Changing Priorities for Stores and Shops

Store and shop owners need to adjust to changes in shopper behaviour; for example: shoppers do more research online on products of relevance before visiting a physical store — they prepare for their visit and come more informed; shoppers visit a physical store or shop to browse and inspect merchandise on display first hand but make their purchases via digital channels later online at home or even via a mobile app while still on premises of the store or shop; furthermore, the expectations of shoppers from brick-and-mortar stores are changing — shoppers are looking for experiences rather than for the products per se.

In other words, shoppers can conveniently purchase the products they want through digital channels whereas the store can create for them a vivid and enjoyable experience in the physical space that they cannot have in the virtual, digital space. The new forming patterns of shopping behaviour call on retailers to adapt and modify the purpose and strategy of their physical stores and shops, including interior design, merchandising, and service at the store.

Jill Avery (Senior Lecturer of Business Administration) and Antonio Moreno (Associate Professor of Business Administration) of Harvard Business School explain how the scene of retailing is re-shaping. In their interview they describe what has already started to happen, through examples of actions practically taken by retailers, and suggest what moves and changes can be expected or have yet to come. [“Brick-and-Mortar Stores Are Making a Comeback”, HBS Working Knowledge, 28 October 2019.]

Here are some thinking points following the discussion by Avery and Moreno of the ‘new rules of retail’:

The worldview that a store is made to stockpile products, while the shoppers come to take possession of products, has to change. The focus should shift to different consumer goals such as learning about and having experiences with products. Avery talks about a new worldview in which stores should create branded experiences. The challenge according to Avery and Moreno is to decouple the experiential potentials of a physical store from the transactional aspect of purchasing and taking possession of products to bring home. Moreno adds by projecting: “What probably will not survive are the retailers that are more like a warehouse, or just physical repositories of products.”

There could be at least two avenues in which stores and shops may evolve: (1) Showcase in the store only a few items of selected products (e.g., favourites, recommended) in an inviting and appealing display. Only a portion of the merchandise that the retailer can make available to customers would be physically on display at any given time. Interactive screen displays will allow shoppers to search and browse additional products from the inventory, and consult with ‘counsellors’ of the store if needed. Video demonstrations may also play on larger screens. Ordering may be done anytime during or after the store visit. (2) Place desks or counters where shoppers can observe a product closely, hold it, and try to apply, work or play with (e.g., the model put forward by Apple Stores). Shoppers would be invited to ask for guidance from store ‘counsellors’. This couple of avenues can be utilised of course in tandem, complementing each other.

A key advantage of visiting a physical store remains the possibility of obtaining a needed or desired product instantly, and not waiting for its arrival by delivery at home when ordering online. However this is not always and in every situation the top priority. Besides, delivery times for many products are getting shorter, and ordered products may also be collected in the same store or another specified one after a short delay (e.g., a few hours to a day or two). Retailers will be tasked with finding ways to keep products closer to stores and to provide them faster to their customers.

An appealing shopping experience is not created by simply having

a shopper visit and go around the store observing the merchandise.  An experience needs to be developed to have a special flavour by being more personalised, offering a practical value while being interesting or entertaining, or both (as in examples of Warby Parker for eyeglasses, given by Moreno, or Glossier in cosmetics, given by Avrey). The objective of the retail store shifts from immediately selling to introducing the brand to consumers-shoppers; and as Avrey suggests, moreover allowing shoppers to share their experiences via social media.

• In following Pine and Gilmore (The Experience Economy), every shopping experience can, or actually should have, an element of a show.

Another important aspect to consider is finding ways to hold the shopper from running through the store, or figuring out how to be hospitable to the patrons without intruding. It could be achieved by making the shopper navigate through a store in a non-linear way (think for instance of the long-and-winding path in Ikea stores) or initiating a friendly conversation with the customer (referring for example to barristas at Starbucks). The message to retailers is: Do not refrain from introducing friction intentionally to slow down or halt the flow of the shopping trip; in the words of Avrey, relating to the shopper: “making you linger, and pause and consider, rather than an easy search-and-grab“.

Finally, it is evidently crucial for retaliers to maintain and advance a current linkage between the offline and online domains. This linkage should manifest in a live (real-time), interactive and well-coordinated connection between the physical space of the retail venue (e.g., store or shop, coffee shop or restaurant, service centre) and the digital-virtual space of the website and mobile app, plus communications through social media, e-mails and text messages (SMSs). Maintaining such a connection between the domains can have multiple functions and benefits:

1. Allowing the shopper to take actions with a retailer’s app while in-store (e.g., view product information, search for promotions and special offers, ordering and paying);
2. Enabling a shopper to take a follow-up action on his or her activity in the store at a later time while the retailer collects valuable information about the shopping trip that can be utilised for initiating, for instance, follow-up offers or reminders to the customer-shopper (cf. Moreno in regard to Warby Parker);
3. When consumers order or pay for products using digital channels, it may still be appropriate and fair to attribute purchases to the store in the shopping journey where the choices have been made — a connection between domains can inform the retailer what store contributed predominantly to the purchase decision and enable the retailer to give credit to that store.

The new kind of shopping at retail stores and shops as outlined above probably will not be appetising to everyone (e.g., especially less to Generation X and older consumers). Retailers also do not seem to be in a hurry to reformat their retailing models. Demand for shopping and buying products on location to take right away is likely to prevail for an indefinite time; so it seems more likely that we will continue to see a mixture of retailing formats and styles at brick-and-mortar stores. Yet, a gradual process of re-shaping the retail scene will go on with more stores and shops adopting new forms of retailing, different than what we have been accustomed to find in recent decades.