Bricks-and-mortar: all change
Author – Sean Taylor, Business Development Manager, Panasonic UK
On 12 March 2019, I attended the Retail Innovation Forum at the British Olympic Association offices in London. This networking event was hosted by Panasonic, and brought together a wide variety of retail industry experts for insightful discussions on how in-store innovation can transform the consumer experience – and how shops can maximise their ROI from these new technologies. Today, I’d like to share a few of my takeaways from the presentation given by Tim Gardner, Head of Creative Partnerships at Retail Week.
Tim cited an anonymous CEO: “Successful retailers are investing in tech routed around the needs of their customers.” At face value, this seems simple enough. But what exactly are the needs of customers? After all, the buying habits and expectations of shoppers have significantly changed in recent years.
Millennials, for example, rely heavily on online resources for reviews and specifications – often researching items on mobile devices while in store. In addition, they are often want to know more about the companies behind the products, for instance, their sustainability practices. And many retailers are already taking action to address these expectations. However, we shouldn’t neglect older generations. The grey pound wields significant clout in the market. This segment cherishes certain traditional aspects of old-school retail, such as face-to-face interaction and experiencing products first-hand – even if the purchase might still be made online. In other words, retailers cannot focus solely on the behaviour of just one group, to the detriment of others. There has to be an encompassing approach. This is not a simple feat by any means, but with the right guidance and technology, it is possible.
A new purpose
Importantly, the role of bricks-and-mortar shops is evolving. With the point of purchase increasingly online, retailers are now leveraging their physical real estate to maximise engagement and brand loyalty – instead of transactions. Tim described this as a shift towards becoming distributors of experiences rather than products. He pinpointed a few real-world instances of companies that had successfully navigated this transition, and highlighted the technologies they harnessed.
The human factor
This transforming role of physical stores also affects employees, who are increasingly concentrating on service and support, rather than simply manning the tills and stocking the shelves. Customers want staff to provide in-depth and accurate information on products and manufacturers – adding value in terms of their knowledge. For example, shoppers at a clothing store may inquire about a brand’s ecological credentials, the country of origin, or even working conditions. Retailers must therefore train their teams to respond accurately and appropriately to customer questions, and must ensure they have access to all relevant information.
Hello to the halo
Tim’s presentation brought to mind a recent discussion I had regarding the halo effect. This is used to explain customer bias towards certain products or brands because of a favourable past experience. Businesses are beginning to sit up and take note. In the past, a major French Beauty brand assessed shops’ performance primarily based on their conversion rates, and set weekly sales targets. Now the halo effect is being factored into these targets, meaning all online sales within a set distance from a store count towards its turnover. This approach underscores how, even though the role of bricks-and-mortar shops is changing, they are still a vital asset.
For more about Tim’s thoughts and the Retail Innovation Forum generally, please check out our official report. And to discover how you can enhance the customer experience at your retail locations, visit our website.