Reimagining the In-Store Customer Experience

How brands are transforming brick-and-mortar for bottom-line success

By Sharon M. Goldman

Courtesy of Nike

In May, Macy's announced its acquisition of the New York-based concept shop Story, which focuses on curated, rotating shopping experiences with different themes every few months. In a note to clients, analyst Oliver Chen of Cowen & Co. said that the five-year-old pop-up model "represents the future of retail — curation, editorial storytelling, interactive events and displays ... and will help amplify Macy's Instagrammable moments and help connect with millennial shoppers."

This is just the latest example of a venerable brand looking to respond to the realities of today's volatile, evolving retail landscape, over which e-commerce behemoths like Amazon loom. While the vast majority of retail sales still take place in brick-and-mortar stores, the proverbial ground has drastically shifted under the feet of brands, making it essential for them to find new ways to draw customers into the store and keep them coming back.

"Shoppers still demand to shop at stores with good locations, convenient hours, shorter lines, and good value, but customer expectations about what that experience should feel like are changing," says Peter Dixon, chief creativity officer at the brand and marketing consultancy Prophet. The on-demand economy that provides consumers with the ability to get what they want, when they want it, and where they want it is resetting what "normal" is, he adds.

The in-store experience now has to play to the inherent strengths of brick-and-mortar stores, says Nick Jones, chief growth officer at the brand activation and shopper marketing agency Geometry. "That is, the visual, the tactile, the surprising, the curated, the convenient, the new, the experiential," he notes.

For Ana Andjelic, chief brand officer of the luxury apparel and accessories company Rebecca Minkoff, the brand's job is to give people a reason to go into a store. "We have to constantly innovate the in-store brand experience and use it to assert and convey our unique brand POV," she says. "Think the basketball court in Nike's Soho store in New York, where you can test-drive those sneakers you're considering. Or the joy of trying on a dozen lipsticks at Sephora, and maybe having a beauty expert do your whole look."

Experiences don't just sell products — they are the products, Andjelic emphasizes.

 

The Brand Race to Stand Out

Rebecca Minkoff has long made sure its handbags, totes, sunglasses, and other products are part of the brand experience at its retail locations to attract and retain shoppers. For several years, those locations have offered fitting rooms with "smart mirrors" with adjustable lights and technology that allows customers to ask for more items to try on and even order drinks.

Technology can also help brands stand out on an increasingly crowded retail shelf. Take Australian winemaker Treasury Wine Estates. Geometry and its sister agency J. Walter Thompson created a "Living Wine Labels" augmented reality (AR) app across five wine brands to connect with consumers and help them navigate the increasingly fragmented wine category.

For example, for the 19 Crimes brand of wines, consumers can download an app on their phones and then point their devices at the various labels to learn about old criminals. "We literally brought the brand to life at the shelf with each criminal telling his or her unique story, creating a compelling and entertaining experience," Jones explains.

Innovation isn't limited to luxury goods or CPGs; even large telecommunications brands are working to innovate their brick-and-mortar stores, says John Kiker, SVP and director of client leadership and business development at The Integer Group's Dallas office. The agency helped AT&T improve the customer experience by leveraging content gained through its acquisition of Time Warner, he says. Moreover, The Integer Group has worked with clients to help shoppers overcome choice barriers through the use of artificial intelligence.

"Stores are no longer the end of the customer funnel; they're concepts and environments that help people understand the brand," Kiker says. "They provide guidance through that story and through service that makes customers want to get in their car instead of sitting on the couch."

 

The Changing Look of the Store

Even the traditional layout of brick-and-mortar stores is changing to improve the customer experience. "The center of the store is still a problem as the perimeter has garnered all the innovation, the fun, the experience," Geometry's Jones points out. Smart retailers, however, are adding destination elements to make stores an immersive 360-degree space. "Just look at a pioneer like Eataly — where is the center store? The entire store is at once a destination, an experience, a café/restaurant, and a grocery store," he says.

"We have to constantly innovate the in-store brand experience and use it to assert and convey our unique brand POV."
— Ana Andjelic, chief brand officer at Rebecca Minkoff

In other cases, brands are looking to relocate their products in stores so as to follow new consumer behavior. Frozen food brands, for example, have long been trapped at the very back of the store due to the significant power and related infrastructure demands of industrial freezer banks. But today's convenience-minded consumers often run into stores for quick "micro-visits," which don't include time to explore the far reaches of a huge supermarket. One company, Phononic, recently debuted solid-state commercial freezers that can be placed anywhere in the store without special power considerations, including near the registers so customers can grab cold drinks and pre-prepared dinners on the run.

"Within the next few years, it's likely we'll see a reinvention of the store layout that better conforms to the modern shopper," says Dr. Tony Atti, co-founder and CEO of Phononic. "This will be vital for brands and grocers to combat the convenience and ease of online ordering."

Many CPG brands are also working closely with grocers to make sure that affiliated/affinity products are marketed together, says David Ciancio, global head of grocery at Dunnhumby, a customer data science leader known for its work for leading supermarket chains such as Kroger and brands including Coca-Cola and Procter & Gamble. Modular displays have been developed to support themes such as "What's for dinner?" with products from spices to drinks to proteins marketed in one bundle. Also, in-store merchandising is specifically driving customers to the web and back.

"This connects the in-store experience with the online experience and gives brands an opportunity to connect directly with shoppers while gathering data to better understand their shoppers and create loyalty," Ciancio says.

 

The Future of Brands in the Store

Today's consumers have the power of choice, which is a luxury not available to previous generations, admits Evan Magliocca, brand marketing manager at the marketing agency Baesman Insights and Marketing. "It really boils down to one simple statement for newer generations: 'What's my incentive to go to stores?'" he says. "[Brands] are now focusing on exceptional service, such as Bonobos, an online men's clothing retailer that found value by opening a targeted group of stores that focuses on offering the best service and tailoring possible."

Fast-growing retail startups, says Rebecca Minkoff's Andjelic, are a "canary in a coal mine" when it comes to attracting and retaining their audience. What those new entrants lack in scale, they compensate for in memorable customer experiences. For example, the Goop and Glossier beauty care brands use high-quality lifestyle content to personally engage their loyal customers; Farfetch uses data to curate product offerings within its hundreds of luxury online fashion boutiques; Lululemon, Everlane, and Ministry of Supply apply a test-and-learn process to their product design; and Net-a-Porter and Matches Fashion offer superior VIP and delivery service.

"The role of the store should be examined against this new shopping backdrop," Andjelic says. "Undifferentiated and mediocre retail is getting replaced by brands that actively explore and define the role of their physical stores in culture and in their customers' tastes, interests, and lifestyles. Today, more than ever, it's important for brands to figure out how to build a personal relationship with consumers."

 

 

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comments (1)

Justin Gray

December 3, 2018 12:32pm ET

Without more buyer-habit data, it's hard to not consider this with a lot of skepticism. For instance, most of the industry celebrates Bonobos as a thought-leader in brick and mortar because they offer an "experience" without actually having to keep product on-hand. A consumer walks in, finds what they're looking for in fit and size, then the product is shipped to their home.

While the industry freaks out at the innovation behind this, most of the consumer feedback I've seen shows a lot of dismay over the lack of instant gratification available. If a consumer goes out of their way to physically go to a store, they want to be able to walk out with something. That's the whole point. They don't have to wait on shipping, otherwise they could've just shopped online.

Another example is Home Depot, which offers some tools on the website only. Need it immediately? Too bad. Can't get it in store. That project is going to have to wait 5 days.

So if retailers are considering carrying less inventory so that they can offer "an experience," they really need to consider the actual buyer reasoning for going to a physical location. If it's true that instant gratification plays a large part, they could be alienating their base.