The Changing Role of the Retail Store

by Blake Morgan

customer shoppingIt’s no secret that traditional retail companies are battling extreme competition from online retailers. Customers go into a brick-and-mortar store and immediately pull out their phones to compare products and pricing. To fight this trend, such stores can provide an experience that people can’t get online. Ideally, the store experience elegantly supplements the offline platform, and vice versa. If you are a traditional retailer and haven’t started this reciprocal model, it’s going to take a lot of effort and a big restructuring to put it in place, but the investment will be worth it.

Disruption is about embracing the new and the old. Let’s look at Sephora® as an example. In the beauty category, it’s difficult to get a sense of a product unless you can try it. At Sephora®, you can usually find a beauty advisor who will recommend colors that match your skin tone and help you sample them. Every time I walk into Sephora®, a sales associate asks me right away if I need help. Often, I take the associate up on the offer, and end up walking out of the store with products I didn’t know I needed. It’s a mix of education and special treatment — after all, who doesn’t want her makeup done? 

Sephora® holds beauty workshops at certain locations, and there customers can get a lesson from an instructor. They can watch a tutorial on how to do their hair, nails, and makeup. There’s a touchscreen kiosk that allows customers to find the right concealer, foundation, and lipstick for their skin tone. Additionally, on your computer desktop, phone, or tablet, you can test out Visual Artist, an augmented reality app that captures your face and, in real time, allows you to try on various shades of lipstick and eye shadow. Sephora® knows its customers want to play with different looks, get educated about beauty products, and learn new tricks, and both its online and offline components meet these customer needs.

Another example of the changing role of the retail store comes from Microsoft®. I recently interviewed James Staten, chief strategist for Microsoft Cloud®. Brick-and-mortar stores can compete with online retailers by leveraging emerging technologies to provide the most elegant, tailored, and luxurious experience possible. Imagine this: a customer walks into a store, and video cameras identify the customer. A CRM tells the employee working in the retail store who that customer is, his purchase history, and any additional information that would help the frontline worker suggest items tailored to what that customer might be interested in. Today, brands have access to facial recognition technology that would greatly improve the retailer’s ability to provide a tailored experience. 

Digital start-ups have clearly been inspired by the brick and mortar stores with which they are competing. For example, Stitch Fix® offers personal styling. Its stylists send you items chosen specifically for your body type and style, and you purchase what you want from the box. Companies can only differentiate today by offering products and experiences that customers can’t get anywhere else. Stitch Fix® offers yet another example of a company that thrives on customers seeking more tailored experiences. Retail — as we knew it — is no longer enough for the modern customer. Retailers need to create something special. 

Other examples of companies that are expanding their store experiences are yoga apparel company Lululemon®, which sponsors running clubs that let runners meet to enjoy a workout together, and Michaels®, the chain arts and crafts supply store, where you can choose from online or offline classes and learn to knit, crochet, paint, draw, make jewelry, craft with paper, decorate cakes, and more. You can also throw a themed birthday party at Michaels® for your kids. These are not the major draws of these companies, however they build a community that ties the offline with the online. A company that embraces disruption marries offline and online experiences.