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
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