Building the store of the future

By Rachelle Headland, Managing Director, Saatchi & Saatchi X

I am extremely excited, and privileged. I am hosting a discussion on behalf of the MAA (Marketing Agencies Association) on Wednesday 26^th November with some of the most famous and the most pioneering retailers in the UK including Metrobank, Disney, Selfridges, EE, Tesco, Argos, Google, notonthehighstreet.com, Depop and Intel.

The theme is transformation, the objective is to get to the heart of the challenges and opportunities facing the retail industry in our immediate future, so we can inspire all those connected to retail, retailing and retailers, to evolve their business models and marketing strategies faster, keeping our entrepreneurial and creative retail industry at the forefront of the world. What follows this discussion in 2015 will be the launch of the MAA tRetail programme of best in class case studies, events, training and inspiration.

There is much coverage of the changing retail landscape, from the (not in my opinion) floundering high street to the unstoppable titan of the ecommerce world; Amazon, which apparently sells more than its next 12 competitors combined (but still only 13% of what Walmart clears), to the increasing threat of the discount grocery retailers Aldi and Lidl, who will change the face of grocery retailing in the UK by revisiting the traditional models of choice, experience and value, and by not getting too wound up about multichannel to begin with.

Technology has changed the way we shop dramatically, but it certainly isn’t the only way to innovate or to win with shoppers. In fact Retail consultancy WD Partners published a report recently showing how traditional stores can still appeal to modern shoppers by updating their bricks and mortar models rather than trying to chase Amazon online.

“The key to finding the edge isn’t copying what Amazon does,” said WD Partners’ Lee Peterson. “It’s doing what Amazon can’t.”

WD Partners surveyed 1,700 consumers across the demographic spectrum, screening respondents on their desires and behaviours both online and in-store. Peterson was surprised to discover that shoppers still value immediacy above all else, with 79% listing “instant ownership” as the most appealing attribute of any retailer, online or off. “In other words, Amazon still can’t compete with, ‘I can just get in my car and go get it now,’” said Peterson. “Stores are still winning.”

After the ability to buy a product immediately, “touch and feel”, or sensory perceptions of a store, ranked as the second most appealing attribute (75%), with “exclusive products and bargains” coming in third (65%).

However, when the data was sliced across age groups, it became apparent that online retailers have a huge edge with Millennials, who ranked “unlimited options” and “customer reviews” as their top two shopping ideals. “Instant ownership” came third.

Peterson explained that Millennials have grown up in the era of the impersonal big box store, with suburbs and strip malls dominated by Toys R Us, Best Buy and Target rather than Main Street shops or quirky one-offs.

“In the study, Baby Boomers and Gen-Xers were kind of rooting for the stores,” said Peterson. “It’s nostalgic. It’s emotional. Whereas shopping online is clinical.”

So despite the fact that stores are currently still winning, they will be forced to adapt in the near future.

With Millennials wanting “unlimited options” at their disposal, stores have an imperative to integrate the digital with the physical. “This means creating the illusion of an endless aisle” said Peterson. To me this is the true power of technology, the ability to recreate space and present products and services in new and inspiring ways.

So choice, but at the touch of a button, and supported with informed virtual or real sales assistants, curated recommendations and easy comparisons. It comes back to identifying the shopper need, not the latest shiny bit of kit for the sake of innovation.

Also, it’s not coincidence that the best retailers always have the best service and the best trained people, think Apple, John Lewis, Selfridges and Sephora, who all seem to hire people that like helping people and are devoted ambassadors of the brand and products.

So we all agree store environments will change, but they’ll embrace the best of both worlds, ensuring the experience is seamless yes, but is also an experience that can be emotionally benchmarked. I suspect click and collect lounges, in-store cafes, personal shopping assistants and other multi-sensory experiences will only increase as more searching and purchasing moves online.

And what does multichannel actually mean, shopping across every device, socially curated marketplaces, tailoring product/service format to channel or online shopping behaviour shaping your store experience? Whatever it means there’s clearly no one-size-fits-all and it always comes back to understanding your audience and the relevance of your brand to that audience in the current day context.

I’m keen to hear if my panel of super experts agree, and also where they believe adding value for shoppers truly lies. Now I’ll be the first to admit that creative agency idealism and retail reality can sometimes feel a country apart, but there was also that wonderful quote from Darrell Rigby of Bain Consulting; “we’ve effectively bored people into shopping online; today’s senior execs don’t know how to fix it” which gets to the heart of the challenge from the creative industries and retail entrepreneurs and visionaries; emotion sells, that is the reality, price, quality, convenience and service are the market entry requirements.

There’s a new value equation, and the culture of an organisation can be the difference between life and death, in an alarmingly short space of time. It’s not evolution, it is revolution and that’s a lot more exciting.