Retailers are putting more emphasis on the customer’s in-store experiences as advertising media and stores begin to swap traditional roles.
Sport Chek’s newest downtown Vancouver store already has a gait analysis machine to help runners select the best footwear for their biomechanics. Best Buy’s local Google shop lets customers “fly over” the planet with Portal, a giant immersive Google Earth display.
And in New York City, Pirch appliance’s concept store lets visitors test shower heads by hopping in a shower or test a stovetop by cooking on it.
“Traditionally, stores were charged with merchandising and displaying product, providing consumers with product information, and then facilitating a purchase,” retail consultant Doug Stephens of Retail Prophet said in an interview.
Meanwhile, the purpose of an advertisement was to tell a brand story, “get me excited about the product, and then ultimately to push me (to go buy it), ” said Stephens. “Now that’s the role of the store.”
Stores have now become critical places for consumers to learn about the brand story and have physical interactions with the brand, Stephens said.
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So Nike’s new 55,000-square-foot New York City concept store is an immersive experience where visitors can run, jump and shoot hoops.
“The vast majority of what Nike sells, it sells online,” Stephens said. “The store is really just an interactive piece of media.” The store also bridges digital and physical, remembering which shoes a customer has tried on before, for example.
“Our customer can buy our brand anywhere. We need to set ourselves apart by delivering an experience they can only have with us here,” Stephens said.
But that’s easier said than done.
“Everybody’s talking about it — very few are doing it. It begins with a leap of faith,” Stephens said. “Right now the retail industry is guided primarily by one metric and one metric alone, and that’s sales per square foot of retail space. As long as you’re being restricted by that metric, you’re less likely to create experience in the store and you’re more likely to fill every nook and cranny with product.”
“We have to believe that if people come to our stores and they have a wonderful experience, ultimately that has to pay off in sales,” Stephens said.
Often it’s the smaller retailers who are doing this best, Stephens said, naming Bandier, a fitness and yoga-wear store that has dedicated 3,000 square feet of New York retail space for celebrity instructors to conduct classes and create community.
“As a consequence, she does tremendous business, mostly online,” Stephens said. “The store is a catalyst for the sales across channels.”
But beware of good talk and mediocre execution. Confusing good customer service with good customer experiences is a key mistake.
“We’re very much in the early stages of this transition. What we see right now is a tremendous amount of fallout,” Stephens said. Conventional retailers are downsizing or going bankrupt because they aren’t giving consumers good enough reasons to go to a store.
Amazon.ca’s market share is more than the combined Canadian online sales of their six nearest conventional retail competitors — Wal-Mart, Home Depot, Costco, Best Buy, Lowe’s and HBC, according to BMO research.
“This is not about capital. It’s about creativity,” Stephens said. Vancouver’s “Kit and Ace have got plenty of capital behind them … and it’s not working out largely because it’s an absolutely mortifyingly boring experience in their stores.”
Indeed, Stephens predicts a resurgence in small retail.
Beadworks on Granville Island just might be right on top of the customer experience trend.
Bring in a broken heirloom necklace, and Natasha Bernier and Linnea Stamp’s staff will not only sell replacement parts but may pull out tools and make the repairs right then and there at the cash register. The 1,000-square-foot store offers four classes a week but will also schedule classes on request. Store windows exclusively showcase employee-made jewelry.
“If you purchase your beads in the store, you can sit down and make it,” Bernier said. “We will listen to you with your idea, help you select our beads, sit you down at the table and get you started.” She’ll even let people use store tools at tables outside the store if it’s busy.
Online competition has affected sales, but Bernier’s customers have told her quality and colour are difficult to discern online. Bernier plans to bring in more locally crafted beads to strengthen ties with the artisan community, bring in big-name guest instructors and offer classes targeted for tourists.
“The merchant of the future is an artist in experiential design,” Stephens said. “Saying we give good service is simply not good enough any more.”
Think of a store as a theatrical production, Stephens said. From staging to script, music and lighting, nothing is left to chance.
“Anything short of that is an accident. Stakes are so high now, retailers can’t accidentally run their business.”
Vancouver’s The Cross Decor and Design, a lifestyle and home accessories store, is notably good at this kind of meticulous detail. Owner Stephanie Vogler ensures her 8,300-square-foot store is an “unexpected, whimsical and inspiring” feast of sights, smells and sounds.
Marcello Leone’s Vancouver RYU fitness, training and performance wear store has three distinct spaces: an 800-square-foot area which trainers can use at no charge to work with their clients; a 3,000-square-foot retail space with modular fixtures that allow for hosting after-hours classes and meetings; and an 800-square-foot outdoor courtyard suitable for complimentary fitness classes. The gym takes up 15 per cent of the store’s total square footage.
Internationally, a number of retailers worth watching include Ritter Sport, Miele, Volkswagen and Nivea who have opened creative, experiential concept stores, said marketing professor Judy Zaichkowsky of the Beedie School of Business at Simon Fraser University.
Ritter Sport’s concept store in Berlin allows shoppers to design their own chocolate bar with additions from red peppercorns to strawberries, offers ChocoWorkshops where children design their own chocolate bars and packaging, a multi-sensory walk-through chocolate exhibit and a restaurant/lounge.
Miele stores, including Vancouver’s, may offer “one-on-one” chef consultations in which a customer, friends and family, can book a hands-on, four-course cooking lesson and meal.
Volkswagen is turning its auto showrooms from dealerships to retail stores with soft seating and café-like areas. It encourages customers to browse as they would in a retail store. The showrooms also use iPads and large screens to help customers build their individual car specifications.
Meanwhile, Las Vegas-based ShopWithMe’s mobile, mass-produced pop-up “smart” stores can be quickly activated and deactivated as completely different stores within days. Customers engage with interactive displays and can make requests and purchases from inside changing rooms.
Stephens predicts Vancouver retail will see a resurgence in small retail; continued double-digit growth in ecommerce of 12 tp 15 per cent a year; continued downsizing of large stores even though Stephens believes stores would be better off repurposing; and growing use of mobile devices.
Half of all retail transactions are influenced by a mobile device ,whether it’s looking up an address or buying something directly online.
Source: Vancouver Sun