This holiday shopping season presents another mega-consumption opportunity that will separate successful retailers from the rest of the pack as the list of 2017 store closures and anticipated 2018 store closures continues to grow. Six weeks from now, consumers across the country will have demonstrated to retailers – with their dollars – just what exactly it is that they are looking for as the new shopping economy takes hold.
My money, literally, is with any retailer that’s willing to give me a memorable in-store experience.
Since the massive influx of online shopping, the world of what is known as “differentiated goods”, or products that vary significantly from retailer to retailer (think clothing, home wares, gadgets), has largely lost sight of the fact that these products require some type of experience or interaction to actually confirm the purchase. Basically this means that I, as a consumer, need to feel the material, try on the size, see the color/pattern, or physically test out the gadget in person before actually deciding to keep that product in my life.
A recent study by PwC confirmed that only 3% of in-store clothing purchases result in returns, while a whopping 25% of online purchases are returned. The numbers tell the story loud and clear – a live interaction with the product is critical for sales retention and retailer success.
But why did shoppers abandon brick and mortar stores in the first place? When online shopping came, well, online, it caused a seemingly overnight and massive disruption in the sales of consumer goods. With revenue shifting away from brick-and-mortar stores, retailers panicked, and like a herd of sheep, they all made the obvious choice: they cut costs. Personnel were let go, wages reduced, and turnover was rampant. Then came the natural consequence of those decisions: terrible shopping experiences in dirty, cluttered, and understaffed stores manned by stressed-out, poorly trained, and inexperienced salespeople. No rational person would subject themselves to that horror show when you could sit on your couch and order the same goods online. So you and I, and everyone else in America, did just that – we stayed home.
Fast forward a decade, and I am not alone in having grown tired of the order-and-return circus that is online shopping. Some savvy brands are finally recognizing this growing consumer frustration and starting to tackle the problem by revamping and reinventing the in-store experience. The most widely known for this is Best Buy, who overhauled their store experience and pricing strategy to do precisely what Amazon cannot – give you an opportunity to look, hold, examine, and discuss their tech gear before hauling that massive box into your living room or wrestling the new mouse out of a clam-shell package that’s more difficult to break into than Fort Knox. Best Buy has realized what consumers already know – online shopping is exhausting and can be ridiculously ineffective for certain goods.
Best Buy’s strategy isn’t just marketing fluff. Earlier this month my husband and I headed to our local Best Buy to check out their inventory for a new computer monitor for our home office. What we encountered was a great selection, multiple salespeople who could speak specifically about the monitors we were looking at (I was truly shocked) and the realization that ordering online would’ve been a disaster since we use a funky space for the office. The in-person evaluation completely changed our plan and allowed us to get something that was the right size and scale for our home – there was value in the in-store experience. Not to mention, it was such a relief to have a fun, enjoyable, and actually helpful and productive visit to a brick-and-mortar store.
Retail shopping has a lot of life and legs in the new economy, as people are burned out after getting burned by shopping online. The future of brick-and-mortar retail (I’m looking at you, clothing stores) is the “showroom” or “gallery” shopping concept. At a showroom, consumers go to a retail location to experience products and then place orders while in-store. Bonobos has already proven the value of their Guideshop model through their acquisition by Walmart, and even Amazon is opening bookstores just to encourage you to download titles to your kindle while you browse. Showrooms offer an opportunity to combine the best of all of shopping elements: excellent service by knowledgeable staff, a comfortable in-store experience, and the opportunity to fully test, try on, and evaluate products with the convenience of shipping directly to your home.
By focusing on the experience of shopping, rather than the transaction of shopping, retailers can bring customers back to brick-and-mortar. This holiday season I’ll be rewarding those retailers that are trying – even if not always succeeding – to deliver a high quality in-store experience. Best Buy has already won my business and my money; what remains to be seen is which other retailers will rise to the occasion, reinvest joy and value in the in-store experience, and ultimately survive in the new shopping economy.
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