kate Spade, Chanel, J. Crew, and Coach, among others. Online, it is important to monitor customer experience through social listening services. Facebook, Twitter, and any social channel your brand is active on needs to be monitored as if it’s an extension of your in-store customer service (because it is). Investing in software tools such as Radian6 and Simply Measured may be in order.


#4: Retailers Need To View Mobile Is A Connective Bridge

Did you know that $1.4 trillion dollars in stores sales is influenced by digital technology?  According to Google, 84% of shoppers use their smart phones in-store. Forrester reports that 73% use web and mobile apps before making a purchase in-store. Yes, that means that social, mobile, and websites drive in-store purchases. Advancements in mobile behavior, overlaid with technology (iBeacon, Near Field Communications (NFC), and apps) are changing the way retailers approach targeting consumers on their smart phones and tablets. Retailers must adapt to multi-screen behavior and build responsive or mobile-compatible websites that enable consumers to multitask shop.

It is an understatement to say that there are too many mobile apps on the marketplace. As such, retailers and brands alike should look to develop mobile product distribution strategies that leverage other apps with large customers bases (like Spring or Lyst) to drive product purchases. Another good idea to circumvent app market fragmentation is for marketers to integrate mobile push incentives into chat apps like Line and WhatsApp, rather than investing in their own mobile apps. Why? Consumers seldom return to retailer apps in-store.



Looking At The Future of Retail

For the longest time, it seems like retail and brand marketers have felt they must follow the corporate norm in order to be successful. Augmented marketing strategies really only occurs when these retailers and brands are mandated to make changes. When I survey the marketplace, the new norm is adopting social media, but only after eight years of critical mass. Looking further, I see that many brands are still in the beginning stages of creating their own content and working with digital influencers. These retailers still naively think that contests are the best ways to drive engagement.

This is alarming because when marketers look beyond trends and fads (something we understand all too well in retail) and focus on the bigger picture, only then do we notice the information present in this article. Yet, many brands simply bury their heads in the sand until they are forced to address technology again. Currently, 74% of consumers say they want mobile-centric websites and 54% of brands offer mobile-optimized products, but these products weren’t designed with the mobile consumer in mind. When I look at the data of any of my clients’ websites, 60-74% of the traffic comes from mobile devices, whether it’s for commerce or content. The mobile web is moving faster than the social web. Eventually, retailers won’t just be fashionably late to the party since they did not adopt, they’ll simply cease to exist.

By ignoring behavior patterns, retailers are doomed to fail in the rapidly evolving landscape of online to offline commerce. – Macala Wright

To learn the nine components of a successful store of the future and gain valuable consumer insight, download the PSFK Future of Retail Report 2015.

Photos: Images courtesy of Shutterstock + RRRainbow Shutterstock.