The Store of the Future
Retailers all over the world are asking for the store of the future. That’s great, but what is the store of the future? The only way to find out is to ask customers what the store of the future means to them. Lee Peterson, EVP of Creative Services at WD Partners did just that.
Retail used to be simple. Even with all the complexity brought by supply chain issues, big box retailers, and the myriad changes brought by the evolution from individual store to national chain, things still worked in fundamentally the same way as they did when retail was young. Then, around 1995, people started doing something called eCommerce.
Nobody really thought of it as a threat until when someone had a better idea: put all the stores together. Enter Amazon. They lost $25 million their first year and even more the year after. But they’ve ushered in a new era. Living and shopping are a seamless whole, and both are done together. Commerce starts when you wake up, when you go to the office and continues throughout the whole day. What does this mean?
Customers are always shopping. 180 million customers bought 3.5 billion items on Amazon last year. Amazon takes the profits and puts them into expansion. They aren’t worrying about making money yet. They want to be bigger, bigger, bigger. How do you compete with something like that?
So is Amazon the store of the future?
For many people, Amazon is the first place they go when they want to buy something online. It topped the Harris Interactive poll for companies that Americans trust the most. Nobody loves Amazon, but they do trust them. Does that make them unbeatable for all other retailers? To find out, WD Partners surveyed 38,000 people about the online attributes that US consumers value. Surprisingly, they found that stores are winning—even over Amazon. Respondents wanted two features above all else—instant ownership and a physical evaluation of the product. Retailers should be sure to highlight these benefits to their consumers. People are also fond of exclusive products and bargains. Those can be delivered in store or online, but review information, another desirable feature, is best delivered online.
For most survey participants, emotional benefits trump functional ones. (Millennials are different. They like unlimited options and customer reviews. They’re not especially interested in store experience, store design, and store associates.)
The retailers who will compete best with Amazon invest in their people. They hire people who like working with other people. Nordstrom, Apple, Whole Foods, Starbucks, and Sephora do this well. They give great personal service, and they create customers for life. The emotional connectivity that a store associate brings can be the primary the differentiator against an online competitor.
Retailers should be something more in the minds of shoppers. The store of the future needs to be social, open, and captivating. The closer you are to an Amazon warehouse, the more likely you are to get crushed by them.