The renaissance of brick-and-mortar retail is happening slowly but surely. Recent events have highlighted the emergence of new concepts that are being introduced to improve the in-store experience and to maximize the likelihood of store visitors to shop, while in store. Some of these concepts include the generalization of the price matching model in retail stores, the installation of specialty “store-within-the-store” models with exclusive offerings, the modification of the traditional store layout, and, more recently, the experimentation with the omnichannel store positioning. So it is happening! The brick-and-mortar retail chains are fighting back and experimenting with new concepts. Some may say “it is about time” but the reality is that making changes in the retail business can be risky and costly, as JC Penney found out over the past couple of years.
A recent research study by Marc Research reports some amazing facts:
– 84% of smartphone shoppers use their devices to help them shop while in the store.
– Instead of going directly to a site or app, 82% of shoppers use search engines for browsing product information while in-store.
– Frequent mobile shoppers spend 25% more in-store than people who only occasionally use a mobile phone to help with shopping.
– 1 in 3 shoppers use their smartphones to find information instead of asking store employees. This number increases to 48% for electronics.
– 53% make price comparisons using smartphones while in stores.
A recent retail survey by Squire Sanders, Kantar Retail and the Retail Trust included interviews with consumers, retailers and suppliers about the state of the UK retail industry. The findings reveal that whilst many retailers recognize the emergence of multichannel retailing, few are yet to exploit the trend and develop an integrated approach to leverage technology and improve the shopper’s experience.
But not all of them at sleeping at the wheel. Staples has taken the lead and has launched an omnichannel store which changes the game. They will convert 45 of their more than 1,500 stores. This is a game changing repositioning of the Staples store concept. The premise of the omnichannel concept is to invite mobile shoppers to use kiosks or in-store equipment to shop instead of their smartphones.
Let us look at some of the implications:
1) The retail configuration is changing dramatically with less SKUs and smaller stores. Fixed costs are reduced and cash flow requirements are dramatically lower.
2) Smaller brick-and-mortar stores can be placed in novel locations to attract shoppers: malls, airports, downtown areas, etc.
3) The culture of the large retailers has to evolve from a pure brick-and-mortar one to a hybrid technological retail one. Employees have to learn new processes, know technology inside and out, and be fluent in price matching models.
4) Technology is becoming the heart of the business model with advanced integrated software managing the marketing and supply chain processes. With over 40% of sales coming from online platforms, Staples is slowly becoming an internet retailer!
5) Price intelligence software has to be part of the technological core of the omnichannel positioning. There is no room for error. Price matching and scrubbing has to be fast, accurate and user-friendly. This is well beyond price intelligence 2.0. We are leapfrogging to 4.0!
There is no stopping technology and the changing shopping behaviors. It is just the beginning in fact. Shoppers love their smartphones and use them to shop before visiting a store and while in the store. The omnichannel phenomenon is a reality and a response to these changing shopping behaviors. The omnichannel positioning responds to two critical retail trends: the Amazon dominance and the showrooming behavior. Price intelligence technology is a must have to succeed in the omnistore concept.