Retail is far from returning to normal, despite government restrictions worldwide easing. Brands are reassessing the purpose of their stores, while vast numbers close and consumer behaviour shifts.
The future retail store, once thought likely to be dominated by large-format flagships in key tourist cities with customer engagement front-of-mind with in-store art spaces, cocktail bars and event spaces is pivoting fast amid Covid-19. The new imperatives include safety first, fulfilling online orders ahead of consumer-facing sales, offering touchless experiences and focusing on personalisation for those brave enough to visit, experts say.
“When we emerge out of Covid-19, we will see different models in store,” says Jean-Emmanuel Biondi, principal of retail, wholesale and distribution at Deloitte. “Customer trips will be more planned, with the intention of maximising the time that they spend in the store and therefore reducing the risk level from a health standpoint.”
Hyper-personalised touches and localised experiences
Covid-19 has encouraged retailers to think about how they can better personalise the in-store experience as shoppers are likely to spend even less time in stores, says Biondi.
Tactics that promote or enable a personalised experience, like a 5G-enabled environment, can help make shopping in stores seamless, he says. With 5G, which is set to be more widely available across the US and UK in the next few years, retailers will be able to gather more unique insights on the individual customer and refine real-time merchandising messaging and promotions, in-store and in-app communications, facial recognition and VR- or AR-enabled services.
“The future is knowing who the customer is on a personalised level, not a segment level, so I can push specific promotions as you walk by the aisle of your favourite product or products that you’ve bought multiple times in the past,” Biondi explains.
Nike’s latest Rise retail concept in Guangzhou, China.
© Nike
There are also ways to add touches of personalisation without making a major investment. Sephora rolled out coloured baskets in stores last year that indicate whether or not a shopper needs assistance or wants to be left alone, something that beauty brand Innisfree has been practising in South Korea for years. “The key thing is it gives the consumer control over their environment, rather than that being determined by retail staff,” says Rachael Stott, futures analyst at strategic foresight consultancy The Future Laboratory.
With most interactions in-store becoming digital, and many retailers requiring consumers to book a visitor slot, retailers also have a wealth of data on purchasing patterns in specific locations and individual behaviours that can be used to elevate the in-store service even further, says Stéphane Girod, professor of strategy and organisational innovation at IMD Business School.
As part of its focus to limit wholesale partnerships and sell directly to consumers, Nike is opening between 150 to 200 smaller footprint stores in the US and EMEA over the next few years. These “neighbourhood stores” are more effective than large flagships, says Stott. “Have a local retail assistant that is familiar with you as an individual and your local community is a very valuable asset in an era of increasing isolation.”
Girod commends Clarins’s approach: the French beauty brand’s consultants use mobile and CRM systems to help clients choose the most relevant products. “Hyper-personalisation is about superior CRM management and staff who really know their clients.”
Minimising contact
Despite government restrictions easing, many shoppers are still hesitant to return to stores. Forty-eight per cent of consumers expect to avoid shopping centres or malls after lockdown, and 32 per cent expect to avoid “shops in general” as of 13 May, Coresight Research found. In the next few weeks, Coresight founder and chief executive Deborah Weinswig expects foot traffic to remain low as 78 per cent of those surveyed are still currently avoiding public places.
During Covid-19, consumers worldwide have turned to curbside pickup as a matter of safety and necessity, collecting online purchases without leaving their cars from stores including Prada, Gucci, Everlane, Neiman Marcus, Walmart and Target. Target began testing curbside collection in 2017, but in recent months, the service has exploded in popularity, with sales up 1,000 per cent in April over the previous year, the company said on its latest earnings call.
Shopping efficiency is increasingly a priority for consumers, Accenture found, having surveyed 7,872 consumers worldwide from 5 to 11 May. The most popular omnichannel services that consumers say they will continue using are in-app shopping (51 per cent), home delivery (45 per cent), curbside pickup (42 per cent) and shopping via social media (41 per cent).
Checkouts by the door at the Everlane store in Williamsburg, New York.
© Guillermo Cano
Everlane currently offers curbside pickup at three of its locations in the US, and has no plans to stop based on positive customer feedback, even as stores reopen, says Tara Shanahan, vice president of retail at Everlane.
Rather than showing the newest collections in window displays, the brand is promoting basic but best-selling items like T-shirts and tank tops in its windows in an effort to boost on-site purchases alongside curbside pickup. Store staff can go inside and grab items in select colours and sizes, for customers who wait outside, from collections of about 10-15 items available through the service.
The retailer is also promoting the option on its website, says Shanahan. Customers can visit Everlane without ordering ahead of time to purchase items and use curbside services to return and exchange items as well.
Size and fit, primary reasons for returns, remain a challenge, says Weinswig. Ralph Lauren, H&M, Carhartt, Toast, Boden, Asics and Samsoe & Samsoe have all partnered with technology companies like 3DLook and True Fit to offer 3D body scanning services and minimise online returns, a tactic that will become increasingly important as e-commerce and quick store trips become the norm. With this technology, Boden says it has seen fit returns reductions of 2.7 per cent, while Asics attributes a 3.3 per cent increase in conversion.
Biondi says that while stores will remain important as brand touchpoints, retailers will need “to find a way to help consumers reduce the risk of trying until they own the product. We will see more technologies emerge that allow for a touchless experience”.
“Covid-19 makes omnichannel flexibility even more important so that consumers can choose which channel they prefer, depending on how they assess the physical risk,” says IMD’s Girod.
https://www.voguebusiness.com/consumers/inside-the-store-of-the-future-nike-everlane-sephora