Bricks-and-mortar retailers are coming apart brick by solid brick, as they continue to succumb to the compounding pressure from e-commerce retailers.
The first three months of last year alone saw nine retailers file for bankruptcy protection, which was the total number who did so in all of 2016. The fact that major retailers such as BCBG MaxAzria, Michael Kors, J.C. Penney, Macy’s, Abercrombie and Fitch, and most recently, Toys “R” Us are reconsidering their bricks-and-mortar strategies should come as a warning sign for all retailers far and wide.
Is a shift from bricks to clicks the strategy retailers should adopt to survive?
To find the right strategy, retailers will need to first understand what today’s consumers want. The strategies used in capturing the hearts, minds and purse strings of the baby-boomer generation now hardly apply to the millennial generation. The fact that millennials are set to form 50% of the global workforce by 2020 means retailers are already overdue for a seismic shift in their retail strategy.
For starters, millennials are also known to be the “life hack” generation, where they actively seek out informal solutions that allow them to achieve the same tasks with greater efficiency and productivity. These “life hackers” are also known to favour experiences over the actual purchase, focusing on the journey, rather than the destination. This being established, how can bricksand-mortar retailers then go about creating a journey within the confines of their shops’ four walls?
With millennials more enthused on the lead-up to the purchase more than the item of purchase itself, physical store retailers need to guarantee a frictionless shopping experience that allows shoppers to also perpetuate their “life hack” approach to life. The first order of business is then to find out why shoppers are gravitating towards e-commerce, and how to ensure those pull factors are incorporated in the rebirth of bricks-and-mortar outlets as click-and-mortar experience centres. This would form retailers’ first ventures into a true omnichannel retail strategy.
Research shows that 68% of all millennials demand an integrated, seamless experience regardless of channel. While e-commerce is known to be relatively seamless, with purchases or purchase queries made easily in a matter of clicks, the same may not be true for bricks-and-mortar retail outlets. In today’s physical stores, any form of assistance is typically reliant on the shopper approaching store employees, who are normally outnumbered by customers in a disproportionate ratio. When faced with such a scenario, shoppers may choose to consult with Google on their phones to aid them in their enquiries. These processes are disruptive to the overall in-store experience for the shopper and may result in them leaving the store in frustration.
Seamlessness in the bricks-and-mortar store context should see personalised services delivered right into the hands of the customer on demand, playing to the instantaneous service that shoppers today demand — giving them personalised service without having the need to disrupt the overall flow of their visit to the store. This digital, interactive and hyper-personalised physical shopping experience works as an extension of the brand, and will see physical bricks-and-mortar stores as brand experience centres rather than just “the store” or “the shop”.
Beacon of light
Dubai, known for having everything glitzy and new, is home to a futuristic supermarket that is a shining beacon for how in-store engagement should be conducted in today’s context. Shoppers’ personal devices are connected to the supermarket’s indoor positioning system via an app, which is able to pin the location of each shopper through connected lighting fixtures overhead.
Each light fixture in the supermarket delivers light beyond illumination by sending out a unique light frequency that is picked up by the front-facing camera on a shopper’s personal smart device to ascertain the user’s exact position in the store. The system is then able to deliver in-store navigation, leading shoppers to the products they are looking for, and even goes as far as planning out entire routes for the shopper based on the shopping list he/she provides via the app.
This state-of-the-art system works beyond the supermarket context, and also acts as a virtual personal shopper, suggesting products on promotion that fit the buying habits of the individual shopper. It can recommend complementary products based on items already on their shopping list.
By being aware of the user’s physical location in the store, the system is also able to alert the shopper to promotions on items in the immediate vicinity that are congruent to the shopper’s consumption patterns. This level of personal attention and service provided forms a stellar example of how the benefits of e-commerce and the traditional bricks-and-mortar store setting can come together in an effective marriage, bringing heightened levels of engagements to today’s connected shopper.
Moreover, with a system like this, retailers can look forward to making data-driven decisions aided by the connected lighting fixtures, analysing and delivering what the consumer truly wants, when they want it.
Although millennials today wax lyrical on all things online and connected, there is still no way for them to physically touch, feel and experience products online. The clicks-and-bricks model represents a win-win situation that achieves a high level of engagement that millennials cherish in their online pursuits while allowing them to have a physical touch, feel and experience of the product before committing to the purchase — another “life hack” that would most likely get them excited for the malls and shops of the future.
As for today’s bricks-and-mortar shops, the clicks-and-bricks retail concept comes as an evolution of an omni-channel retail strategy, promising to win back shoppers who have in recent years become armchair shoppers. This might well bring lustre back to the ailing global retail industry. It is almost as though these state-of-the-art connected lighting fixtures are looking down on retail store floors singing: “I will try and fix you”.