of the Retail Store
The Future of the Retail Store
A RETAIL DIVE PLAYBOOK
T
he retail ecosystem isn’t what it
downswing, and online options are on the upswing. In
used to be. Retailers from a decade
fact, a recent Wall Street Journal article, citing research
ago are in sharp contrast to what
from Green Street Advisors, notes that retailers would
you see today: There were more
need to close hundreds of stores if they want to see the
stores, regular foot traffic and a
same levels of robust prosperity that they saw in 2006.2
vast amount of square footage per
customer. Today’s retail landscape is still made up of
Despite the increase in online shopping, some retailers
brick-and-mortar stores — though fewer of them — but
are increasing their brick-and-mortar presence3 while
now includes myriad options that allow consumers to
others are taking a hard look at where they can improve
wield their purchasing power without ever setting foot
on the in-store experience, or reinvent themselves as a
in a store.
distribution hub for consumers who want to combine their online and in-store experience.
According to a 2015 U.S. online shopping report from Mintel, nearly 70 percent of adult consumers shop
“ Stores are now serving multiple purposes, and new
1
online at least monthly. About 33 percent shop
purposes are constantly being imagined,” says Adheer
online weekly. These numbers can be expected to
Bahulkar, partner in the retail practice of A.T. Kearney,
climb, as retailers make it increasingly convenient for
a global strategy and management consultancy.
consumers to do the bulk of their shopping online,
“ Stores are points of sale, distribution centers, they
without ever setting foot in a store.
are showrooms, they are event or brand experience
Nearly 70 percent of adult consumers shop online at least monthly.1 About 33 percent shop online weekly.
centers, and they are entertainment hubs. Each of these With the increase in online shopping, are brick-and-
purposes can entice a different set of customers to the
mortar stores doomed to extinction?
stores.”
Not likely, although the rapid changes in retail technology have redefined how retailers need to strategize their success for the future, where physical stores are on the
RetailDive.com
BRAND 2 STUDI
The Retail Store as an Experience Though a large portion of consumers is taking to apps and websites to shop, shoppers still want to see and touch the merchandise they’re considering. That said, savvy retailers are upping the ante on in-store offerings to entice and increase foot traffic. Stepping foot inside a store today isn’t just about browsing the merchandise, it’s a full-on sensory experience. “ Retailers like Rebecca Minkoff are using local events, like yoga classes, as well as the latest amazing technologies such as virtual showrooms, to create unmatchable event and brand experiences that build loyalty and create a destination for customers,” Bahulkar says. Changing the experience of a store doesn’t just mean offering new services, but also new conveniences. Vicki Cantrell, senior vice president, communities, and executive director of Shop.org for the National Retail Federation, nods to grocery giant Kroger as a retailer that has put the money and research into figuring out how to give their shoppers as frictionless and convenient grocery shopping experience as possible.
RetailDive.com
BRAND 3 STUDI
“There’s a disconnect between what a consumer gets in terms of a merchandising and sales experience online, and what they get when they walk in a store.” - Jennifer Sherman, vice president of strategy and product for Kibo
“ They have put a ton of money and technology in place
shoppers a chance to slip on a virtual reality headset
she says. But once these technologies are nailed down,
that helps understand the checkout line,” Cantrell says.
and experience a Toms shoe distribution — part of
they’ll be more ubiquitous throughout retail and more
“ They’re reduced it by leaps and bounds. Through
their one-for-one mission statement — in remote
turnkey.
technology they figure out how many people they have
parts of the world. Makeup retailer Sephora offers
in line — it’s a very automated way to get customers
consumers an augmented reality experience that
But where retailers are still need to innovate is in
through the process in the most seamless way possible,
allows them to “ try on” different shades of lipstick
combining the in-store experience with the details
and has, in fact, reduced the time to such a degree that
via their app, which can then be purchased in store or
often gleaned from online shopping — what a consumer
customers have noticed. And that builds loyalty.”
through the app.
is searching, what’s in their cart, what they’ve bought in the past — for a more personalized, intimate shopping
What’s more, an increasing number of retailers are
These technologies are still budding on the retail
using augmented reality or virtual reality to entice
scene, but, says Cantrell, they’re catching on faster
consumers into stores, and ratchet up the fun of
than originally thought. “ The early adopters are
“ There’s a disconnect between what a consumer gets
in-person shopping. Shoe entrepreneur Toms offers
doing the development work [of these technologies],”
in terms of a merchandising and sales experience
4
event.
RetailDive.com
BRAND 4 STUDI
online, and what they get when they walk in a store,”
habits, cart abandonment and more, would be able
“ The trick is to let technology disappear and focus
says Jennifer Sherman, vice president of strategy and
to make much better merchandising suggestions and
on storytelling,” Bahulkar says. “ Blatant attempts to
product for commerce software provider Kibo. That
offer a better shopping experience.” That, Sherman
push sales via discounts and coupons are usually not
offers a tremendous opportunity for savvy retailers to
says, is what will convert in-store traffic to actual
effective. Carefully curated recommendations and
empower their retail associates with the technology to
purchases.
thoughtful ways to convey the brand and product
learn who the customer is, rather than try to figure it
story to a customer — at the right time — can have
out based on what the customer may have in hand or is
A.T. Kearney’s Bahulkar notes that virtual trial rooms
huge impact on converting a sale.” Further, reading the
perusing at the in-store moment.
automatically transfer items that that the customer
customer, employing the right analytics, and having
is interested in trying, and advanced mirrors can
the store associate — with knowledge of product avail-
“ Store associates armed with the mobile technology to
recommend overlay and matching items at the ease of a
ability — guide the customer to the sale, “ are all required
see a holistic view of the customer’s online and in-store
touch screen, while tablets and kiosks allow consumers
to create the right immersive experience,” he notes.
shopping history, including past purchases, shopping
to browse and complete transactions in-store.
RetailDive.com
BRAND 5 STUDI
The Retail Store as Distribution Center Besides offering new features and services, retail stores
Creating a brick-and-mortar store that can double as
today are also showcasing to consumers just how well
a distribution center, however, hinges on one precise
they can cater to convenience needs. Consumers, after
combination: Having the technology that can properly
all, have always, and will always, clamor for conve-
track inventory and offer robust omnichannel fulfill-
nience. Same day delivery, in-store pickup, ship-from-
ment functionality, and having an employee base that
store: All of these new delivery options provide that
pays attention to it.
convenience, and retailers are experimenting with the best options. Wal-Mart, says Bahulkar, recently
“ Technology is principally related to inventory
partnered with Uber and Lyft to deliver groceries
control,” says NRF’s Cantrell. “And that’s really
to consumers’ doorsteps. CVS, he adds, is looking at
important because if you have retailers who have, based
curbside pickups to give customers a convenient alter-
on their heritage, multiple channels — store, online,
native to in-store pickup.
catalog or wholesale channels — having the technology to see inventory across your channels, is being able to
But these offerings also come at a cost, one that
have inventory visibility across potentially different
consumers and retailers alike are still trying to
systems.”
decipher. “ Customers are still trying to figure out what convenience matters to them and what convenience
Cantrell cites electronics retailer Best Buy’s in-store
they would be willing to pay for,” Bahulkar notes.
pickup process as one that has the combination of
“ Retailers are also trying to figure out the cost impact
technology and manpower in sync. When a consumer
of providing convenience, and at what point it becomes
orders something online, the technology checks to
a losing transaction.”
ensure it’s in store and can be ready by a specific time.
“Customers are still trying to figure out what convenience matters to them and what convenience they would be willing to pay for.” - Adheer Bahulkar, partner in the retail practice of A.T. Kearney
RetailDive.com
BRAND 6 STUDI
An in-store staffer, then, is “ paying attention to the request, acting on it and communicating it,” Cantrell says. “And when the customer comes in they have a great experience because they walk up to a staffed location, their package is there, they have an easy checkout, and they get an incentive of some sort to either stay in the store or shop at a future time.” But inventory accuracy is not enough if the retailer doesn’t have the technology infrastructure in place to efficiently route and optimize all fulfillment channels. “ To effectively offer omnichannel strategies such as ship-from-store and in-store pickup, retailers need a flexible distributed order management solution that routes orders the most efficient way possible, whether that be by location, cost or customer preference,” said Kibo’s Sherman.
“To effectively offer omnichannel strategies such as ship-from-store and instore pickup, retailers need a flexible distributed order management solution that routes orders the most efficient way possible, whether that be by location, cost or customer preference.” - Jennifer Sherman, vice president of strategy and product for Kibo.
RetailDive.com
BRAND 7 STUDI
Competing No Matter the Size Implementing and employing the technologies needed
that allows for experimentation, and allows them to
to take retail stores from a dying breed to the place to be
much more nimbly change business models, providing
is often a tall order, both in capital and manpower. For
they have equally nimble retail technology.”
larger retailers, absorbing the cost and time to take on such a task is feasible. Even though small- to mid-sized
Instead of trying to tackle all of the new technologies
retailers might not always have the same capabilities,
out there, it’s better for smaller retailers to single out
they don’t have to be left out of the loop.
those technologies that best fit their brand, and invest in that, says A.T. Kearney’s Bahulkar. He cites apparel
“ No matter what size you are, you have to operate to
retailer Bonobos, which has an e-commerce-based
your strengths,” says NRF’s Cantrell. And for small- to
direct-to-consumer delivery model. Even when the
mid-sized retailers, that strength lies in relationships.
retailer opened up physical stores, they didn’t try to
She adds that while popular media is awash with stories
deliver products to consumers in store. “ While the
of big retailers losing foot traffic, it’s not the same story
transaction may occur in the physical store,” he notes,
for smaller, community retailers. “ It doesn’t matter
“ the delivery still happens through their e-commerce
what technology you have, if you screw it up once the
delivery model.”
customer gets in the store, or you haven’t built the relationship, or you haven’t given them a great experience,
Cantrell adds that in today’s environment, retailers
the customer is not going to come back.”
of any size can start a business with little to no investment, consigning or drop-shipping from another
What helps smaller retailers compete is their flexibili-
retailer. Think it, and they can do it. “ There are a lot of
ty. “ The advantage that the smaller retailer has is they
options there never were before.”
can be more agile,” Kibo’s Sherman says. “ It’s a segment
RetailDive.com
BRAND 8 STUDI
Conclusion When it comes to the retail experience, retailers have to determine how they want to meet those consumer demands — either through the experience aspect of a shopping trip or enabling consumers to do the bulk of their shopping wherever they may be, in-store or not. By focusing on their consumer and the needs of their brand, and applying the right technologies, they can navigate the ever-shifting retail environment.
RetailDive.com
BRAND 9 STUDI
About Kibo is the strategic merger of industry leaders, MarketLive, Shopatron, and Fiverun. With a combined 40 years of innovations, Kibo joined forces to help retailers and branded manufacturers unify the consumer experience. Kibo is a complete omnichannel commerce platform, delivering the lowest total cost of ownership and the fastest time to market. With predictive technologies and enterprise performance, we can help you achieve increased sales. No matter the challenge, Kibo powers your success.
Sources 1. http://www.mintel.com/press-centre/technology-press-centre/nearly-70-of-americans-shop-online-regularly-with-close-to-50-taking-advantage-of-free-shipping 2. http://www.wsj.com/articles/department-stores-need-tocull-hundreds-of-sites-study-says-1461520952 3. http://www.cnbc.com/2016/04/01/10-retailers-defyingwave-of-store-closings.html?slide=5 4. http://phys.org/news/2016-04-retail-virtual-reality-fun. html
A RETAIL DIVE PLAYBOOK
T
he retail ecosystem isn’t what it
downswing, and online options are on the upswing. In
used to be. Retailers from a decade
fact, a recent Wall Street Journal article, citing research
ago are in sharp contrast to what
from Green Street Advisors, notes that retailers would
you see today: There were more
need to close hundreds of stores if they want to see the
stores, regular foot traffic and a
same levels of robust prosperity that they saw in 2006.2
vast amount of square footage per
customer. Today’s retail landscape is still made up of
Despite the increase in online shopping, some retailers
brick-and-mortar stores — though fewer of them — but
are increasing their brick-and-mortar presence3 while
now includes myriad options that allow consumers to
others are taking a hard look at where they can improve
wield their purchasing power without ever setting foot
on the in-store experience, or reinvent themselves as a
in a store.
distribution hub for consumers who want to combine their online and in-store experience.
According to a 2015 U.S. online shopping report from Mintel, nearly 70 percent of adult consumers shop
“ Stores are now serving multiple purposes, and new
1
online at least monthly. About 33 percent shop
purposes are constantly being imagined,” says Adheer
online weekly. These numbers can be expected to
Bahulkar, partner in the retail practice of A.T. Kearney,
climb, as retailers make it increasingly convenient for
a global strategy and management consultancy.
consumers to do the bulk of their shopping online,
“ Stores are points of sale, distribution centers, they
without ever setting foot in a store.
are showrooms, they are event or brand experience
Nearly 70 percent of adult consumers shop online at least monthly.1 About 33 percent shop online weekly.
centers, and they are entertainment hubs. Each of these With the increase in online shopping, are brick-and-
purposes can entice a different set of customers to the
mortar stores doomed to extinction?
stores.”
Not likely, although the rapid changes in retail technology have redefined how retailers need to strategize their success for the future, where physical stores are on the
RetailDive.com
BRAND 2 STUDI
The Retail Store as an Experience Though a large portion of consumers is taking to apps and websites to shop, shoppers still want to see and touch the merchandise they’re considering. That said, savvy retailers are upping the ante on in-store offerings to entice and increase foot traffic. Stepping foot inside a store today isn’t just about browsing the merchandise, it’s a full-on sensory experience. “ Retailers like Rebecca Minkoff are using local events, like yoga classes, as well as the latest amazing technologies such as virtual showrooms, to create unmatchable event and brand experiences that build loyalty and create a destination for customers,” Bahulkar says. Changing the experience of a store doesn’t just mean offering new services, but also new conveniences. Vicki Cantrell, senior vice president, communities, and executive director of Shop.org for the National Retail Federation, nods to grocery giant Kroger as a retailer that has put the money and research into figuring out how to give their shoppers as frictionless and convenient grocery shopping experience as possible.
RetailDive.com
BRAND 3 STUDI
“There’s a disconnect between what a consumer gets in terms of a merchandising and sales experience online, and what they get when they walk in a store.” - Jennifer Sherman, vice president of strategy and product for Kibo
“ They have put a ton of money and technology in place
shoppers a chance to slip on a virtual reality headset
she says. But once these technologies are nailed down,
that helps understand the checkout line,” Cantrell says.
and experience a Toms shoe distribution — part of
they’ll be more ubiquitous throughout retail and more
“ They’re reduced it by leaps and bounds. Through
their one-for-one mission statement — in remote
turnkey.
technology they figure out how many people they have
parts of the world. Makeup retailer Sephora offers
in line — it’s a very automated way to get customers
consumers an augmented reality experience that
But where retailers are still need to innovate is in
through the process in the most seamless way possible,
allows them to “ try on” different shades of lipstick
combining the in-store experience with the details
and has, in fact, reduced the time to such a degree that
via their app, which can then be purchased in store or
often gleaned from online shopping — what a consumer
customers have noticed. And that builds loyalty.”
through the app.
is searching, what’s in their cart, what they’ve bought in the past — for a more personalized, intimate shopping
What’s more, an increasing number of retailers are
These technologies are still budding on the retail
using augmented reality or virtual reality to entice
scene, but, says Cantrell, they’re catching on faster
consumers into stores, and ratchet up the fun of
than originally thought. “ The early adopters are
“ There’s a disconnect between what a consumer gets
in-person shopping. Shoe entrepreneur Toms offers
doing the development work [of these technologies],”
in terms of a merchandising and sales experience
4
event.
RetailDive.com
BRAND 4 STUDI
online, and what they get when they walk in a store,”
habits, cart abandonment and more, would be able
“ The trick is to let technology disappear and focus
says Jennifer Sherman, vice president of strategy and
to make much better merchandising suggestions and
on storytelling,” Bahulkar says. “ Blatant attempts to
product for commerce software provider Kibo. That
offer a better shopping experience.” That, Sherman
push sales via discounts and coupons are usually not
offers a tremendous opportunity for savvy retailers to
says, is what will convert in-store traffic to actual
effective. Carefully curated recommendations and
empower their retail associates with the technology to
purchases.
thoughtful ways to convey the brand and product
learn who the customer is, rather than try to figure it
story to a customer — at the right time — can have
out based on what the customer may have in hand or is
A.T. Kearney’s Bahulkar notes that virtual trial rooms
huge impact on converting a sale.” Further, reading the
perusing at the in-store moment.
automatically transfer items that that the customer
customer, employing the right analytics, and having
is interested in trying, and advanced mirrors can
the store associate — with knowledge of product avail-
“ Store associates armed with the mobile technology to
recommend overlay and matching items at the ease of a
ability — guide the customer to the sale, “ are all required
see a holistic view of the customer’s online and in-store
touch screen, while tablets and kiosks allow consumers
to create the right immersive experience,” he notes.
shopping history, including past purchases, shopping
to browse and complete transactions in-store.
RetailDive.com
BRAND 5 STUDI
The Retail Store as Distribution Center Besides offering new features and services, retail stores
Creating a brick-and-mortar store that can double as
today are also showcasing to consumers just how well
a distribution center, however, hinges on one precise
they can cater to convenience needs. Consumers, after
combination: Having the technology that can properly
all, have always, and will always, clamor for conve-
track inventory and offer robust omnichannel fulfill-
nience. Same day delivery, in-store pickup, ship-from-
ment functionality, and having an employee base that
store: All of these new delivery options provide that
pays attention to it.
convenience, and retailers are experimenting with the best options. Wal-Mart, says Bahulkar, recently
“ Technology is principally related to inventory
partnered with Uber and Lyft to deliver groceries
control,” says NRF’s Cantrell. “And that’s really
to consumers’ doorsteps. CVS, he adds, is looking at
important because if you have retailers who have, based
curbside pickups to give customers a convenient alter-
on their heritage, multiple channels — store, online,
native to in-store pickup.
catalog or wholesale channels — having the technology to see inventory across your channels, is being able to
But these offerings also come at a cost, one that
have inventory visibility across potentially different
consumers and retailers alike are still trying to
systems.”
decipher. “ Customers are still trying to figure out what convenience matters to them and what convenience
Cantrell cites electronics retailer Best Buy’s in-store
they would be willing to pay for,” Bahulkar notes.
pickup process as one that has the combination of
“ Retailers are also trying to figure out the cost impact
technology and manpower in sync. When a consumer
of providing convenience, and at what point it becomes
orders something online, the technology checks to
a losing transaction.”
ensure it’s in store and can be ready by a specific time.
“Customers are still trying to figure out what convenience matters to them and what convenience they would be willing to pay for.” - Adheer Bahulkar, partner in the retail practice of A.T. Kearney
RetailDive.com
BRAND 6 STUDI
An in-store staffer, then, is “ paying attention to the request, acting on it and communicating it,” Cantrell says. “And when the customer comes in they have a great experience because they walk up to a staffed location, their package is there, they have an easy checkout, and they get an incentive of some sort to either stay in the store or shop at a future time.” But inventory accuracy is not enough if the retailer doesn’t have the technology infrastructure in place to efficiently route and optimize all fulfillment channels. “ To effectively offer omnichannel strategies such as ship-from-store and in-store pickup, retailers need a flexible distributed order management solution that routes orders the most efficient way possible, whether that be by location, cost or customer preference,” said Kibo’s Sherman.
“To effectively offer omnichannel strategies such as ship-from-store and instore pickup, retailers need a flexible distributed order management solution that routes orders the most efficient way possible, whether that be by location, cost or customer preference.” - Jennifer Sherman, vice president of strategy and product for Kibo.
RetailDive.com
BRAND 7 STUDI
Competing No Matter the Size Implementing and employing the technologies needed
that allows for experimentation, and allows them to
to take retail stores from a dying breed to the place to be
much more nimbly change business models, providing
is often a tall order, both in capital and manpower. For
they have equally nimble retail technology.”
larger retailers, absorbing the cost and time to take on such a task is feasible. Even though small- to mid-sized
Instead of trying to tackle all of the new technologies
retailers might not always have the same capabilities,
out there, it’s better for smaller retailers to single out
they don’t have to be left out of the loop.
those technologies that best fit their brand, and invest in that, says A.T. Kearney’s Bahulkar. He cites apparel
“ No matter what size you are, you have to operate to
retailer Bonobos, which has an e-commerce-based
your strengths,” says NRF’s Cantrell. And for small- to
direct-to-consumer delivery model. Even when the
mid-sized retailers, that strength lies in relationships.
retailer opened up physical stores, they didn’t try to
She adds that while popular media is awash with stories
deliver products to consumers in store. “ While the
of big retailers losing foot traffic, it’s not the same story
transaction may occur in the physical store,” he notes,
for smaller, community retailers. “ It doesn’t matter
“ the delivery still happens through their e-commerce
what technology you have, if you screw it up once the
delivery model.”
customer gets in the store, or you haven’t built the relationship, or you haven’t given them a great experience,
Cantrell adds that in today’s environment, retailers
the customer is not going to come back.”
of any size can start a business with little to no investment, consigning or drop-shipping from another
What helps smaller retailers compete is their flexibili-
retailer. Think it, and they can do it. “ There are a lot of
ty. “ The advantage that the smaller retailer has is they
options there never were before.”
can be more agile,” Kibo’s Sherman says. “ It’s a segment
RetailDive.com
BRAND 8 STUDI
Conclusion When it comes to the retail experience, retailers have to determine how they want to meet those consumer demands — either through the experience aspect of a shopping trip or enabling consumers to do the bulk of their shopping wherever they may be, in-store or not. By focusing on their consumer and the needs of their brand, and applying the right technologies, they can navigate the ever-shifting retail environment.
RetailDive.com
BRAND 9 STUDI
About Kibo is the strategic merger of industry leaders, MarketLive, Shopatron, and Fiverun. With a combined 40 years of innovations, Kibo joined forces to help retailers and branded manufacturers unify the consumer experience. Kibo is a complete omnichannel commerce platform, delivering the lowest total cost of ownership and the fastest time to market. With predictive technologies and enterprise performance, we can help you achieve increased sales. No matter the challenge, Kibo powers your success.
Sources 1. http://www.mintel.com/press-centre/technology-press-centre/nearly-70-of-americans-shop-online-regularly-with-close-to-50-taking-advantage-of-free-shipping 2. http://www.wsj.com/articles/department-stores-need-tocull-hundreds-of-sites-study-says-1461520952 3. http://www.cnbc.com/2016/04/01/10-retailers-defyingwave-of-store-closings.html?slide=5 4. http://phys.org/news/2016-04-retail-virtual-reality-fun. html
