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How Physical Retail Is Transforming in an Increasingly Digitized World

How Physical Retail Is Transforming in an Increasingly Digitized World

In part two of an op-ed Q&A, retail strategist Melissa Gonzalez provides answers to top questions about the evolution of the retail store as the industry continues to contend with changing consumer behaviors and new challenges during COVID-19. Keywords: digital, fluid, flexible!

There are many uncertainties around where consumer adoption of contactless retail will normalize, but one thing that we know for sure is that physical retail will need to transform to better suit a more digitalized world. Environments will need to marry value and convenience with experiential design and the in-store journey will be about package efficiency as much as it is about discovery and adventure. 

While we learn and adjust to accommodate evolving behaviors and serve consumers that are finding their own new norms, we know that cross-channel fluidity will need to be supported. The value of BOPIS, in-store returns and contactless payments have been proven as we witness leaders like Walmart, Target, Home Depot and others benefiting from significant growth due to their ability to adapt and we see the humanization of technological experience aid in-store design.

Q: Do you think stores will be embracing smaller footprints as there will be a shift in inventory needs?

A: Yes I do. Overall you are seeing a re-evaluation of footprint, but it needs to be with the lens of “what purpose is this location serving for my customers?” Brands and retailers are taking a holistic approach to utilizing all channels and in some markets stores are best served as curated experiences. They can be utilized to spotlight new product launches, to unveil exclusive collaborations and capsule collections. Other times they can serve as an intentional point of fulfillment. Customers value experiences with a clear point of view and their time is valuable. Not every shopping experience needs to be a treasure hunt, so understanding customer needs and expectations in each market are key in determining the right footprint. 

A: What role can the pop-up play in this transitional time? As part of fluid online and offline experiences?

With so much uncertainty around where customer’s expectations will normalize, we need to create adaptive environments. Pop-ups are a lower risk way to test how to “show up” and best serve customers at various points in time. We know contactless payments have seen significant adoption since store closures but we still don’t know how it will normalize as stores fully open again, for example.  Pop-ups serve as a live focus group for testing and learning, and there is a lot more consumer acceptance for iteration in a pop-up retail store. Additionally, as brands and retailers re-evaluate markets, they are a vehicle to have a physical presence at key times during the year in markets where a 12 months-a-year presence doesn’t have justified economics. 

Q: Curation is absolutely critical, but every ecommerce destination wants an “infinite aisle” assortment strategy. How do you reconcile curation with scale?

All channels need to have a unified approach, and they should all complement each other. In-store curation should be agile and be able to flex from market to market, while online integration supplements an endless aisle experience. With the right modular design, stores can morph as needed throughout the year. Store associates and clear signage can help streamline and maintain a distinct and cohesive experience for customers in-store. 

Q: In what ways will consumers want to re-embrace touch? Will there be a backlash to these touchless innovations post-pandemic?

A: There are the tactile elements of physical retail, but when we think of the in-store experience touch in isolation it isn’t the only sensation we value. Ultimately when making determinations around what can be facilitated by technology we need to remain customer centric in mindset and be purposeful in our decisions. If we streamline technology to facilitate the transactional elements and to be a conduit to education, we can supplement it with sensorial elements in non tactile ways, such as layering on sound, lighting and scent.

Q: It’s interesting that much of the discussion is around the retail space being assessed in terms of its transactional role or facilitating returns. Will the role of retail go beyond this?

The role of the store continues to evolve. It needs to be a destination that satisfies the needs of a customer who has become more channel agnostic and expects fluidity regardless of the touchpoint. We will likely land on a blend, where even if the store is serving as a point of fulfillment while still being a brand moment – albeit from a service standpoint or a point of discovery and sales. Ultimately will need stores to adapt to a more technologically advanced consumer base and be able to seamlessly be able to serve numerous customer journeys.

A: What are the most important moments and key points around which to create flexible, agile retail experiences?

The analysis we are doing, and scenarios we are mapping out, are around both the customer journey and the package journey. Our analysis encompasses the online and offline journey and takes into account shoppers behaviors as those lines continue to blur and overlap. When we think about experience per square foot, some of it needs to accommodate “quick-serve” metrics of order fulfillment and returns, and an environment that optimizes the package from the moment it arrives in-store to the movement it leaves. While some of it needs to be a place that supports in-store discovery and full service support, such as appointment based shopping, meeting with beauty advisors, stylists or maybe a tailor, the biggest acceleration in 2020 is adaptability for all scenarios.

Q: Could you talk a little more about the staff journey? Many retailers are facing having to retrain and hire new workers to adapt to the swift changes even as they are also experiencing contraction.

Cross training store staff is now more important than ever. At the heart of it, its about understanding the product and service you provide, understanding customer pain points and frequently asked questions, and being able to have a service first mentality and approach. They  also need to be fluent with the in-store technologies that are being implemented so that the customer experience can be fluid. They need to not only understand how the tech works, but the purpose it’s serving, equipping them with a comprehensive perspective on the value and how it benefits the customer experience. 

A: In categories like furniture and home improvement in particular, how do you recreate the consultative selling with tech and how do you still keep it human?

These are two categories of strength right now, as work from home continues. There is a lot of education from a DIY perspective, especially when it comes to home improvement and contextualized guidance when it comes to home decor and styling, so keep those aspects in mind when pivoting and adjusting is key. Keeping it human will be codependent on leaning into those service aspects. With home decor and furniture, a brand can still use their physical store as a key backdrop for inspiration and utilize live streaming or appointment based shopping experience to continue to enhance customer experience. 

Q: With holidays around the corner, do you think retailers will be able to shift in time to deliver on a more flexible framework?

For 2020, the strategy is being about adaptive more so than perfect. Those that prioritize customer safety, fulfillment logistics and creative ways to sprinkle in surprise and delight can be successful. There are numerous low tech ways to facilitate contactless, and many are already doing so but there will absolutely need to be a cross channel approach as well in order to meet customer’s needs. This planning needs to start now, if it hasn’t already. 

These questions were posed by live viewers in attendance of Melissa’s webinar presentation, “The New Consumer Behaviors That Will Reshape The Physical Store,” during the virtual Future Of Retail festival—check out the full video of the presentation here! And browse more talks from retail experts like Melissa here