The first retail stores date back to 800 BC, when Greek merchants set up shops and began selling their wares in the Agora of Athens. A store was a place for customers to touch, feel, and access inventory, and it needed a location with ample foot traffic to make it viable. While stores have evolved over the years, one of the most important factors in determining their success remained constant – location, location, location.
The rise of the internet and online shopping, however, have eroded the principle that the foundation of retail success is a physical address. Most recently, the onset of Covid-19 and its lockdowns forced both customers and retailers to rethink how all commerce should work. Yet, even before the pandemic, physical stores were closing, and forward-looking companies were already busy reimagining new retail concepts. For example, Nordstrom started opening mini inventory-free outlets, which enabled customers to try on and return items ordered online. Other leading companies, like Adidas, Apple and Nike, turned their stores into the fullest expression of their brand, making a store visit an experiential event for their customers.
This rethink of the fundamental purpose of a store has led to some exciting changes to the landscape of the retail industry. To survive and thrive, retailers need to embrace the future store, one that is multi-purpose and functions in many different ways for customers.
Key functions of the future store
Serving in-store shoppers
This function is that of the traditional shop where inventory is kept, displayed and sold. Store associates are on hand to assist and advise customers, who are free to browse, try, buy, exchange, or return inventory. This function will still need to be there going forward, but it can no longer be the ONLY reason for a store. DTC brands like Bonobos and Warby Parker are pushing the envelope here in that serving in-store shopper is the core purpose of their stores BUT there is no merchandise that the shopper can buy. Merchandise is only used to help shoppers make better decisions. Anything a shopper buys needs to be shipped to them.
Providing an omnichannel presence
Like with Nordstrom, stores should provide a convenient location where online orders can be fulfilled and easily returned in-store. Amazon is a leader here where they have activated Whole Foods stores to be Amazon return centers, and they have opened dedicated Amazon Hub Locker stores for ultra easy pick up and return.
Facilitating omnichannel fulfillment
Future stores are taking omnichannel a step further, activating their own inventory but also becoming mini distribution centers – often called “dark stores”- with fulfillment spanning curbside pickup, ship from store, buy online and pickup in-store (BOPIS), and reserve online and pickup in-store (ROPIS). Omnichannel fulfillment not only supports eCommerce sales, but it can also help generate more overall sales.
Delivering a branded experience
In this function, the store becomes a showcase of the brand, such as Nike or Apple stores. It encapsulates the essence of what the brand means, but it also is a place where customers can get highly personalized support and access to deep product knowledge from an in-house associate. This is an experience that could never be replicated online.
How to approach the post-pandemic retail environment
Retailers need to reimagine the purpose of the traditional store and focus on how they can reconnect with their customers in this new, dynamic post-pandemic shopping environment. Sales associates who had to take their in-store, in-person skills and expertise and adapt them to online interactions during the pandemic need to relearn and revise their one-on-one sales techniques. Technologies, like clienteling software, can take them a large step further, by helping them know and understand individual customer needs to deliver a highly personalized in-store experience.
When it comes to fulfillment, Covid-19 forced retailers to rethink how to get purchases into the hands of their customers. Omnichannel fulfillment options, such as BOPIS and curbside pickup solutions are now not only expected but appreciated by customers. According to The National Retail Federation, over 90% of customers appreciate the convenience of curbside pickup.
Now that Covid-19 restrictions are loosening, in-store sales are starting to improve, but foot traffic will remain sluggish for the foreseeable future. Surprisingly, despite brisk online trading, retailers are still reporting lower overall sales numbers. These poor results, have put a lot more financial pressure on retailers, spiralling into staff cutbacks, reduced service levels, lower turnovers and even store closures. To avoid this retail death spiral, retailers must change their mindset of how the store of the future operates.
4 steps to achieving the successful store of the future
1. Ensure sales associates are engaged
Staff are causal to a sales transaction, not just a fixed ratio vs. sales. Sales associates must be embraced, empowered, and encouraged to stay. Full-time and long-term staff are always more productive and better equipped at helping customers than casual employees.
2. Provide a modern retail experience for customers
Modern retail environments need to turn to technology and software to provide a contemporary, pleasant and personalized shopping experience for their customers.
3. Support sales associates with technology
The future store is a tech-savvy store, where sales associates are enabled with the tools to:
- Connect with their clients and deliver personalized service with the help of technology, such as clienteling software, live connect capabilities, and appointment booking software.
- Transact sales using checkout POS solutions, like mobile POS that ensures checkout and payment transactions are smooth and frictionless, from anywhere inside or outside the store.
- Fulfill or reserve a customer’s order from the in-store inventory, with an easy-to-use, fulfillment solution.
- Operate efficiently and ensure sales associates’ time is being optimized, using staff scheduling and performance planning tools.
4. Engage experts to help build the future store
While retailers know what makes them unique – their “special sauce” – it is best to let the experts design the technology. The best platforms will modernize operations, personalize customer interactions, and transform the omnichannel experience – all to enable retailers to focus on what they do best, serving their customers.
The store of the future is now. Tulip builds mobile platforms and omni tech retail solutions that empower stores, elevate the shopping experience, improve customer service, and increase sales. Subscribe to our blog today to get the latest updates.