For the Next Luxury Off-line Store, It’s Back to the Future
window displays in Switzerland. It’s a start, but much more can be done.
Not-in-stock. A classic frustration with physical retail is product unavailability. E-commerce has mitigated this issue more successfully, contributing to its popularity. Brands such as Zimmerli, Bally and Cartier offer click-and-collect services, linking within-country stores and online inventories.
It’s also much easier to return and exchange online purchases compared to doing so in stores. The next frontier for the omnichannel experience based on the “endless aisle” will be to link international inventories, allow international returns, and use analytics to better predict what customers might want and move inventory accordingly. Correspondingly, big changes in metrics and staff incentives will be required to effectively tear down current silos.
Checkout. In physical stores, checkout can be unnecessarily long, cumbersome and outdated; online, it usually takes just a few clicks. The hospitality sector has already shown that breaking IT silos to integrate with external platforms can help. Las Vegas-based Linq Hotel & Casino uses WeChat for automatic check-in, door opening, controlling lights and air-conditioning in rooms, and automatic payments.[
The journey shouldn’t be merely about integrating the latest fancy fads and revolutionizing the purpose of the store. To make those changes more sustainable, the focus must be on linking human, organizational and digital solutions to solve five lingering consumer pain points first.
Dr. Stéphane J.G. Girod is Professor of Strategy at IMD in Lausanne, Switzerland, where he directs the “Reinventing Luxury: Strategic Conversations” program.