Op-Ed | Traditional Retail, Reimagined
It was a tough year for physical retail. More than 9,300 stores closed in 2019 alone, as a result of brands not adapting to consumer demand or addressing the appetite for experiences over traditional retail. DTC brands looking to expand their customer base are capitalizing on the mistakes made by traditional retailers.
Physical stores are a powerful media channel, and very often the first point of contact between brands and consumers. As consumers become increasingly technologically entrenched, they’ll crave, not just more, but better physical retail experiences. Brick-and-mortar spaces will offer retailers and brands the opportunity to draw the consumer into the brand story, delivering a remarkable experience, to ultimately strengthen their relationship with consumers.
In-Store Over E-Comm
- Young, digitally-native consumers have a penchant for experiencing product in-store. According to a new survey from HRC Retail Advisory, 72% of Gen Z consumers visiting a mall at least once a month.
- The experience once in-store is becoming increasingly important as e-comm competition heats up. In a recent study from Mood Media, 78% of global shoppers revealed a one-of-a-kind experience that focuses on creating services and products is key.
- Nordstrom has driven foot traffic (and sales) by working with DTC brands like Glossier and Stella and Dot. By 2022, Nordstrom plans to have strategic brands comprise about 50% of full-price sales.
Phygital Experience
- In 2020, 100 million consumers will shop using AR and VR online and in-store, and 46% of retailers planning to deploy AR or VR solutions to improve the customer service experience.
- Rebecca Minkoff connected stores feature smart walls that suggest new styles when a customer enters the space and smart mirrors in dressing rooms that allow shoppers to browse for other sizes or save their shopping activity for the future. When you walk into the fitting room, everything that you brought with you is displayed on the fitting room mirror. The technology worked. Sales have been up over 200% each year since installation.
- Sephora, NYX, Lancôme, and Urban Decay are just a few of the beauty brands to sell products via Pinterest’s new shoppable Try On feature. The platform has the potential to emerge as an influential channel. 87% of Pinners who view beauty and personal care categories visit the platform when they are undecided about a purchase, per survey data from the social platform.
FOMO Economy
- Fueled by social media, the interactive retail experience is driving millennial spending. Today’s shoppers devote, on average, 4x more money to experiences over goods, according to a recent study from McKinsey & Company.
- Canada Goose launched a new experiential store on December 4, 2019, in Toronto. The choose-your-winter-adventure store “The Journey” is immersive, super instagrammable, and doesn’t even contain any actual product.
Retail is not dying. If anything, it’s evolving. E-commerce brands are looking for strategic brick-and-mortar plays, while traditional retailers are reimagining how they deploy in-store technology to better serve the most critical stakeholder a retailer has: the customer.
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