Traditional retail might be struggling, but digital native brands are showing that there is still room to re-imagine the in-store experience. A growing number of online only retailers are opening physical stores – and there is a lot to be learned from their approach.
Online retailers understand that consumers like to visit physical stores, they like to interact with the products and like to experience them in an environment that allows the brand to express itself in a way that it can’t online. Being online-first is an effective strategy that taps into the convenience that shopper’s love, while nurturing distinctive brand stories that might otherwise be lost in a sea of global outlets.
Though the success of online brands may have been overshadowing the high street over the past 10 years, the nature of retail requires a physical presence in order for customers to truly experience the products that they are looking to buy. It’s not uncommon for 40% of online fashion orders to be returned by the customer without making a purchase. However, at the same time that online retail boomed, providing speed, convenience and a wider selection of products, the traditional high street experience was growing tired.
Now, at a point in their growth that they have matured with enough capital, digital brands have begun to extend offline. Those that have opened stores tend to be focused on marketing and brand rather than pure sales volume. Brands like Amazon, Casper, Sezane and Bonobos have been hugely successful in this approach and injected much needed innovation into the retail experience.
When data becomes insight
Knowledgeable and savvy online brands have begun using data to measure the experience that customers have in store. This model is built on using insight to selectively open stores for a certain time period or location and investing more per store than traditional retailers with large store footprints can afford. The brand gets the advantage of being represented to a higher standard, staff are better trained, and therefore the customer gets a better experience.
Legacy retailers could learn from this approach – does the brand really need as many stores as it has now? Would an investment in store quality be more beneficial in the long run? All retailers should be using the data available to them in order to identify clear pathways. Product assortment and breadth of range, demand and inventory all need to be clearly mapped not just to operate efficiently but to thrive and, through better customer understanding, provide more appealing experiences at every touch point.
A store essentially becomes a ‘showroom’, providing the opportunity to create cross-over spaces that add value to customers without the need to make a purchase. Examples of value added services that have been extremely successful include in-store customer service – as pioneered by Apple’s Genius Bar, supermarket Click and Collect and even delivery from store services (though this often requires scale).
Leaders like Amazon and ASOS consistently innovate and adopt new technology, like the Enki chatbot which can recommend items based on user-submitted images of their favourite clothes, or Amazon’s cashierless store concept, Go. The long-term goal of these technological advances is to give their customer more options and a better experience when shopping, and they make strategic sense with the wider goals of the business.
Building long-term relationships
Another thing that traditional retailers can learn from digital native brands is that online and offline are both part of the wider brand experience and should not be treated as separate channels. Those that ignore this increase the risk that they fail to communicate or work together properly.
Rather than focusing on quantity and purely driving sales, high street retailers should remember that purchases are not a one-time interaction. They should be engaging with and reaching shoppers throughout their entire journey, investing equally across touch points to deliver seamless and memorable experiences that help build trust, loyalty and relationships with customers that chose to return over and over.
The balance of digital and offline shopping continues to change, but the change isn’t unilateral. Yes, shop closures in the UK outweigh new openings, and ecommerce continues to soak up most of the growth in retail spending. However, the high street is not dead. It has just evolved. Retail remains the single largest private sector employer in the UK, with one in 10 people working in retail, and annual sales totalling a staggering £358bn. The pureplay digital retailers now establishing physical footholds are revitalising the high street and also emphasising how vital the offline experience is and its centrality to the future of retail.