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Store of the Future: Retail Industry Trends

Posted by Petra Geiger on Jul 26, 2017
Petra Geiger
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We know that technology is reshaping retail and that the transformation is profound. But specifically, how will it change over the next 5, 10, 15 years? And, what do retailers have to think about as this new reality approaches? There are several key changes that are already under way and will begin to accelerate in the near future. The time to "wait and see" what will happen is coming to a close. Now is the time to experiment, try new things, learn what works best for your brand, your business and your customer.

Doug Stephens writes in his book ReEngineering Retail, "What you'll find is that once we stop treating shopping spaces as product distribution points and begin approaching them as experiential media channels, every aspect of how we plan, design, build, operate and measure their success and effectiveness will implicitly change." From his point of view, retail has changed forever. Because of the digital, communication and transportation revolutions (all of which we are in the midst of), the old "raison d'etre" for the traditional brick and mortar store is over. Today, a big box super store with thousands of SKU's has nothing over ecommerce retailers who can give you access to millions (even billions) of items in mere seconds.

However, an ecommerce store cannot replicate the visceral experience of being immersed in a physical store. The touch, smell, discovery, thrill and most of all community that a "real" store can provide. And, more than likely as we become more tethered to our technology to meet our daily requirements, we will crave the "hands-on" experiences that make shopping fun. So, what does the store of the future look like? What are some of the changes and trends that are beginning to materialize?

Here's a look at 5 key shifts in the store of the future.

Less inventory, more experience.

In our last post, we learned about the rise of new quick shipping options on the horizon - drones, ride-share, driverless cars, mobile distribution points to name a few. It stands to reason then, that the store of the future will no longer need to be a product distribution point packing in as much merchandise as possible. The new store can focus on building brand awareness and building community around a shared love. Think a fitness store that offers yoga classes - why not try out that $75 mat before you buy it. Or a baby store who hosts a new mom's group once a day. Don't believe it? Many brands, including Sonos, are already shifting their strategy away from product and towards experience.

More mobility all around.

Ditch the cash wrap once and for all. Everything will be mobile in the new store of the future. Purchases will be made by mobile device - check out the new Clover Flex - or by self checkout. Retailer Rebecca Minkoff has been experimenting with this for the past year. Couple that with more pop-up retailers testing out concepts, mobile retailers and even malls that rotate their selection of retailers to keep everything fresh for consumers. You get the drift. The goal is to focus on the experience, the thrill, the delight. Keeping it fresh and not overly focused on the immediate transaction.

Sales associate as concierge.

Along these lines, sales associates will need to step up their game. It won't be enough to know how to simply ring up a sale. Sales associates will become the ultimate hosts - managing the customer experience thoughtfully and becoming true brand ambassadors. Smart retailers will begin to look at front-end personnel as assets that require brand training and empowerment. In the short term, associates will need to access data (inventory, customer history) quickly across all channels in easy to use dashboards. But in the long-term, this kind of data will be replaced by self-serve kiosks or even robots (meet Pepper).

The "channels" are replaced by the "journey". 

Today, many retailers focus on their different channels, trying to optimize and manage each outlet separately but efficiently - often having differing strategies for each. But as a consumer, do you ever think of channels? No, you think of the brand as a whole. You could care less about a retailer's internal divisions. As technology improves, becoming increasingly seamless, the focus for retailers will shift to studying their customer's journey and understanding each of their touchpoints in as much detail as possible to ultimately provide superior customer experiences. Retail consultant, Doug Stephens, cites REI as a retailer dedicated to mapping this journey in a very cross-functional way, a brand that is trying to truly understand its customer base. In the future retail scenario, Stephens postulates that the retail journey is flipped; with brick and mortar retail being the beginning of the journey - replacing advertising media as we know it - with ecommerce always being the endpoint for purchase.

Data drives everything. But the metrics change.

Data will be ever present and more important to the future of retail. It will be integrated into our experiences in ways that we might not even be aware of - like traffic counting. We are just at the beginning of being able to mine data and track every touchpoint a consumer has with our brands. And in the future even the smallest retailer will have access to this data. But for brick and mortar retail the metrics might have to change. For instance, think "net promotor score" vs "sales per square foot" as an indication of a store's success. 

Although the change is complex and fluid, there are clear retail industry trends that are emerging. Understanding these shifts can help you make strategic decisions from choosing the right pos software to deciding on the right operational metrics to making staffing decisions. One step at a time. In Part 3, we'll take a look at 5 retailers of varying sizes who are taking a truly fresh approach to retail.

Learn more about how Springboard Retail empowers retailers of the future.

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Other blogs in this series:

Part 1:  Store of the Future: Technology Reshaping Retail

Part 3:  Store of the Future: The Path Forward

 

Topics: Business of Retail

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