FOOD FOR THOUGHT
MUJI Plaza in Singapore
For the last few years, there has been constant chatter about the imminent decline of brick and mortar retail, caused primarily by the rise of e-commerce. In fact, there is no question that department stores and malls are seeing rapidly declining sales—and traffic—as consumers virtually flock to online stores. Thanks to the various startups that have developed convenient online platforms to help us get everything done with only a few clicks—whether it’s ordering groceries on Instacart, satisfying a food craving on UberEATS, or utilizing 2-day shipping on Amazon to buy a picnic blanket for an upcoming beach day—we are able to painlessly make most purchases on our preferred devices.
However, the not so surprising truth is that most consumers actually still prefer to shop in physical stores. Humans are inherently social creatures, and like to interact and engage with others—in person. We also enjoy using our five senses. When it comes to products, we like to touch, smell, feel, see, and hear. Even though countless Silicon Valley engineers are working day and night to advance AR and VR technology, we are nowhere near a point at which such experiences can replace actual reality. (And that may never truly happen.)
But are all stores and categories of products created equally? The answer is an unequivocal no, which is why we see the widening gap in foot traffic between retail with antiquated, stale concepts and newer ones that incorporate elements that resonate with today’s consumers. Over the years, consumers have developed into more sophisticated shoppers who are savvy about retail, brands, and the companies that are trying to reach them. They are able to quickly and comprehensively conduct information searches online, and educate themselves about the hottest new brands, as well as about an organic ice cream shop that opened up halfway across the world. Armed with information about brands and stores that excite them, consumers can easily choose to avoid the rest.
Simply put, retail businesses that are winning consumers’ hearts are the ones that understand that in the world we live in today, the consumer herself is the most important channel. Omni-channel is the buzz word du jour, but in reality, all retailers increasingly need a direct link to the consumer, regardless of where she is shopping. The reason is that one-click online shopping has commoditized a lot of the consumption process and thus people have become channel-agnostic. As such, when consumers choose to make the trek to a store today, they do so because they are looking for an enjoyable, elevating experience. They expect to walk into a store that looks, feels, and smells pleasant and exciting. They expect to be able to browse an elegantly curated selection of items that pique their interest, and receive thoughtful recommendations and advice from employees should they want it. In other words, they are looking for an experience that is holistic, engaging, and entices them to get off the couch.
Therefore, savvy retail businesses—regardless of whether they are apparel stores or home improvement centers—know that the experience they provide must be differentiated, relevant, and authentic. Bluemercury, a beauty retail chain recently acquired by Macy’s, is an example of a retail company that is successfully growing its store base amid a pronounced decline in retail foot traffic. The company prides itself on having highly trained employees who are extremely knowledgeable about beauty and skincare, and are genuinely interested in helping their customers. They are trained to provide detailed expert advice and to never push products. They understand that selling their products is only part of the reason to have physical stores. With all the e-commerce options available today, it is clear that when consumers step foot in a Bluemercury store, it is because they proactively want to.
Similarly, shopping complexes that are vibrant and buzzing with activity are the ones that employ dynamic elements, and adeptly utilize brand pop-up shops, live entertainment, upscale eateries, and wine tasting events to attract patrons. Eateries where customers can eat and shop are becoming increasingly popular. More than ever, the ability to seamlessly execute carefully thought out, experiential retail concepts is becoming a critical success factor. Physical retail businesses that resonate with consumers and add value to their lives are certainly not dying—they are actually thriving because they understand that consumers’ consumption preferences and behaviors have irreversibly changed. Differentiated retail is here to stay.