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A customer’s experience with the physical retail store is changing. It might not be extinct anytime soon, but the exponential rise of ecommerce has certainly quickened its evolution. It’s state of transformation, however, is now a topic of debate and concern. Traditional brick and mortar storeowners and marketers alike are all wondering how customer engagement is adjusting to the digital revolution.
This was the central theme from Doug Stephens, founder of Retail Prophet, during his Keynote Retail Address at the Apex All Payments Expo in Las Vegas last week.
During his presentation titled, The Future of Retail, from Bricks to Clicks, Stephens laid out his thoughts about the rapidly changing face of established retail outlets, his theories about where they were headed, and how a higher level of customer engagement may still hold the keys to success.
Digital online shopping currently accounts for approximately 8% to 10% of total spending. To some, these numbers may not seem alarming, however, Stephens points out that the overall level of consistent growth is actually astounding. In 1994, that number was zero. Growth since then has seen an average of a 19% year-on-year increase, which projects a 30% total for online spending by 2025. It is also quite likely that that number will be even higher once 2025 actually arrives.
Where will it level out?
“I don’t think we’re even close.” Stephens said. “I think that if ecommerce were a baseball game, we’d be in the middle of the 1st inning right now. I think there is a new revolution in ecommerce coming.”
Stephens listed a range of possibilities evolutionary paths from virtual reality shopping to immersive digital augmentation where shoppers could literally “walk” among the boutiques and Paris and London in real time.
If this all seems a little too far-fetched, Stephens cites the realities of 3D printing that, just a few years ago, seemed bound to the pages of the most fantastic science fiction novels.
Stephens understand why many are reluctant to even consider such a future.
“It’s so jarring because we are running headlong into the end of an era of retailing, and it was a long era,” he said. “It was 60 years of really good solid, almost uninterrupted growth. We’ve been riding that wave for a long time, and now it’s the end.”
Advertising used to follow a top-down approach and that served as a reliable linear model. But as consumers are now being assaulted with 34 daily gigabytes of data that all scream about a near infinite amount of product choices, this model is broken.
What’s more, beyond this digital deluge of information, our mobile first society has also profoundly shifted power traditional power structures.
According to Stephens, “what this has done - this infinite level of selection and the supercomputers that [consumers] carry at all times - is put the consumer in control, now and forever, for the first time in history.”
So how can retail stores evolve to accommodate new modes of customer engagement?
Stephens sees stores shifting into a new and powerful form of media, as they will remain only a place where a consumer engagement means getting a visceral, face-to-face, emotional connection to a brand.
But this will require retailers to shift their thinking on the purpose of a store.
Since mobile users can literally purchase products anywhere, stores must shift from being distributors of products to become distributors of customer experiences. Retail clerks need to evolve into brand ambassadors who bring enchanting personalities to inspire, excite, and engage customers. In this way, the experience of being in a store is going to be about creating a brand disciple for life.
“It going to be about really creating a galvanizing relationship with the consumer so that when they leave they are comfortable buying from your brand anywhere,” said Stephens. “They’ll buy from their smart watch. They’ll buy from their phone. It doesn’t really matter because you have built that incredible experiential reference in their mind.”
This is not the end of retail, but it is the start of something new.
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