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The Future Of Stores: 3 Big Take-Aways

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Last week I attended Future Stores in Seattle. The topic, obviously, was the future of retail stores. There was a blizzard of content – 20 minute rounds of presenters followed by slightly longer panel sessions, followed by roundtable discussions at the end of each day. It would take me pages and pages to report out on what all those retailers and industry experts had to say, so I won’t. Instead, I’ll sum it up with three big take-aways.

1: Retailers are no Longer Afraid of Showrooming

First of all, there wasn’t nearly as much discussion of showrooming as you might’ve expected. I didn’t get to hear every presentation, but outside of the panel on showrooming, the word hardly ever came up, either in presentations or in conversation. And the panel of retailers discussing showrooming all had a very laid-back, un-tense approach to the whole thing. Thus, my conclusion: the fear is gone.

Why? How? Well, mostly it is a rush to return to sanity. Yes, consumers pulling out their mobile phones while standing at the shelf seemed like a “new ” behavior, but in reality it was an old behavior made more easily possible through the application of technology. Consumers have showroomed forever. They just had to be a little more dedicated (drive in your car all over town) than they do with a smartphone.

But it’s not just a return to sanity. There was also a tacit recognition that the store experience needs to do more to inform consumers at the shelf. A recognition that when consumers showroom it’s because (for all but a dedicated few cherry-pickers) they’re not finding all of the information that they need in order to make a purchase decision.

When framed that way, showrooming becomes much less about “how do I compete with Amazon ” and much more about meeting customer needs – and since that is something stores need to get better at anyway, the act of showrooming alone is just not as scary as it used to be.

2: The Customer Experience is Paramount — and Omni-Channel

I don’t think I saw a single presentation about customer experience in store that did not involve leveraging digital in some way. Even if it was as simple as providing visibility into online inventory, or as complex as capturing in-store customer behavior through everything from iBeacons to video, attendees seemed to approach the store experience much more holistically than I’ve seen in the past.

This is encouraging. It wasn’t that long ago that retailers I talked to were focused on “digitizing the store “, which is great, but in the end they still meant for the store to be the stand-alone, be-all/end-all of customer experience. There was very little recognition that there are a lot of shopping behaviors that have moved online – permanently. Like product research.

That’s not to say that in-store research doesn’t happen, but if six out of every ten dollars spent in stores really is influenced by the web in some way, it means that the majority of product research behavior has shifted to online. If your store experience is built around product research, digitizing that experience doesn’t actually help customers.

And that seemed to be version 1.0 of revamping the store experience: I’m not going to change the shopping processes that I support. I’m just going to try to add some flash and digital bling to them to make them more appealing.

What I heard at Future Stores sounded more like this: what my customers want from my stores is different than what they used to want, and I have to design the store experience in the context of supporting an incomplete shopping process – one that has purely online components, and one that has some in-store components.

Which leads me to the next big take-away:

3: The Customer Experience is Differentiating

I’ll pick on just two of the many retailer presentations I saw last week: Combatant Gentlemen and Bed Gear. Theoretically, you couldn’t have two more completely different products: men’s suits and mattresses. And both of the presenters supported that notion. They walked through two completely different shopping processes.

In the case of Combatant Gentlemen, Hafez Adel, the Director of Marketing, presented a compelling case for how differently men shop vs. women, and how his company has carefully designed an experience that supports that different kind of shopping process. The most important thing that this company took to heart was that it’s not about the upsell or cross-sell – it’s about enabling a convenient experience that is so great, shoppers will come back to you time and again. That’s actually a big risk to take in how you design your shopping experience.

In the case of Bed Gear, VP of Strategy Shana Rocheleau presented on how her company has taken the idea of getting a good night’s sleep to nearly athletic training extremes. In her case, the challenge is working primarily through the wholesale channel to make sure that all of the things they’ve learned about good sleep – like, for example, simply making sure you have the right pillow – actually make it to the retailer’s sales floor.

It would be easy to conclude that there isn’t very much that could be learned from these two retailers, unless you are of course selling men’s clothing or mattresses. But there were actually quite a few commonalities between the two – most importantly, a common approach to understanding customer behavior, driven by research, data, testing, and acting on those insights in a non-silo’d way. Their research led them to develop completely different store experiences (in Combatant Gentlemen’s case, the stores are purely pop-up stores at the moment).

To me, that is what is most exciting about the future of stores: if you follow your customers’ needs and work to fill those needs – including the services that support your products, even if you don’t really enable those services today – then you will create an experience that is not easily copied. Why can’t it be copied so easily? Because your competition won’t understand the why behind the strategy.

Here’s a quick example of how that can backfire. When Walmart first became a juggernaut, some competitors tried to copy the things that Walmart did without understanding the strategy behind the tactics. One of the most visible ones was the greeter at the front of the store. Walmart added those greeters, typically elderly and outgoing, to make older shoppers feel more comfortable in the store. Competitors responded with their typical employee base – surly teenagers – and quickly found they were doing more harm than good. Walmart kept its greeters for over thirty years. I don’t think a single competitor lasted a year.

And once you get on the virtuous cycle of understanding customer behavior, it doesn’t matter how fast a follower you have in copying your customer service innovations. Because you’ll understand why you need them, and you’ll also understand when you need something else instead. You’ll always be differentiating, and you’ll always be ahead.

And if that actually comes to pass, stores will be a much more exciting place than they are today.

One final quick note: This was Future Stores’ second year as a conference. It’s clear the event is hitting its stride – I think attendance might have doubled from last year. And the event organizers seem very focused on making this event more than just your typical vendor-retailer mixer. The focus on enabling discussion, enabling the opportunity to learn from each other, is very high. Lots of event companies have tried to create store-focused events, and the need for one has never been higher. This one, I think, has the opportunity to really make it work.

Newsletter Articles July 1, 2014
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