By Jake Knowles, Retail Consultant, BJSS
While it’s true that online sales are growing faster than bricks and mortar, it has become more apparent that much of ecommerce is unprofitable and that truly scaling pure-play is nigh on impossible.
In an ironic twist, many digitally-native brands which had previously raised hundreds of millions on the premise that stores were unnecessary, are now opening stores. And they’ve realised that much of their growth will come from these physical locations too.
New York has many examples of these: Amazon and Warby Parker to name two. We were desperate to take a look. So, we headed out to see which stores were worth the hype and which, quite frankly, weren’t.
What did we look for?
We believe that tech is a co-creator and co-enabler of value. We hate it when tech is simply thrown into a store with little thought about how it enhances the wider customer experience strategy or adds to the bottom line.
Clearly, there is no one stop shop strategy to achieve this. So, we developed our assessment. We focused on three areas – brand, digital and experience – that we felt allowed us to rate all elements of a store regardless of its industry segment, size or tech usage.
We then categorised the stores according to maturity. A score of one represents a laggard, while four represents an industry leader. Our analysis was open and honest. Where we didn’t have a good experience, we called it out, ensuring that substantial evidence backed-up our points.
The Good, Bad and Underwhelming
Across the 30 stores we reviewed, there was an eclectic mix of eye-catching formats, the latest in tech innovation and a few attempts to deliver true customisation. While they all aimed to provide a memorable and stand-out customer experience, they didn’t all achieve this.
Interestingly – and this is an area which is frequently forgotten and neglected – those stores which scored well in the report all had one thing in common: customer service. There is never a substitute for highly knowledgeable, personable and genuinely enthusiastic store associates. They epitomise the brand in a way that design or technology simply can’t.
A further, key insight is that in the era of digital disruption, failure to be remarkable eventually leads to total failure. Many brands have learned this lesson. Good enough is no longer enough. We found that those brands which truly excelled at doing one thing well and executing it brilliantly all scored well. They understood their core vision and principles, designing their stores and services to complement and enhance this.
B8ta (pictured above) was my personal favourite. In addition to the best customer service we received, B8ta provides a digitally-intelligent offering which drives benefits for customers, suppliers and manufacturers. Instead of looking at a simple price label, customers interact and engage through small tablets located next to each product. These tablets send real-time product browsing and sale activity to suppliers, who can immediately update their messaging or pricing points, and push live updates to the in-store screens.
But tech isn’t always a must. While there was no tech on show at Delvaux, its superbly designed store made customers feel at ease and relaxed, exuding luxury at every touchpoint. Delvaux proved that tech investments aren’t always fundamental to in-store experiences, and that clever store design can epitomise a brand and inspire customers.
Disappointingly, despite the hype, we found Nordstrom Men to be slightly confusing. Yes, they use tech, and yes, the tech adds value, but the store itself was poorly designed, didn’t integrate well. This left us feeling completely detached from the experience. This is a clear example of how retailers can quickly lose themselves whilst trying to innovative.
Levi’s demonstrated that tech can sometimes be gimmicky rather than value-adding. While we were initially excited at the customisation station, the tailoring tablets offered a basic journey before encouraging us to ‘contact a tailor’. This clunky digital interaction requires early intervention from a store associate and simply doesn’t provide an inspirational or exciting experience for the customer.
Big Smoke vs Big Apple
Arguably, New York is ahead of London in terms of in-store technology. It enjoys a much greater ‘test and learn’ reputation where experimentation is encouraged and daring to be different is valued.
To us, that was highly commendable and something we’d love to see more of in the UK when thinking of our wounded department stores.
Why not do as Macy’s has by making square feet available to pop-ups? B8ta is an amazing example of a concept that we think would thrive in the London market, and ease the pressure of the cavernous space in struggling department stores. It’s a win-win.
Or, why don’t retailers mirror Saks which took the plunge and revolutionised a once tired beauty format into a true shopping destination.
New York was bold. Is London?
This is an interesting question, so we’re putting the finishing touches on our London store report. Planned for release in April, there will be some names you’ll recognise and others you won’t, providing an honest assessment and further insight into what is happening our side of the pond.
What really stands out for us is that the fundamentals of retail are just as important as innovation. Physical retail success is still driven by effective merchandising, strong availability, and best-in-class customer service. While technology can enhance and enable these fundamentals, it isn’t really the silver bullet many believe it is.
Our question to any retailer would be this: can you describe the vision and offering of your store in a short sentence? If the answer is no then how customers be expected to understand and enjoy its purpose? Remain focused, effective and simple, and customers will want to come back for more.
This guest article was written by Jake Knowles, Retail Consultant at BJSS