A Comeback for Brick-and-Mortar: Solving the E-Commerce Problem

The sharp rise of e-commerce twenty years ago set off a tectonic shift in the retail industry, and we still feel the aftershocks today. Incumbent retailers continuously devise new strategies to maintain their hard-won customer loyalty by figuring out precisely what their customers need and want. It’s increasingly imperative for retailers to make the in-store experience a memorable one if they are to drive consumers to brick-and-mortar. Retailers must adapt brick-and-mortar stores to cater to customers living in the digital age, prioritizing both authenticity and innovation.

Experiential Marketing and Memorable In-Store Experiences

Creating memorable in-store experiences to attract customers is far from a novel concept. In 1909, London department store Selfridges’ must-see attractions included the first television and a full-scale monoplane. The physical store buildings were architectural marvels featuring intricate window displays.  Founder Harry Gordon Selfridge recognized that unique shopping experiences were the key to attracting customers to the store and keeping them there for as long as possible. Over 100 years later, innovative in-store experiences are just as valuable.

Cultivating an authentic link between the experience and the brand is crucial for creating in-store experiences that resonate with consumers. Creative on-brand experiences that offer direct value to the shopper motivate customers to shop in-store. Canada Goose built in-store cold rooms so shoppers can try on jackets in an environment more closely resembling the environment in which they will wear them. This luxury experience is rooted in the brand’s values and provides customers with a pragmatic purpose for shopping in-store impossible to achieve online.

In the grocery space, Lucky’s “Sip and Stroll” program offers patrons $2 pints of beer while shopping, providing an exceptional in-store experience for beer connoisseurs and everyday consumers alike. It serves to make the shopping experience more enjoyable and motivates customers to shop in-store and stay there for longer periods of time.

Digitize Brick-and-Mortar Stores

Unlike Selfridges over 100 years ago, today we have the ability to create flexible and dynamic in-store experiences that reflect the malleability of e-commerce platforms and provide customers with the same affordances available online. Retailers can capitalize on digitization and the Internet of Things to modernize the overall customer experience and increase in-store efficiency.

Chinese tech giant Alibaba opened a brick-and-mortar supermarket called Hema where shoppers can scan QR codes to learn more about products as they shop, such as the exact harvest date of produce. Nike enabled in-store mobile checkout via their app, eliminating the need for customers to wait in checkout lines, as well as enabling easier access to discount codes and promotions. Amazon Go stores have automated the check-out process completely, using cameras and sensors to detect the items customers pick up and charge them accordingly as they leave the store. By implementing technology that has made e-commerce appealing to shoppers, retailers can attract customers to brick-and-mortar stores.

A Win/Win for Customers and Operational Efficiency

Most retailers will develop multi-faceted strategies, rather than going all-in on one solution. Different solutions will make sense for different retailers. While luxury boutiques stand to benefit the most from memorable in-store experiences and larger department stores from automation and digitization, the majority of stores fall somewhere in the middle and need to utilize a balanced approach, increasing operational efficiency as well as facilitating stand-out in-store experiences.  Digital solutions can do both.

The same technology that facilitates stand-out in-store experiences is a vehicle for optimizing store operations. Walmart is experimenting with in-store cameras and sensors that work in tandem to monitor shelving to efficiently fill empty shelf space, ensuring customers have access to all available inventory.  Best Buy is rolling out digital price tags to 150 U.S. locations for an estimated savings of $10 million in merchandising cost, saving in-store employees the hassle of manually re-tagging every item when prices change and providing numerous benefits for customers.

At Amazon’s Four-Star Store in New York, digital price tags display on-shelf product ratings and customer reviews, typically only available online. Digital tags also enable real-time inventory stock information, saving time for both customers and store employees, as well as short-term promotions, simultaneously benefitting the customer and providing retailers with an opportunity to increase sales.

The strategy or combination of strategies implemented by retailers will be determined by the way they want their brands to resonate with customers.  After all, connecting with customers and attracting them to stores are challenges that retailers have been grappling with long before the rise of e-commerce.