The Retail Renaissance: Crafting a Better Shopping Experience

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Topic: Methodology

This article was originally posted on VMSD as separate contributed pieces titled: Has Retail Lost its Way, When Magic Matters, Retail Renaissance and I Want it Here, Now

Retail has lost its way. Not so long ago, people knew their butcher, baker and candlestick maker, and had valued personal relationships with these artisans. Today, too much of retail has become an undifferentiated, one-size-fits-all delivery machine. Competition is steadily increasing – digital advances mean the barriers to entry in the retailer game have never been lower – and people are better informed of options, prices, and alternative channels than ever before. More back-and-forth communication between people and brands means that consumers are leading the way, moving faster and faster, forcing brands to evolve even more quickly, just to keep up.

Big ships turn slow, though, with lots of lead time needed just to change direction, let alone turn 180 degrees. Consider the many big retailers who redesigned or rebranded in 2013, ranging from the widely reported trials and tribulations at JCPenney, to the latest in a never-ending streak of experiments at Target.

All brick and mortar stores are being pressured by new channels with low overhead, ever-expanding offerings and innovative delivery options. IBM reported smartphones were behind 22 percent of this season’s online Black Friday purchases.

The same digital devices that have put consumers increasingly in control of the terms of retail interaction are also constantly distracting them. People complain of being overwhelmed by choice; “retail fatigue” is a thing. In fact, there are threads linking all these seemingly disparate problems. Let’s investigate a few things retailers should already be thinking about – although not all seem to be – in order to stay on top of the game tomorrow.

1. (Re)embrace craft, in every sense of the word.
Refocusing on the craft of selling will help retail find its way again. Examples of highly specialized retailers thriving through attention to the craft of retail are out there, if you look. And they’re not all new.

Selfridges and Harrods have both managed to stay relevant to their consumers for more than a hundred years by continually leading with strong retail narratives. Re-embracing the craft of selling means getting back to storytelling by leveraging both technological and analog strengths. Storytelling needs to happen at every touchpoint – make stores places people want to go, not spaces for stuff. Put on a show. Think bigger than just sales and holiday decorations.

Giving customers an experience along with the goods helps reinforce larger narratives, like Danner has done at Portland’s new Union Way. The product might be available elsewhere, even at a lower cost, but fun and excitement aren’t as easily transferrable. Anthropologie has not lacked for plaudits, and they deserve the credit for building such rich, cohesive presentations. The lifestyle on display in-store – it’s even further developed online – makes Anthropologie feel like a real destination. Even Best Buy, which was slated by many to suffer the same fate as Circuit City, has benefitted from investing back into their store experience, racking up greatly improved sales, with shop-in-shops and revitalized store brands. BBY was up 250% over the course of 2013.

This renaissance isn’t just going to be a return to higher level in-person or online service… it’s also going to require an elevation of the quality, caliber and thoughtfulness of curation and goods.

2. Get comfortable with prototyping all the time (and be prepared to fail, quickly and cheaply.)
To try to keep up with consumer evolution, retailers need to test ideas in-market, as fast and early as possible. Test across every relevant dimension: merchandising and visual marketing, store design, digital tools, products, services. Think of being agile and iterative; don’t lock ideas in a box for months (or years) of development.

Nordstrom’s Innovation Lab, for example, operates like an in-house retail SWAT team, applying technology to improve customer experience by iteratively testing concepts, apps and new service offerings in single stores before rolling out new programs more broadly.

If this sounds scary, consider recent successes with unbranded test labs, like at JCrew’s Liquor Store, or Starbucks’ 15th Ave Coffee & Tea. This is testing with limited brand risk in case of a flop. The future will take courage: to paraphrase Nordstrom’s Ryan Rosensweig, if you’re not failing from time to time, you’re not trying enough.

3. Infuse service (design and thinking) into every touchpoint. Empower. Enable.
Customer-facing brand representatives need to be a rare breed of experts, armed with the knowledge – and enthusiasm – to converse with customers but not talk over their heads. Get comfortable investing in empowered employees. Take time at hiring to ensure your salesforce has the right background and proper motivation, then arm them with training and tools.

Ziba’s recent work on Reebok’s Fit Hub stores is one good example; Sephora University is another. Investing in the ongoing education of a large, decentralized staff, with training well beyond core offerings, helps ensure engaging delivery. The sort of specialization mentioned earlier will help here, too – a one-staff-fits-all approach doesn’t work in highly bespoke environments. How you’re staffed directly drives the service you can provide at retail, which can be thought of in two ways: what services are you offering, and how are they being delivered?

Service offerings embedded into retail opens opportunities for even more impact, through highly personalized product delivery. Apple’s Genius Bars and in-store theaters turn a purchase experience into an ongoing ownership narrative; without one-on-one counseling, lectures and development workshops, Apple would just be running another electronics store, and not the one with the lowest prices.

Consider JCrew’s Very Personal Stylist service, which offers shopping and fitting advice, along with a host of other conveniences, all on the consumer’s terms: flexible store hours, door-to-door delivery and returns, and detailed recordkeeping of your preferences with no purchase minimums and no added cost.

Define new value with unified, interwoven digital and analog channels, leveraging the strengths of both.

Whither the Future?
These three keys – storytelling, testing and service – should be considered retail fundamentals. The next step? Real omnichannel retail. This is a sore subject for a lot of businesses, because omnichannel got off to a bad start as a complex, stressful must-have. In many cases, ‘omnichannel’ only functioned as a stand-in term for ‘digital,’ but that’s not what it really is, or not all it should be. Omnichannel means seamless experiences that span all consumer channels, physical and digital. And that’s the future.

Sound far-fetched? Consider Apple hiring Angela Ahrendts from Burberry, with her explicit charge to unite online and brick-and-mortar retail offerings at the most valuable brand on Earth. Or think of what Disney has been working toward for years, and now stands to realize, with the recently introduced MagicBand. This personalized, wearable technology takes the place of a ticket and handles in-park payment for food or souvenir purchases, as well as (possibly) allowing Cinderella to spontaneously greet your children by name when they arrive on the steps of her castle. And that’s just for starters: Disney says even wider, deeper integration is coming.

The MagicBand is as close to perfect as seamless integration of digital and physical gets, today. Highly choreographed delivery and a consistent narrative extends everywhere guests look and to everything they touch in person and online, whether they’re planning at home, en route, or in the midst of a visit to the Magic Kingdom. Regardless of who you attribute the idea to – Arthur C. Clarke and Charles Fort are both contenders – the basic premise here is “[a]ny sufficiently advanced technology is indistinguishable from magic.”

Let’s be clear: magic isn’t homogenized or undifferentiated, and “seamless” shouldn’t be, either. Too often, lately, omnichannel has ended up diluted into endless-aisle e-commerce, actually failing to deliver much in the way of experience, and it still represents less than 10% of retail sales. Not all of this retail evolution will be consumer facing, and not all of it will be sexy; it’s going to take a lot of hard work on backend operations to bring that number up, making magic your customers will never really see. They’ll know it’s there, though, when they experience it.

Even behind-the-scenes functions have the capacity to support differentiation. Ship-to-store and now same-day in-store pickup at Walmart is just the tip of the iceberg. How do you feel about Amazon’s latest delivery innovation announcement, Prime Air? Drones are actually perfectly on-brand, for the world’s biggest online retailer; Mr. Bezos and company are also busy automating shipping facilities, along with who knows what else. This kind of fulfilment may be back-end, but it has the potential to become consumer-facing, and either way, it’s unquestionably a part of retail service delivery.

Nordstroms pioneered this kind of tangible/intangible delivery integration many years ago, tying inventory from every channel together and shipping – regardless of point of origin – straight to the customer’s door. This isn’t surprising, given Nordstroms’ dedication to innovation in service, but now Macy’s and even KMart is following suit.

Right now, lots of retailers are scrambling just to keep up, and get digital offerings up to parity with competitors’. Start thinking more broadly about differentiation, and leveraging what makes your story different, your products special, and your services unmistakable. Being a better retailer means telling better stories, and celebrating regional, historical or experiential difference. “I want to design every single Starbucks store differently. When you’re in a crowded market, it allows you to stand out.” says Thom Breslin, Starbucks Design Director. The Boston Globe published research recently indicating increasingly ubiquitous touch-enabled tech – both in-store and on tablets at home – stands to better connect with people currently feeling alienated by clicking a mouse.

Beyond just e-commerce, the future will see digital insights manifested in store environments. This is a good first step toward more engaging, personalized retail experiences. Think about how to harness customer data, and what that information might mean for the services you offer and deliver in store, in the future. Amazon-style predictive product curation is still just a dream for most brick-and-mortar retailers, but an offering of that caliber is going to be nonnegotiable soon.
The omnichannel trend is truly fueled by big data: just right, just for you, right now. More data will means mass customization, whenever and wherever. And that might yield a renaissance for retail: heightened emotions, more discovery, and a return to truly engaging shopping experiences.

Business leaders that grasp this are making meaningful reorganization of their merchandising, marketing and design teams a priority today. Director of Store Design and Visual Merchandising Elizabeth Dowd led a complete overhauled at REI recently, doing away with siloed departments. Now sales, messaging, and product design are fully integrated and working collaboratively.

It’s crucial to maintain perspective on your existing organizational culture, however. If your company isn’t ready to embrace seamless omnichannel, build bridges – or institute a series of smaller, gradual shifts – to support new strategies. This will take more than just securing a budget. Without staffing contingencies and real executive support, in fact, funding for radical design changes can be a recipe for real trouble… most organizations can’t tolerate a Ron-Johnson-level stumble.

Storytelling, whether you’re selling peanuts or whole lifestyles, is the warp to strong delivery’s weft. Put them together and you’ve got the fabric of cross-threaded retail omnichannel. Without a clear sense of narrative, derived from authoritative handling of ownable value propositions, brands today are lost. Making magic will require nuanced attention to everything from messaging, to presentation, to staffing.

Focus on finding your magic, and delivering it with no seams, regardless of channel. Disney seems to think the answer lies in a wearable device; iBeacon indicates similar ideas in Cupertino. Regardless of how things manifest technologically, what omnichannel really means is true integration: physical, digital, and whatever comes next.
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