Let’s go back to the store, let’s have some fun

Michele Caprini
21/05/2021
In brief
Even before the health emergency, it was widely believed that the traditional store was destined to become tomorrow’s vintage classic, replaced by e-commerce. Not so. The store is alive and kicking and, in fact, supports the success of online sales, rather than suffering them. The customization of the offer and the shopping journey is crucial, and customer entertainment, in its various forms, is an important part of it.

That the store, like restaurants, had suffered dramatically from the pandemic is nothing new to anyone. That in the same period e-commerce has risen as the natural winner and satisfied many needs, not even. It’s game over then? Not really!

The waiting

The key word seems to be ‘waiting’; impatiently, moreover. In the United States, where, at the time of writing, 35% of the population had been fully vaccinated, compared to 13% in Italy, the figures speak for themselves. Nearly 50% of consumers surveyed in the first quarter of 2021 by 451 Research said they plan to ‘immediately’ start making purchases in stores after the end of the restrictions: 23% within three months of this, and 17% thereafter.

In Italy, compared to March 2020, ISTAT data show the anticipated growth of e-commerce (+39.9%), but also the increase in retail sales in traditional distribution channels: large chains (+17.0%) and stores operating on small areas (+27.8%). Already what was a necessity has been turned into a virtue with the introduction of touchless retail, and the conditions for a return to the store window and counter are stronger than ever.

The return

The questions at this point are clear: what will the return be characterized by?; what will accompany customers in the store? Even though with a different emphasis depending on the product categories, the answer is the same: it will be necessary to continue on the path opened by the front-runners of international retail, creating sales outlets in spaces aimed at new shopping experiences and loyalty to the brand and the values it stands for.

The store will have to be a destination where buyers want to go, not just where they need to go, and the customer experience will have a more defined identity, decidedly oriented towards experiential retail, to the point of making it a privileged means for building a sense of community. In international retail, there is certainly no lack of virtuous examples to look at.

Based on this rationale, not only the space inside the store, but also the surrounding and virtual spaces become components of a single showcase and a potential interactive ‘billboard’ for the brand. To these, of course, must be added the continuity of the entire offer cycle in its different parts and forms, even of more recent importance. For example, the outlook rewards interaction with social media, to the extent that Burberry, one of the Western luxury giants, has focused on a new format inspired by social retail in China (WeChat in this case).

Experiential retail

With the sharp increase in online shopping and home deliveries, traditional distribution must adopt new sales models to attract pedestrian traffic into to the store, increase the customer journey’s time, maintain as much as possible the share of spending linked to this specific moment. However, abandoned carts and items returned to the shelf show how quickly consumers can change their mind during the normal purchase process. This is proven by the interaction with the outside through smartphones, digital signage, digital display devices, promotions, events, personalized management of everything that constitute the front-end. Entertainment, not only in the consolidated version of gamification, is an integral part of it, which is in turn part of the wider digital in-store experience.

Entertainment

Whatever the size of the store, most of the existing and potential customers will visit it not only to buy, but also to collect information and news on products of (conscious and not yet conscious) interest, using their senses and the opportunity to explore, socialize and have fun. After all, the goal of those who sell has always been clear: generate the necessary engagement that motivates the purchase.

For brands, entertainment is one of the surest means to enrich and expand in-store experience and become relevant in the customer’s perception. It is not at all surprising thinking about the powerful, playful and emotive drive this has on flash sales, used since ancient times to give customers a sense of impending loss unless they take immediate action.

Today, countless technologies can help stores deliver valuable entertainment experiences to customers. For example, AR and VR can help customers move from knowledge to intuition, from what is to what could be, and beyond. Brands of excellence such as IKEA, Home Depot and Sephora are making extensive use of them and there are those who go even further, proposing them not so much as a new opportunity in the purchasing cycle, but as a prerequisite for the store itself.

Touchpoints

Brands and retailers can, and must, harness the combined strength of physical and digital resources to meet the need for fast transactions, for an emotional connection, or exclusive purchases customized to the fullest extent. Distinctiveness and continuity, perceived at every touchpoint, will be an essential motivator for the customer to find, or continue, the relationship with the brand.

Consumers who discover something unexpected and fun in a store and, more generally, in the ecosystem encompassing it, will share their experience with others through social media and reviews which, in turn, will generate new traffic.

It is therefore necessary to redefine the KPIs in order to adapt both to the progressive evolution of purchasers’ expectations and to the evolution of the offer that follows. Traditional KPIs – such as for example customer flow and stay time – will need to be revised, based on the diversification of the customer journey. Personalization, participation and entertainment are a must for the store in the digital and post-COVID era. Better take note of this and act accordingly.

Turnover, values, customers, experiences and people. Let’s put some order in all this.

Turnover, values, customers, experiences and people. Let’s put some order in all this.

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