Retail is dead. Long live retail.
For the longest time, retail innovation was limited to product placement and pricing changes. Similar to the world of advertising and marketing which has come a long way since the yesteryear Mad Men era of smoke and mirrors to the social media age of transparency and authenticity, retailers are now finding themselves disrupted and with good reason. The rise of e-commerce, especially with giants such as Amazon and Alibaba in the marketplace, has given customers options. The competitive landscape has been dramatically altered. But, this isn’t necessarily bad news. In fact, it’s actually a very exciting time to be a traditional (albeit innovative) retailer.
Here are a couple of indicators that brick and mortar isn’t going away anytime soon.
- Amazon just purchased Whole Foods. Why does the biggest e-retailer purchase a brick and mortar business? Simple – they go where the people are, and people are still very much shopping in stores. While e-commerce has greater visibility and more clicks, stores have higher conversion rates and higher profit margins.
- Even e-commerce only retailers, such as Bonobos and Warby Parker, are extending their virtual presence into physical locations. And, smart manufacturers like Shaw Floors, for example, are helping their retailers better market their local businesses as well.
- Younger consumers, millennials and Gen Z, prefer the brick and mortar experience. I’ve written here before on how retailers are missing the mark when it comes to millennials.
Here are the three areas where retailers can shift their perspective, start asking the right questions, and yield dramatic results.
Retailers need a mindset shift from being mere sellers to true purveyors of experience. Think high-touch not just high-tech. Here’s what Ron Johnson, the creator of the Apple stores, had to say in an interview with HBR:
“A store has got to be much more than a place to acquire merchandise. It’s got to help people enrich their lives. If the store just fulfills a specific product need, it’s not creating new types of value for the consumer. It’s transacting. Any website can do that. But if a store can help shoppers find outfits that make them feel better about themselves, for instance, or introduce them to a new device that can change the way they communicate, the store is adding value beyond simply providing merchandise. The stores that can do that will take the lead.”
Old Question: How do we sell more stuff? This is a transactional question. Retailers who…