Don’t Just Digitize Your Organization: Transform It

The Stores of Tomorrow: A Look into
Retail’s Brick-and-Mortar Future

Well-known retailers are closing doors and putting up “for sale” signs at an alarming rate. Office Depot sold off stores during the last year, as did Kohl’s, GNC, Macy’s, and Signet Jewelers. The list, which began before the pandemic, is expected to grow. Headlines forecast that the shopping malls of today will eventually disappear.

Before casting a shadow of doom on the entire retail store industry, a detail needs to be added. Though small in numbers, its message is significant. Consider this: Allbirds, a sustainable shoe and activewear brand, began in 2016. By the end of 2021, it had 35 locations.

There are other similar stories of physical growth and expansion. Ben Soleimani started digitally selling high-end rugs and home furnishings in 2019. The retailer now has a three-story, 12,000-square-foot showroom in New York City. Larger companies have jumped on the trend too: Amazon has physical stores, as does furniture retailer Wayfair and, an e-commerce platform in China.

The picture of retail’s brick-and-mortar future is not black and white. While some shops have fallen, others have risen. In this changing landscape, what defines the winners? How can retailers strike a balance between the online and offline world, while integrating mobile trends into the mix?

The path forward begins with an evaluation of the physical store. Retailers must place careful thought into why a structure exists and the purpose it serves. In addition, customer expectations and behaviors need to be recognized and accommodated. Striving for interactions that seamlessly lead customers through online, offline, and mobile channels will ultimately drive success.

The Purpose of a Store

A view of the brick-and-mortar world, before the days of online shopping, provides historical context that is pertinent for a discussion on its future. Customers traditionally went into a physical store for several key reasons. They could access goods and services they were seeking. Consumers had an opportunity to interact with sales associates and ask questions about products. Shoppers might browse, list in hand, and select items that they needed, along with a few extras they spotted in showcases and displays. They would finish their excursion by checking out with a cashier who stood at a register. Shoppers would exit and head home, toting bags filled with their purchases.

Many of these motivating factors to enter a store disappear amid online options. Consumers no longer need to transport themselves to a physical place to find the goods they need. Instead, they can stay inside their homes and browse their phones or devices. If they have a question, they might reach out to an online chat. They’ll read reviews, see what influencers are recommending, and compare prices. They can click through a website, put an item in a digital shopping cart, and carry out a transaction—whenever they want. The package with their purchases will arrive at their doorstep several days later. The online retailer, if it has been interacting with the customer and gathering data, might recommend additional items. These product suggestions will be based on a shopper’s browsing and purchasing history.

Clearly, consumer purchasing patterns have changed. Shoppers no longer need a store to carry out their transactions and get their questions answered. If they are going to come into a store, it will often be for a different reason.

Given this, it is vital to ask the question: What is a store’s purpose? If a retailer has a brick-and-mortar location, it will need to offer customers something that attracts and motivates them. It can differentiate from online experiences by appealing to the senses. For instance, it is not possible to touch or smell at item through a computer screen. That sort of experience can be provided at a physical location. Background music and food samplings are additional examples of how senses can be addressed at a store.

The Value of Customer Experiences

A store might provide an engaging experience that educates or entertains customers as they shop. Workshops, lectures, demonstrations, fashion shows, and counseling sessions are all interactive strategies that could attract consumers. Certain offerings might be free of charge; others, especially those that offer a specific feature or takeaway, could include a fee.

For instance, a grocery location that offers cooking classes on a set day each week might draw in a crowd looking for kitchen tips. These courses could highlight ingredients at the store and make those items easy to reach. If the class features a special meal, a registration fee might be included. In exchange, those in attendance could bring a friend and sample the dish after.

The same concept spans into different segments. A clothing store could ask a fashion designer to give a presentation. The event could be advertised as free to the public. For those interested in a one-on-one session after the presentation, a charge could be added. This provides multiple benefits. Shoppers have the opportunity to gain insight into their wardrobe; those that want personalized advice may be willing to pay for it.

The Benefits of Integration

If online teams and offline teams are not in sync, retailers run key risks. For instance, sales associates who receive a commission for merchandise sold at a store might not be quick to suggest that a shopper make a purchase online. If, however, the associate is compensated for gathering key data about a shopper, that barrier could be broken down. When a shopper shares their email address, the retailer can stay in touch digitally. The consumer might browse through promotions later via their phone. They could make a purchase on their device or come back to the store later to grab the items they want.

In a similar way, store events will need to tie in to overarching goals and other channels to be truly effective. This frequently involves asking for specific details about customers. For example, if a cheese sampling event is offered at a wine retailer, there should be an opportunity for attendees to share their contact information. Everyone at the event could be asked to share their phone number. The data could then be entered into an integrated system. This way, the retailer can continue to communicate with the shopper via text. Promotions can be sent out, and customers might make purchases online after the event, from the comfort of their home.

Collecting data is key to interacting with customers on different channels. When integrated correctly, a seamless experience can be created. Shoppers can effortlessly drift from physical locations to mobile and online channels and find the same atmosphere. They won’t have to re-enter their payment information after it has been saved in one place. After purchasing a product, they can be contacted to see if they’d like to buy the item again.

As retailers navigate a changing landscape, understanding why a store exists can help drive smart decisions. If a store has a specific purpose, and is part of an omnichannel experience, a case could be made to keep its doors open. Going forward, retailers that want to succeed will need to demonstrate the ability to bridge online and offline experiences. When that is done seamlessly, customers will make transactions—and come back for more.

Gerard Szatvanyi

Author: Gerard Szatvanyi

As a founding member and CEO of OSF Digital, Gerry has more than 15 years of experience managing start-ups and medium-size IT businesses and driving them to peak performance. With background in Enterprise Applications, IT Services and Consultancy, Gerry's impressive client and business portfolio sets him in the new breed for global entrepreneurship.