Customer Portfolios' Blog

How to Adapt to the “Retail Apocalypse”: Focus on the Customer Experience

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 “The reports of brick-and-mortar’s death have been greatly exaggerated.” – Augie MacCurrach

News about brick-and-mortar retail has been dismal. Each week, it seems like more brands are shutting their doors. There is an influx of news articles trying to explain the death of brick-and-mortar, blaming millennials, technology, and the rise of ecommerce for store closures. These articles paint a grime picture of American retail today, with abandoned shopping malls and record-high retail job loss.

These articles only focus on a small part of the bigger picture. In fact, brick-and-mortar stores are still thriving today. And it’s not that traditional retail is dying, rather, retail on the whole is changing. Need further proof? Not only are we seeing the majority of retail transactions happen in-store but pure ecommerce brands like Amazon, Warby Parker, and Everlane are opening brick-and-mortar locations. Despite ecommerce’s growth and influence, it still only makes up 7.4% of total retail sales in the United States, per the National Retail Federation, which gives pure ecommerce brands 92.6% (!!) untapped revenue growth potential.

However, brands that make the leap from ecommerce to brick-and-mortar need to be cautious, too. The articles are correct in one way; with the rise of technology, shoppers have come to expect more from brands. To quote Neil Blumenthal, Co-CEO at Warby Parker, “Mediocre retail experiences are dead.” To stay relevant and put the customer experience first, both ecom turned brick-and-mortar and traditional retailers need to adapt to meet the customer’s changing needs. Below are three examples of brands that are leveraging technology to create an optimal in-store customer experience:

  1. No longer are customers shopping in-store for necessity. With shipping times of 4 hours or less, they don’t need to. Rather, they shop in-store because it’s an experience. Sephora, the make-up and skincare retailer, offers free makeovers, mini-facials, and even makeup classes in-store. They also offer free skin IQ testing at all their locations, so you can see which products and colors will work best on your skin. They have incorporated technology and personalization into the shopping experience, making it a truly interactive and engaging experience for customers.
  2. We are living in a world where customers can connect with brands through all different channels and devices. To keep up, brands need to optimize their omnichannel strategy to create a seamless experience. For example, Nordstrom focused its efforts on creating a seamless shopping experience to allow customers to purchase without being in-store or on Nordstrom.com. Customers can message a store associate from their phone while they are in the store to ask for help, or buy products through Instagram or Pinterest. Rewards members can earn points and use rewards regardless of the channel, removing barriers for a customer to complete a purchase.
  3. In the spirit of full transparency – I’m a Dunkin' Donuts guy. I like their coffee and their Perks program – but when it comes to QSR and ease of app, I have to tip my cap to Starbucks. The coffee giant has pioneered the mobile wallet and made traditional commerce obsolete – at least when it comes to buying coffee. Customers can order ahead, reload money onto their card, and even pay for their coffee from their phone. This is illustrative of how Starbucks has done a great job of leveraging technology to create a quicker and easier experience for the customers who want to grab their coffee and go.

 

Brands that don't change with the times are the ones that end up bankrupt. Consider the list of brands that have closed stores this year. Was their customer experience fun, omnichannel, and easy for customers? Did they embrace technology and create a single-customer view? They might have tried, but legacy systems and lack of innovation may have held them back. To that end, I will leave you with one more rally cry, innovate or die and join the ranks of JCPenney, Payless, Gymboree, and the others who failed to leverage technology to enhance the customer experience.

 

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