How major retailers are reinventing the shopping experience
According to an eMarketer report, the U.S. eCommerce market has been growing by double-digit rates for the last 10 years, comprising more than 10 percent of total U.S. retail spending. While this may seem like a small piece of the total retail pie, the report predicts that eCommerce will continue to drive a disproportionately high percentage of retail growth.
Brick-and-mortar retailers are taking notice. According to a recent Gartner report, many have invested into reinventing the shopping experience through “curated merchandise offerings, an entertaining atmosphere and concierge-like service” in an effort to keep pace.
Here is a quick snapshot of some of the ways major retailers are reimagining the brick-and-mortar shopping experience.
Curated merchandise offerings
The Nike Live store concept is a great example of how brands are leveraging the physical space to experiment with technology and offer curated merchandise to their consumers. The store located on Melrose Avenue in West Hollywood uses digital commerce data of the surrounding area to gather customer preferences and determine what products to stock. Nike’s VP of Direct Stores Cathy Spark told the Los Angeles Times, “This store is meant to take everything we know about our customers digitally and, with the new Nike app, use that to elevate their shopping experience.” For example, if a color like yellow is trending with local customers, the store will reflect the trend by stocking yellow footwear and apparel. The automated process allows the store to change up to a quarter of its footwear inventory bi-weekly.
A number of retailers have invested in creating “experiential” stores. Usually flagship locations, these stores offer an entertaining atmosphere that serves customers in unique ways whether they are learning something new or just having fun. For example, Adidas location on Fifth Avenue in New York City includes a miniature track where customers can take a run, have their stride analyzed, cool off on bleachers or enjoy a fresh drink from the store’s juice press.
Other examples include Casper, a mattress retailer with plans to open multiple physical locations where customers can try out mattresses in a bedroom-like atmosphere. The stores will feature small house setups encouraging customers to close the “door” (curtain) and take a nap to truly get a feel for the product.
According to Retail Dive, retailers like Nordstrom are investing in smaller, merchandise-free store concepts focused on providing concierge-like service to their customers. Nordstrom Local, a store pilot recently launched in Manhattan is not focused on selling merchandise. Rather, the store provides services such as tailoring, styling, shoe repair, dry cleaning, charity drop-offs and the convenience to return products purchased online. The idea is driven by the desire to build relationships and affinity with customers.
Seeing how large brick-and-mortar retailers are reacting to continued growth of eCommerce offers an interesting insight into strategic thinking at the corporate level that’s both creative and innovative.
Students pursuing an MBA at William Woods University take courses such as BUS 552 – Business Strategies focused on learning how to guide organizational actions and advance innovation. By examining near and long-term strategic planning concepts, students will have an opportunity to engage in strategic decision-making processes and create implementation plans.