With cities expanding and more neighborhoods developing, people are driving less and looking to nearby stores. In 2016, more retailers are moving closer to where the shoppers are, which means transitioning to smaller stores in more urban areas.
The rise of urbanization is forcing retailers to transform their merchandising strategies. Retailers are beginning to think small, and are accommodating the local culture of the neighborhoods they inhabit. However, shoppers’ expectations are getting higher. Retailers still need to make the breadth of products in their larger format stores available within the smaller footprint.
“Associates have iPads to make our full assortment available instantly. If you want a new color, you don’t have to search another store, we can help you purchase it overnight.”
Jeff Fisher, Global Store Experience Director at Sunglass Hut
Adopting digital applications that optimize product mixes and localize visual merchandising is critical to ensuring the inventory their customers want will be available. By producing targeted campaigns and offering locally relevant merchandising, each store will develop an authentic experience and personal customer connection. What’s more, through digital devices, retailers can offer, order and deliver merchandise they can’t physically stock.
Overall, the space within brick-and-mortar stores will shrink, but customers’ demand for product range will not. Retailers will need to be flexible for the customer who expects a locally relevant, personalized retail experience with an extensive product assortment.
Millennials have become a hot demographic in 2016, not only for their purchasing power, but also for their individuality. Millennials are connected 24/7. They use online and mobile as ways to communicate, socialize, as well as gather and share their information. Yet surprisingly, this digital generation conducts 75% of their retail purchases in brick-and-mortar stores.
“Millennials are changing the world and will continue to do so. The way we are thinking about stores is around millennials. They are the ones building it too.”
Andrew Smith, Director Retail Operations at Telstra
Millennials now account for 25% of the shopping population, a figure that is only going to increase. It is a huge opportunity for brick and mortar to gain the loyalty of this generation, but it’s also a difficult challenge. Since millennials have easy access to a wealth of information, they can be selective and demanding.
To gain their loyalty throughout the year, retailers must focus on technology. This is a fast-thinking, always-connected generation, and they expect all channels to be unified. Also, Millennials place importance on their unique interests, so retailers need to create compelling, personalized experiences that really speak to them.
Retailers must constantly and quickly evolve to keep up and please the smart Millennial shopper. By adopting new technology in 2016, retailers can create consistency between channels and design exciting brand experiences that will engage Millennials and keep them coming back.
Since shoppers are always connected, retailers have recognized the need for digital presence in addition to brick-and-mortar. However in 2016, it is no longer about merely offering these additional touch-points.
Customers expect to get product information, consider their options, and make their purchases with ease. They bounce between channels throughout their shopping journey, so they want an experience that is complete, seamless, convenient, engaging and consistent. It’s a tall order, but one that should be filled this year. Otherwise, customers will find another retailer that will deliver exactly what they need.
“Shoppers demand a brilliant experience more than ever from brands. They expect the brand to be connected from the physical retail store through to its online presence.”
Emma McRobert, Director Shopper Experience, Consumer Australia at Optus
Removing touch-point obstacles allows the shopper faster and broader access to the brand. This approach streamlines the path to purchase while allowing shoppers to engage with brands on their own terms. By providing access to deeper levels of store information online, shoppers can plan out and optimize their store visit, and they can streamline their checkout options based on personal payment preferences. Ultimately, a seamless, simplified and efficient retail process makes customers happy and keeps them coming back.
Part two of our five part series exploring trends that are shaping brick-and-mortar retail experience. You can read all of the trends in The Store Is Back eBook, courtesy of RBM Technologies.
Digital technology has made retail experience more transparent than ever. Customers have unlimited access to information, so their brand perception forms long before they step foot into a store.
How customers see a brand extends beyond products on shelves, and marketing messages on signage. Shoppers have begun to see brands as nuanced and multidimensional, viewing emotional factors such as thoughtfulness and empathy as benchmarks of value on par with product availability and pricing. They already have a myriad of retail purchasing options, what customers want is a brand who connects with them on a human, more meaningful level.
“Your brand has never been more important. People want to hang out with brands that mean something to them.”
Andrew Smith, Director Retail Operations at Telstra
Now is the time for retailers to evaluate their connection with their customers. In 2016, shoppers will continue to place the value of a brand on how it makes them feel. This evolved brand perception means retailers must focus on delivering tailored, memorable and relevant experiences in order to strengthen their customer connection within the year.
Before a retailer can build a meaningful relationship with the customer, they must first understand them. It is therefore critical that retailers focus on knowing shoppers’ behaviors and patterns, as well as their local needs. To reaffirm the brand perception and create meaningful customer connections, retailers need to put customers’ preferences and behaviors alongside other store specific data. Collecting shopper-specific data can be used to create unique profiles which will then help build a more authentic and lasting relationship with the customer.
Part one of our five part series exploring trends that are shaping brick-and-mortar retail experience. You can read all of the trends in The Store Is Back eBook, courtesy of RBM Technologies.
Store employees are the most valuable assets to a brand. They are on the front lines of retail experience, interacting directly with the customer. They have the opportunity to connect with customers on a personal level, something customers can’t get online.
“Store associates work so much better when they know the why. Bringing them to the table, and communicating with them can go a long way.”
Jeff Fisher, Global Store Experience Director at Sunglass Hut
The store associate’s knowledge, availability and capacity to help the customer all contribute to an exceptional experience and lasting brand impression. However, store associates can only achieve this if they are empowered to fulfill the customer’s expectations. Store employees can never truly be brand advocates if their efforts are wasted on merchandising discrepancies, and aren’t trusted with the authority or the appropriate tools to support a customer’s needs.
Some leading retailers have already begun to equip store associates with the necessary information and digital technology to keep up with today’s savvy shoppers. iPads and other mobile devices are popping up in stores, giving associates access to important details and additional product supply.
When associates have the support to engage shoppers in stores, they will deliver a seamless, personalized experience. They will help the customer through their path to purchase, influence the customer’s brand perception, and ultimately, build customer loyalty.
Ok, your stores never actually went anywhere, but the role of the brick-and-mortar store was eclipsed by the allure of ecommerce and the potential of digital technologies in recent years, leading many to proclaim the store is dead.
But in this new omnichannel world stores play an increasingly critical role in the delivery of a superior retail experience. Stores are where shoppers immerse themselves in unique brand experiences, where they touch and feel products, and, the vast majority of the time (90% to be exact), where they make their final purchases.
A leading big box retailer recently calculated all the different supply chain variations related to a quality omnichannel retail practice and found 85% involved the store. Stores aren’t going anywhere.
Having said that, retailers have some work to do. To remain viable in today’s changing retail climate, brick-and-mortar retailers will need to think, act, and execute differently. They will need to become more agile, local, and precise when it comes to merchandising execution to ensure each store is positioned to capitalize on the trends driving customer behavior.
The store experience needs constant reinvention as new technology advances and customers’ expectations continue to shift at a rapid pace.
To gain some insight into what exactly those trends are, RBM sat down with thought leaders from across the retail industry to get their view. From those interviews, a set of common themes emerged. The results of which we used to inform our latest eBook entitled The Store Is Back.
From empowering employees to bridging the gap between mobile and brick-and-mortar, the ability to adapt within the changing retail market will ensure increased growth and improvement, and continuously put retailers ahead of the competition.
The store experience needs constant reinvention as new technology advances and customers’ expectations continue to shift at a rapid pace. While developing retail strategies, retailers must consider some, if not all, of these emerging trends to create a superior and memorable experience that connects customers to their brands.
A new generation of technology-driven, smart shoppers has taken over retail. These shoppers have easy access to product information, online options, and an increasing choice of competitors. They are selective and only decide to purchase when they get a unique, well-planned, engaging retail experience.
Unfortunately, very few retailers have the ability to keep up with the fast-evolving expectations of today’s customers. Many retailers are dealing with an antiquated retail model based on product breadth and price, and they cannot guarantee their retail experience is consistent, precise, engaging, on brand, on message, and localized for the empowered, demanding customer.
RBM Technologies recently published an ebook entitled 16 Tactics for Merchandising Execution in 2016 that outlines specific, actionable directives retailers can enact right now to engage customers, increase conversion rates, and keep them coming back.
Here are the fundamentals of merchandising execution, as outlined in the ebook, to deliver a superior retail experience:
Shoppers are unforgiving when retail experience isn’t unified across all channels. If merchandising execution is messy or inconsistent, if information doesn’t match what they found online, or if their shopping trip leaves them with a bad taste in their mouth, they won’t come back. Align your organization against a consistent plan – whether it is your merchandising teams, marketings teams or store operations.
Achieving a personalized experience by localizing product assortments strengthens the customer’s brand perception and the retailer’s position amongst the competition. The physical store has a big impact on the customer’s connection to a brand and service. Addressing local needs is critical in developing a more authentic experience and personal customer connection.
Stores are powerful, profitable and able to provide a meaningful connection with customers. Retailers recognize the importance of on plan merchandising execution, yet at the store level, precise retail execution seems difficult.
By using a single digital application that plans, communicates, executes, and measures retail experience, retailers can reduce complexity and improve their ability to execute their merchandising plan effectively and optimize individual store performance.
Often retail experience is imprecise, immeasurable, and expensive. Very few retailers have the ability to consistently ensure that every store is on brand, on message, and accurately executed. Poorly executed retail experience can lead to missed sales and unhappy customers.
However, retailers can execute with precision, measure easily, and as a result, improve individual store performance – eliminating waste in the process.
Many brands understand retail experience is the key driver to customer satisfaction, but they haven’t figured out how to assemble the framework to efficiently execute it. By following these four fundamentals, a retailer can ensure its retail experience is on brand, simplified, and consistent for the customer. Subsequently, it can open up new opportunities for growth and produce a competitive advantage.
With more shoppers and communities becoming ethically conscious, many retailers are working to decrease their environmental footprint. Reducing waste not only improves brand perception and builds trust with customers, but it also saves retailers unnecessary costs.
One of the best ways retailers can become more sustainable and environmentally conscious is simply to prevent waste from the start. However, this is not so simple of a task. Because each store has unique physical traits, many retailers lack the ability to track and measure stores accurately, and therefore cannot ensure all stores are executed precisely or consistently. This imprecise execution leads to discarded materials, unused product, and unnecessary packaging.
A digital application can simplify the process with a paperless system that is not only more accurate, efficient and up to date, but also much less wasteful.
Adopting a digital application to optimize store execution could fix this frustrating challenge. Here are three ways a good digital application can keep retail waste out of the landfills.
#1 Update the Process
Many retailers still depend on a manual, paper-dependent process. This requires inputting a vast amount of data into spreadsheets that get printed, and adding complex directions into large wasteful binders that are sent to stores. The excess materials are often error-prone, cumbersome, and costly. They become quickly out-of-date and are eventually thrown out.
A digital application can simplify the process with a paperless system that is not only more accurate, efficient and up to date, but also much less wasteful. A digital application helps streamline the process so there is less printing and paper waste overall.
#2 Get the Right Fit
Every store is different, and retailers don’t always know the unique attributes of each store such as space allocation, fixture size, and store layout. This means store teams don’t get what they need. They receive incorrect production quantities and merchandising setups that don’t properly fit, so they are forced to make decisions. Consequently, stores are not executed as planned and materials are wasted.
A digital application keeps an accurate model of each store and calculates correct production quantities resulting in fewer unused materials, eliminating waste in both production and shipment to stores.
#3 Keep It Local
Unfortunately, with many current merchandising systems, retailers can’t recognize individual store’s customer demographics or neighborhood culture. This means stores are regularly stuck with an excess of irrelevant products and campaigns that don’t address local needs.
With a digital application, retailers can keep track of what products are selling in each store, reorder items and track the shipment. A digital application helps deliver an accurate, localized product and promotional mix to each retail location, cutting the waste and expenses of printing and shipping.
Today’s smart shoppers are becoming more mindful about what they purchase. They are becoming ethically and environmentally conscious and expect their favorite brands to follow suit.
Retailers can address customers’ needs by adopting new technologies. A digital cloud-based application can streamline the process to reduce printing and paper waste, and calculate accurate production quantities resulting in fewer materials and lower costs.
However, optimizing retail execution to develop a more sustainable merchandising process is just one of the top outcomes achieved from a digital application.
Retailers can ultimately create a superior retail experience that connects customers to the brand without wasting or sacrificing time, efforts, and costs.
In today’s retail world, customer empowerment is undeniable. Technology has placed a limitless amount of immediate information and purchasing options into customers’ hands. Customers are now exceptionally choosy about where they shop and what they buy.
And so, customers are more likely to purchase when they know their dollars are going to socially responsible companies and good causes. According to a 2015 Cone Communications Study, “90% of consumers will be more likely to trust a company that supports social or environmental issues, while 88% will be more loyal.”
Businesses are obviously paying attention, since corporate philanthropy and corporate social responsibility (CSR) are becoming progressively important topics when thinking about business strategies. Retailers are increasingly looking for ways to incorporate social responsibility into their practices as well as to link ethical products to their brand identities. When exploring social responsibility opportunities, retailers should consider these four main categories.
With the rise of urbanization, retailers are beginning to move into smaller footprints within neighborhoods, so it makes sense that they start in the places they directly affect.
Whether giving to schools, donating necessities to local shelters, or organizing employee volunteer days, contributing to and supporting the local community builds strong relationships, deep connections, and overall trust with the neighbors and customers who shop in their stores.
With many communities banning plastic bags and shoppers buying organic and sustainable products, retailers are taking action to decrease their carbon footprint.
Reducing excess materials and waste, decreasing resource use such as water and power, offering local products to cut down on shipping impacts benefit both the environment and the retailer. Becoming more sustainable and environmentally conscious not only improves brand perception, but it generates efficiency and saves retailers unnecessary costs.
customers are more likely to purchase when they know their dollars are going to socially responsible companies and good causes
With so much access to information, smart, always-connected customers are becoming more aware of where and how a good is made, and they are considering the ethical impact of their purchasing decisions. The Cone Communications Study reports “Eighty-four percent of consumers globally say they seek out responsible products whenever possible, though eight-in-10 (81%) cite availability of these products as the largest barrier to not purchasing more.”
Therefore, offering responsible goods is an opportunity for retailers to stand out from competitors. By providing more products that use fair-trade practices, are humanely produced, and are made from sustainable or recycled materials, retailers can satisfy customer demand, drive more traffic and return purchases, and increase brand strength.
Customers want to expect good about their purchases, and want to support a brand that connects with them on a human level.
Charitable giving and non-profit partnerships are powerful ways to reach the emotionally driven customer. Partnering with customers’ favorite charities enhances the brand’s credibility and reputation. It increases media attention as well as customer-to-customer social sharing. In addition, philanthropy is an opportunity to increase employee engagement. Through volunteer opportunities, fundraising events, and donation-matching, employees heel more connected to the company.
Shoppers are now putting a value on a brand’s level of thoughtfulness and concern for making a difference. Ultimately, people want to do business with a brand they respect. A retailer that gives back not only benefits the communities and customers it serves, but also its bottom line.
What social responsible effort is your brand making? How are your customers reacting?
A customer just made a purchase at your store. She conducted her research online, knew exactly what she wanted, and left with what she came for. This appears to be a perfectly successful transaction.
But, where is this relationship going?
1 in 3 customers look to retailers to educate them to varying degrees
Online shopping options are abundant, so a fast and convenient purchase is no longer enough to keep customers coming back. In order to gain customer loyalty in 2016, retailers need to think beyond the “right product, right price” approach. Sustaining a lasting customer-brand relationship now depends on a unique experience, engaging human interaction, and authentic, meaningful connection.
In response, we’re seeing more and more brands offering workshops and educational opportunities to entice customers and strengthen their brand appeal. According to Small Business Trends, “Nearly one-third (32 percent) of consumers are interested in going to classes or lessons at stores.”
For today’s customers who are constantly connected to digital devices, in-store classes give them a fun, participatory and personalized experience they can’t get online. Here are some retailers using classes to drive traffic to stores, create a welcoming environment, and strengthen shopping appeal.
DIY at Home Depot
Home Depot offers free Do It Yourself workshops, from building to gardening. They even offer kid-friendly tutorials and women’s-only “Do-It-Herself” workshops.
Practice Yoga at Lululemon
Lululemon, the popular yoga and lifestyle clothing retailer, hosts free weekly yoga classes in its stores. Classes are led by certified instructors from the local communities.
Get Outdoors with REI
The outdoor company REI offers both free and fee-based classes for all adventure experience levels, from outdoor photography skills to rock climbing, from backpacking to using a map & compass.
Have an Eye for Beauty at Sephora
Sephora customers can learn about the latest makeup trends, brow shaping techniques, skin fundamentals and more in its beauty and skin care classes. The classes are available nationwide and free to Sephora loyalty rewards members
Start Cooking with Williams-Sonoma
Williams-Sonoma, the premium cooking products retailer, holds complimentary hands-on cooking classes in its stores across the U.S. and Canada. Those who participate also enjoy discounts on store purchases.
Stay Connected at The Apple Store
Apple retail stores provide free hour-long workshops that teach everything from how to use a new device to creating presentations and movies. They even offer youth programs and camps.
By turning their retail spaces into learning platforms, brands not only demonstrate a need for their products, but they also enrich their customers’ everyday lives, create meaningful connections, and drive future visits and repeat purchases.
Retail environments are now much more than places to buy things. Customers care more about experiences than they do about acquiring merchandise. Brands should recognize that the customer’s loyalty depends on the full retail journey. The customer’s desire to return to the store is much greater when the experience is continually fresh, stimulating, interactive, authentic and meaningful.