The end of physical stores as we know them
During the three busy days at NRF 2018 Retail’s Big Show in New York, the buzz phrase seemed to be “bricks-and-mortar”. While the last few years indicated a fall in physical store numbers and attractiveness globally, surprisingly the message could not be more different at this year’s retail show! IBM, SAP, Microsoft, Adobe were amongst the many technology providers onsite to tell us with tremendous energy and hope that the store has a future, and it is all about reinvention and innovation. Bricks and mortar is not dead! It will need to take on a new role! That’s what we heard again and again.
In recent years, retailers spent a lot of time thinking about their online presence and how to enhance digital marketing and product delivery processes around the web shop. However, with the rise in e-commerce, the role of the store is changing. It is going to be the central hub between supply chains and web shops: Options such as "click & collect" do not only offer an interesting delivery service for the customer, but also opportunities for the retailer to establish the store as an important customer contact point and increase the size of the online customer's shopping cart in the store.
Only those store brands who succeed in giving the customer not just a place for purchasing or picking up goods but a real shopping experience, will become rewarded by loyal customers and rising sales. This will only be possible if bricks-and-mortar is digitalized.
Accordingly, IT providers are soliciting retail companies with analytics solutions in particular, to provide a basis for optimized and personalized service offerings. With artificial intelligence (AI) at the heart of technology and supported by innovations like face recognition sensors, real-time location systems and smart apps, experts out there help retailers to reinvent themselves, optimize customer experience and bring the buyers back into the stores again. Smart store furniture, AR/VR headsets and smart agents are only a few examples of many in-store solutions provided by the major and smaller players in the industry further helping in this regard.
Lastly, it is not all about customer experience! Focusing on employees is an important part of this innovative journey. There will be no optimized customer experience if the store associates do not feel supported or heard by their management and if they do not get the right digital tools and training to operate efficiently, collaborate with colleagues, strongly engage with costumers – and stay motivated. As a result, on the back-end side, the buzz around employee engagement solutions is increasing. On the front-end side, sales personnel will increasingly get access to interactive retail applications that provide product, inventory and customer relationship insights.
Amazon Go opening this week is a great example of how innovative technologies support highly experienced and engaged store employees to assist customers in the store of the future, since they have been freed from very basic tasks such as checking out or weighing.
In general, from PAC’s point of view, having dedicated teams that can work on innovative topics and proof of concepts – alone or even better with partners – will be of utmost importance for digitally transforming retailers to succeed.