The local merchant has changed over the years of society’s evolution. At one time, people would barter with animals or other goods that they could trade as their primary means of currency. But as society continued to evolve and technology advanced, such a system had to change. From the first cash register invented in 1883, to the rise of department stores in the early 1900s. From the emergence of malls in 1930, to big box stores in the 1960s, the retail industry has always been changing. Retail moves based on the economy and societal innovation, as the industry strives to maintain the needs of the consumer. It is that very fundamental goal that is at the forefront of the most current retail evolution.
It’s no wonder so many brick-and-mortar stores are closing down their locations. They haven’t yet changed with the times. Only in recent years have retailers attempted to move forward with their e-commerce agendas. In trying to compete with Amazon, big box retailers such as Walmart and Target, have changed their strategies to incorporate a better online experience. But it’s not simply website changes that must be addressed. The very stores themselves need to be overhauled to combine digital and physical realities that foster the continued use of shopping as entertainment.
Retailers are looking to create omnichannel experiences in order to focus on personalization. According to reports, 71% of shoppers price check online while in store. With the regular use of smartphones, future stores could incorporate the use of mobile applications. But they also have to generate actual foot traffic. It’s becoming less about walking out with a purchase, and more about giving people an experience.
Furthermore, while technology has its advantages, it cannot replace real people. Despite the prevalence of online shopping, physical retail is still important across all generations. Many stores are combating the digital front by focusing on what makes them unique. Target, for instance, is remodeling its stores and putting money toward designing products consumers cannot buy elsewhere. According to them, and several other businesses such as Warby Parker, the use of technology is simply a gimmick. The real strength of brick-and-mortar lies in its ability to offer real human interaction in the form of exceptional customer service.
Competing with Walmart & Amazon
Most retailers seem to be falling behind e-commerce giant, Amazon, while Walmart makes strides of its own to keep up. The fact of the matter is that Amazon tends to have the lowest prices and the most convenient purchasing options, at home delivery.
Considering that 85% of shopping still occurs in physical locations, it’s safe to say that brick-and-mortar continues to dominate the market.
For that to remain the case in the future, retailers must embrace new technology, and they are.
Augmented reality is bridging the gap between online and offline. Brands are using AR technology to give consumers the chance to ‘test’ products before buying. From Ikea to Converse, retailers are using mobile phones to give consumers the ability to see what an item might look like in their house or on their feet in customizable options. This is all without even having to step into a store, but increases the chances of buying.
At one point, retailers thought showrooms would be a detriment to their business. People would use physical stores to test products before buying them online at a cheaper price. In order to combat that, they began price matching or lowering their prices entirely. Now, they are seeing it as another step in the omnichannel shopping experience.
Stores, such as JCPenney, are encouraging shoppers to buy online while in store. The intended effect being that they buy from the retailer’s website. For instance, if a shopper can’t find something they like in the color or style that they want, they can instead buy it online after seeing it in person. This also works perfectly with AR technology, as the whole idea of showrooms is an integration of the digital world and real world. To hold it all together though, of course, it’s a necessity to have great customer service representatives to answer questions and assist with purchases.
Larger retailers are trying to create their online business, but e-commerce businesses are trying to do the opposite. Amazon opened up a pop-up shop in London that showcased its products in a way that did not encourage any actual selling of merchandise. The idea was to focus on the experience. There are plenty of online businesses doing the exact same thing, such as Warby Parker which made a road trip across the U.S. to bring their glasses to their consumers. Online businesses know their customers due to gathering data from shopping algorithms. They in turn use that information to create these tailored experiences. Pop-up shops cost less than owning a permanent brick-and-mortar store, and drive traffic due to meeting consumer demands for actual interaction with products.
This doesn’t mean it’s the end of physical stores.
According to reports, 17% of all sales will be made online.
That still doesn’t make a majority of sales. That means retail stores will continue to be relevant, even as technology advances. There simply is no real alternative to seeing products in-person.
Retail is definitely making a change. The future will see a rise in the omnichannel experience. Digital and physical realities will merge, through the use of augmented reality, as well as increased smartphone use. Instead of buying in store and carrying items out with them, shoppers will simply sample products to then be delivered straight home. All this will be facilitated by knowledgeable customer service representatives who will be the driving force of the shopping experience. The future of retail is a marriage of technology and the traditional, making the digital and physical worlds more connected than ever.