Counter at­tack

Bored with shop­ping on the web? You’re not the only one. Deirdre Macken ex­plores how bricks-and-mor­tar re­tail­ers are ready to woo you back

The Australian - The Deal - - News -

Bricks-and-mor­tar re­tail­ers strike back with dig­i­tal tools

IF you go down­town in the next few weeks, you’re bound to run into Santa but you might en­counter a yoga ses­sion, a cook­ing class, wine tast­ing, sports and make-up demon­stra­tions, de­sign classes, IT so­lu­tions and even a brain scan.

There’s a lot of ac­tiv­ity in shops to­day and it isn’t just cen­tred on the sales bin. In the wake of the dis­rup­tion from on­line commerce, the old glass-fronted re­tail­ers are reinventing them­selves to be­come both more like the on­line re­tail­ers and more like the shops of cen­turies past. The re­sult is that the two hottest trends in re­tail — ex­pe­ri­en­tial shop­ping and per­son­alised shop­ping — are de­ter­min­ing which re­tail­ers sur­vive the dig­i­tal era and which end up with a “For Lease” sign in the win­dow.

“We al­ways thought on­line re­tail­ing wouldn’t take over the world and it hasn’t,” says the Re­tail Doc­tor chief Brian Walker. “On­line is about 8 per cent of re­tail spend­ing and there are signs it’s ma­tur­ing. In Septem­ber, for in­stance on­line sales were lower than the pre­vi­ous Septem­ber.”

If we’re still go­ing into shops, it’s not be­cause we want to see “sacks on racks” as one re­tailer put it.

“Con­sumers want it be a tac­tile, hu­man ex­pe­ri­ence. We want to talk to peo­ple when we’re there par­tic­u­larly for high-end or spe­cialised prod­ucts and we want to be en­ter­tained, we want it to be an event,” says Walker. “If you look at re­tail­ers that have failed over the past 18 months, they have a few things in com­mon — they are all things to all peo­ple, not great ser­vice, not a great ex­pe­ri­ence and cus­tomers can buy on­line and more cheaply on­line.”

The tac­tile, so­cial ex­pe­ri­ences that might save the shop­ping trip in­clude McDon­ald’s offering a dig­i­tal kiosk for cus­tomers to de­sign their own ham­burg­ers, Lu­l­ule­mon hold­ing yoga classes in store, Sumo Salad set­ting up a con­cept store with pick-your-own veg­eta­bles and, cu­ri­ously, Uniqlo’s neu­ro­science ex­per­i­ment, where shop­pers’ brains are read to de­ter­mine what mood they’re in and what clothes suit that mood. More broadly, food out­lets are offering more food and wine ex­pe­ri­ences in store, decor stores of­fer de­sign ser­vices and hard­ware stores vouch for their build­ing ad­vice. The ul­ti­mate re­tail ex­pe­ri­ence is the Top­shop in Lon­don’s Ox­ford Street, which is de­scribed as a week­end des­ti­na­tion be­cause you can get a hair­cut, a beauty treat­ment, lunch with friends and, of course, take a selfie with them in the photo booth. Lit­tle won­der that Myer is team­ing up with Top­shop as its new chief, Richard Um­bers, steers “a move away from cookie-cut­ter re­tail”.

An­other re­tail con­sul­tant, Michael Baker, de­tects a grow­ing bore­dom with the on­line shop­ping cart. “With e-commerce, we have got to the point where a level of bore­dom has set in, par­tic­u­larly with the mil­len­ni­als. They’re really so­cial, they like go­ing out and, even though they’re really con­nected, it doesn’t mean they want to use that con­nec­tiv­ity to buy.”

It is, he says, as though “we’ve dis­cov­ered we’re still hu­man. We like get­ting out, we like in­ter­act­ing and re­tail­ers that have en­ter­tain­ment in store, sports or the abil­ity to play with stuff in store will do well.” But, he adds, just be­cause peo­ple are still trekking into shops, it doesn’t mean they will tol­er­ate the late 20th cen­tury version of shop­ping, with stacks of racks and not much ser­vice. “Peo­ple have dif­fer­ent expectations of phys­i­cal stores since they’ve been on­line and they ex­pect phys­i­cal spa­ces to de­liver the best of both shop­ping ex­pe­ri­ences.”

Much of this re­lies on tech­nol­ogy and, in­deed, the sec­ond wave of dig­i­tal commerce is the tech­nol­ogy that ac­com­pa­nies the shop­per into bricks and mor­tar stores rather than the tech­nol­ogy that keeps them away. He says the first step to savvy shop­ping “is to take away the things we find painful about phys­i­cal shop­ping”. The park­ing woes are be­ing ad­dressed by cen­tres that of­fer park­ing tech­nol­ogy, like va­cancy lights; the I’m-lost-get-me-out-of-here is be­ing solved by cen­tres offering in­door GPS or map­ping ser­vices and the out-of-stock frus­tra­tion can be han­dled by stream­lined stock­ing that of­fers cus­tomers the right size or the right colour one way (on­line) or an­other (de­liv­ery from an­other store).

The tech­nol­ogy that dis­rupted bricks-and-mor­tar shop­ping is be­ing used to re­ju­ve­nate it but, Baker says, don’t hold your breath. “We’ll see a tremen­dous re­ju­ve­na­tion of re­tail spa­ces but it’s not hap­pen­ing yet. I would hes­i­tate to name any re­tailer here that is do­ing it well. But in a couple of years, you’ll see it.”

The sec­ond wave of re­tail tech­nol­ogy to in­vade the shopfront is the per­son­al­i­sa­tion of the ex­pe­ri­ence made pos­si­ble by the smart­phones that cus­tomers carry into the store. The com­bi­na­tion of data gleaned from apps, lo­ca­tion ser­vices and loy­alty schemes en­ables shops to recog­nise shop­pers when they’re out­side the store; to up­sell them when they’re in the store and of­fer them ser­vices such as vir­tual re­al­ity dress­ing rooms, per­son­alised bill­boards and, for VIP cus­tomers, face recog­ni­tion. The elec­tronic sales as­sis­tant is never bored.

“Ev­ery­one is in­ter­ested in be­ing lo­ca­tion rel­e­vant and in­ter­est rel­e­vant,” says Baker. “So, if you make a pitch to cus­tomers you have to be lo­ca­tion rel­e­vant (that is, the cus­tomer is near the store) and you have to be rel­e­vant to their in­ter­ests and that rel­e­vance is found through pur­chase history and data. It’s a merg­ing of phys­i­cal and non-phys­i­cal shop­ping spa­ces.” He is re­fer­ring to the emer­gence of omni-chan­nel ca­pa­bil­i­ties that recog­nise peo­ple take both on­line and phys­i­cal jour­neys in their shop­ping trips and so the re­tail­ers should al­low for both sorts of con­tact with their shop­pers.

Ac­cord­ing to an Ip­sos re­port ear­lier this year, younger women are the per­fect can­di­dates for the merged shop­ping ex­pe­ri­ence. They shop at both on­line and tra­di­tional stores more of­ten than older (45-65 years) women and they’re very ac­cept­ing of ge­olo­ca­tion apps and con­tent that comes via their so­cial sites. They are the om­ni­vores of re­tail.

If the old shop front is be­com­ing a part of the dig­i­tal era of shop­ping, it’s no sur­prise that on­line re­tail­ers — pure play re­tail­ers — are look­ing up lease­holds. Ama­zon has set up its first brick­sand-mor­tar book­store and Mi­crosoft is mim­ick­ing Ap­ple’s re­tail em­pire and opens its first re­tail space in the southern hemi­sphere in Sydney’s Pitt Street mall this month. For dig­i­tal brands, the shop is a place for users to ex­pe­ri­ence the brand, it’s a place to build a com­mu­nity of cus­tomers, and a place to show­case their wares, ex­per­i­ment and get in­for­ma­tion from cus­tomers. They want to have a dig­i­tal brain and an ana­log heart.

One of Aus­tralia’s most suc­cess­ful on­line fash­ion re­tail­ers, The Iconic, is not con­vinced about the need for floor space. “We never say never at The Iconic but at the mo­ment our sole pri­or­ity is re­defin­ing the way Aus­tralians shop for fash­ion on­line,” says CEO Pa­trick Schmidt. How­ever, he recog­nises the value of eye­balling cus­tomers. “One of our only op­por­tu­ni­ties to phys­i­cally in­ter­act with cus­tomers is dur­ing par­cel de­liv­ery, so we are con­stantly look­ing to make this an ex­cit­ing part of their shop­ping ex­pe­ri­ence,” says Schmidt.

En­gage­ment is the new bot­tom line in re­tail. And some shops will do al­most any­thing to add verve to the ex­pe­ri­ence of wan­der­ing be­tween sacks on racks. The Uniqlo brain-read­ing ex­er­cise in store a month ago was one such at­tempt but it was more play­ful than mean­ing­ful. If re­tail­ers want to look in­side the mind of shop­pers, they don’t need to place brain de­coders on their scalps, they just need to look in­side their phones.

Joanna Van­der­ham as Denise in the tele­vi­sion se­ries Par­adise Road

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