Purpose-Designed Retail Spaces: The Key Considerations
Retailers need to design stores to fit the way that consumers shop today, and that has changed dramatically since ‘modern’ store formats began to evolve two centuries ago, according to Brendan Witcher, VP and principal analyst at research group Forrester.
We invited Witcher to discuss this and a range of other issues with Scandit Head of Retail Industry Solutions Jessica Grisolia. The resulting webinar – The Future of Physical Retail: The Purpose-Designed Digitized Store – analyzes ways to design relevant moments for consumers when creating physical stores.
The changing role of stores
Perhaps because of the popular focus on e-commerce as a prime channel for retail sales, it is easy to overlook an important factor: that physical retail stores still drive the vast majority of sales.
Forrester predicts that in 2024 physical stores will still account for 72% of total US retail sales.
Due to the popularity of services such as Click & Collect, stores also play a role in many online sales too.
But those physical stores could be far more effective with smart and coordinated use of technology, delivering improved service and a better experience for customers, agree Witcher and Grisolia.
Witcher says that most stores are still designed for traditional shopper journeys – where customers take an item from a shelf and buy it – with the ability to service other types of journey bolted on afterwards.
“We found 42 different ways that the physical store today is not able to meet the needs of today’s consumers and retail operations,” says Witcher of research conducted by Forrester. As a result there is no ‘silver bullet’ that will make stores more effective. Here he explains why.
Focus on the brand
While retailers obsess over offering omnichannel service, consumers are increasingly channel-agnostic. They will pick whatever channel is most appropriate for any given purchase, depending on its urgency, their level of confidence in the product category, or even based on their other plans for the day.
He questions whether retailers should even break sales down by channel when reporting them, as the influence of physical stores when people choose where to order online is so difficult to calculate.
In simple terms, sales are sales, and attracting customers to a retail brand remains of key importance. The customers will choose the most appropriate channel to purchase based on their own needs.
This changing way of shopping places greater demands on retail employees. Retailers are making ‘additive’ changes to the way that store associates perform in the workplace.
Technology that can automate repetitive or tedious tasks can lead to a dramatic improvement in service standards, especially if coupled with devices that give associates access to detailed information that can help them to be more efficient.
Features such as clienteling tools, appointment scheduling, or the ability for direct and instant communication between individuals associates and other parts of the business, can transform customer service. Data plays a key part. And empowering employees with access to the right data quickly and easily is what really matters.
One such retailer that has ventured down this path is River Island. Here Grisolia talks about how they are using smart data capture technology to elevate employee and customer experience with access to data.
Such technology can also speed up the process of training new employees and familiarizing them with products and procedures. In a sector with high staff turnover, that can have a direct impact on sales.
Think like a consumer to optimize investments
Retail business leaders often think about investment in physical stores in a different way than they would judge other investments, according to Witcher. Physical stores are so familiar that companies don’t apply the same models of gauge effectiveness as they would with investment in, for example, new software.
But redesigning stores to recognise the mixed-model shopping methods of modern consumers could help to optimize spend made on property, technology and employees, argues Witcher.
Putting those factors together in a more holistic way helps to improve outcomes for each investment. This avoids the problems of a piecemeal approach, where individual improvements never quite meet their potential in the way they improve the customer experience. This can add further levels of cost or inefficiency.
Grisolia sums the webinar up by echoing the lack of a silver bullet for store transformation, but states knowing what you want to achieve is crucial.
Witcher offers a great way to start the transformation process. “Stop for a second and think like a consumer.” That simple act will throw up countless ways to improve service, and to establish a sense of differentiation from rivals – something that is very hard to achieve in the world of e-commerce.
To hear more from Jessica Grisolia and Brendan Witcher on the future of physical stores you can watch the full webinar here.