As consumers purchase online more frequently, and in larger volumes, the experience of shopping in brick-and-mortar stores is changing. Consumers these days could be looking for something different than before when shopping in stores; and so, the roles of physical stores also have to be modified with the changes in consumers’ tastes and shopping behaviour.

Consumers may not need the availability of a great variety and assortment of products in the store as much as before when they can find almost everything they need and is on offer by the retailer on its website or mobile app e-store. When the shopper gets into a store, even a large store, he or she may not necessarily expect to find the specific type and design of product required or preferred. Instead of that kind of guarantee of availability, shoppers seem to be more interested in the opportunity to explore, try and experiment at first hand with products of the types the retailer offers, and perhaps get some personal guidance and advice from a savvy seller in the store (e.g., see the concept created by Apple Stores). This may be accompanied by some sort of a show, decoration and staged events.

The retailer still needs to display a substantial variety of products accessible to shoppers visiting a store, but apparently less than before, and the assortment within a product class can be even more reduced (i.e., fewer brands, models or designs). The display of merchandise in-store will be designated more for sampling, from which shoppers can select. buy and take immediately. What shoppers cannot find from the retailer in-store, they will be able to retrieve from the e-store. Therefore, the offerings of products available in physical stores and the offerings of products available from the electronic ‘catalogue’ of an e-store should be made approachable to shoppers in the store in a dynamic, transparent, complementary, and flexible manner.

  • In an interview to Fortune (Dec. 2021/Jan. 2022), Jeff Gennette, CEO of Macy’s department stores, tells about the measures the retailer is taking to sustain the viability and desirability of the department stores to consumers. First, the retailer is inclined towards keeping leaner inventories in stores, which means less merchandise to display in shopping or selling areas. Macy’s is benefitting from this, according to Gennette, because shoppers are saying the stores feel less cluttered, and it helps them to see better what the retailer has to offer them. A second important measure is to enhance the personalisation of product offerings to customers: being able, for instance, to “curate fashion for someone’s individual style”, and forward their offering suggestions when and how it would better suit shoppers to receive them. Third, taking action to match personal preferences of different customers rightly is done across all touch points, in stores and digital. Gennette says he believes that department stores are as relevant today as they have been in the past, but they have to be different. [1]

In a first step for implementing the approach described above, a retailer would install information ‘kiosks’ in any of its stores, located in different spots of the shopping area — each ‘kiosk’ is an interactive display of products on a large touch screen (TV-size), positioned, say, in 450-600 angle. The offerings should include any products available on-premises and online [2]. A shopper may of course use his or her own smartphone or tablet to browse the catalogue online. However, a large-screen interactive interface can provide some unique advantages: (1) less effort and greater convenience viewing the enlarged visual display and interacting with it; (2) timely and adaptive linkage between product items picked from merchandise displays in the store and related items from the total catalogue or inventory of the retailer (e.g., matching or complementing items); (3) animated and simulated 3D displays of products. that can be rotated for viewing from different angles, in higher graphic quality than may be provided on one’s own device.

  • For example: Suppose Helena, while shopping in a fashion store or department, likes the style of shirts she finds on a shelf display and picks two of them in different colours to try on. She then also selects a pair of trousers she believes would fit with the design (cut) of shirt. Yet, Helena is not sure if their colours quite match, and wonders if she might find the same shirt in a different colour, though not displayed in the store, that would make a better match with the trousers.
  • Hence, Helena goes to the information kiosk digital display, scans the shirt’s QR/barcode and asks to see the shirt in more colours if possible; she might then add to the display the pair of trousers, as she picked-up in the store, to see if it can indeed match better with a shirt in another colour (hue, brightness, or pattern). Finally, Helena ponders the purchase of a light jacket to go well with her outfit. The fashion virtual assistant may help her find a fitting jacket from the collection, which she may then find available on display or that she can order ‘online’ from the overall catalogue at the information kiosk in-store. Helena’s shopping ‘basket’ may finally be composed of items taken from display in the store and ordered from the catalogue (Note: The shopping process with the digital interface can be extended or upgraded into an application of a virtual dressing room.)

Methods for Fulfillment

If a narrower breadth of merchandise is accessible to shoppers visiting a store, a question arises how the shoppers can obtain products to be found through the information kiosk together with those available on display while being in the store. That is, a retailer should address how shoppers-visitors can be helped to add product variants, styles or models that better match their preferences to their shopping basket on premises. It should be in the interest of the retailer to lower the likelihood that a shopper leaves the store empty handed, or at least level-down his or her feeling of leaving empty handed.

One approach could be to divide the shopping area and take some of it away from shoppers for storing some of the products in a backroom inventory. That approach would seem now a little outdated, as the dominant approach in recent decades has been that inventory is largely whatever is on display. Retailers would not want to return to occupy large spaces for backroom inventory due to high cost of real estate, especially in large cities, and the cost of employing workers, time spent and operating fuss, to find and bring required merchandise from the inventory to customers. Backroom inventories are not entirely eliminated, and it happens that a seller has to replenish items missing from display, but the store management would probably decline to expand their backroom inventory (if change is made at all, the tendency is to reduce the overall area of the store, including the shopping area).

A second option, that would seem more appealing to retailers now, is to allow shoppers to order a product sought, which is not available on premises, to be supplied from a distant (out-of-town) fulfillment centre. The product would be brought to the store for later pick-up or delivered to the shopper’s home; it is crucial, however, that “later” should mean in a day or two. This option would essentially put orders made through the in-store information kiosk and other online orders on the same level of service. Nonetheless, it could be more appropriate to give priority to orders made in-store and ensure that customers receive their complementing products as soon as possible since: (a) these customers already arrived to the store to do their shopping, and (b) shopping baskets started in the store should not be left ‘hanging in the air’ for long without completely fulfilling them.

A third option, that could set a direction for the future, is to provide items not on display in the shopping area from a micro fulfillment facility located in a backroom section of the store, not accessible to shoppers-visitors. In the micro fulfillment centre (MFC), a robotic vehicle, equipped with a lift and arm, travels in narrow pathways between shelfing structures, picks-up requested items and fetches them to a disposal station where a service representative collects and passes the items to a customer. The storage space is so condensed that actually human workers should not go inside — it is all run by advanced intelligent technology, driven by data from the ordering and inventory systems. Items would be retrieved and provided to the shopper-buyer within the next hour and no later than the same day. If organised properly, the store staff may practically be able to hand the requested item to the shopper-customer in just a few minutes at a service or cashier counter.

The same kind of robotic technology is also utilised in large fulfillment centres (warehouse-size) housed in buildings in industrial or peripheral areas, dedicated to fulfilling online orders made by shoppers from anywhere, anytime. Unlike those large centres, micro fulfillment centres are smaller and condensed, and are located much closer to where the consumers-shoppers live and shop around (city centres, neighbourhoods). The MFC is originally aimed at preparing food and grocery online orders faster and more efficiently, and provide or deliver them more readily to customers living closer to a store in their area of residence [3]. The purpose suggested here is to employ the MFC facility to allow for reduction in variety and assortment of merchandise displayed in the shopping area of a large store (e.g., a department store). Surely, there will be a limit to how much more merchandise can be kept ready-to-supply in the MFC, but it should hold more merchandise than in a traditional backroom inventory, and would require less labour of human staff to go back and forth to retrieve and fetch items to customers.

Visual merchandising still has an important role in creating visually appealing and inviting displays to shoppers, to impress and encourage them to explore, pick-up and try products from displays. The store also has to provide shoppers with comfortable settings and a friendly opportunity to touch, try on or play with products they may be interested in.

It is hard to deny that there is still convenience and satisfaction in finding whatever a consumer-shopper may need in one place, for example for wearing or for the home. Hence, variety and abundance on display may continue to be sought after in department stores and other large stores. But the ways in which consumers select and collect needed and desired products in the store may become more versatile and mixed if they get the appropriate setting, opportunity, assistance and useful tools to construct their shopping baskets by different means and have them fulfilled with minimum delay to none.

Notes:

[1] The Conversation: With Jeff Gennette, interview by Phil Wahba, Fortune (Europe Edition), December 2021/ January 2022, pp. 6-9.

[2] An information ‘kiosks’ of this kind was seen in a department store of Marks & Spencer in London two years ago (i.e., before travel bans and other restrictions were inflicted by the coronavirus pandemic).

[3] MFCs can be applied in some other areas. For example, a pharmacy in a store of Super-Pharm retail chain (Tel-Aviv) installed a micro fulfillment facility in an enclosed space behind-the-scenes to bring medications from storage to the pharmacists serving customers at the counter — gone are most of the cupboards with many drawers as medications can reach the pharmacist on a tunnel tray within a minute.

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