Why Digital-Native Retailers are Going Offline
Imagine going to an airport without self-service counters. Wouldn’t that be odd?
After almost 3 years of COVID, I feel the same going to a grocery store that doesn’t offer self-check-out counters, Buy Online Pick In Store (BOPIC) or home delivery.
I was using self check-out well before the pandemic made it necessary, but I’m not alone. About 70% of shoppers in the US who tried self-checkout for the first time during the pandemic say they’ll use it again.
For retailers, the choice isn’t between speed or convenience. It’s both.
Even the digital-native retailers are going offline.
We’re doing more online shopping and even getting groceries delivered to our homes.
The motion isn’t just from offline to online.
Even the digital-native brands that benefitted from the DTC boom are now building physical stores.
The online plant subscription brand The Sill is rapidly opening new stores even though most of its sales still come from online.
In an interview with Modern Retail, The Sill’s CEO Eliza Bank explained that their stores have become an integral part of the business “especially when it comes to personalised customer service and increasing retention.”
She also believes that meeting their customer in person has allowed her team to focus on providing better service, “it’s more about having the product they want versus relying on digital marketing for conversion.”
The Sill is an excellent example of how retail (physical and online) is transitioning to a digital world.
Bank believes that her stores are “another touchpoint for interacting with customers — not only for increasing basket sizes by helping customers grow their house plant collections, but also providing customer service. “
How is tomorrow’s in-store shopper different?
McKinsey’s Tiffany Burns and Tyler Harris explain that the modern in-store customer is someone who is interacting with the brand across multiple touchpoints.
And the data they’ve gathered over the last couple of years confirms that omnichannel customers shop 1,7x more than single-channel shoppers and spend more.
Shoppers want in-store experiences to be less transactional and more consultative.
Macy’s adapted to this change by modernising its stores by going back to the basics.
They’re training their store associates to become personal stylists as a part of the ‘Own Your Style’ program.
But that’s nothing new.
In fact, Nordstrom’s and other major retailers have been doing that for years.
But Macy’s isn’t stopping there.
On top of receiving a commission on sales, Macy’s associates will also get bonuses for their social media posts that lead to customer sales.
Shoppers want retail locations to offer more service and convenience.
The recent collaboration between Target and Stoney Clover Lane is an excellent example of this transformation.
The two brands are coming together to offer a multi-day carnival in LA packed with local food vendors and never-ending opportunities for capturing social media moments.
In an interview with Glossy, the brand’s co-founder Libby Glazer explained that “This experience is a content playground dream come true. And since it’s a multi-day celebration, someone might see posts about the boardwalk on Friday and then decide to visit us later in the weekend, which is a great opportunity for us to introduce new faces to Stoney Clover Lane.”
And finally, tomorrow’s in-store shoppers expect retailers to carry more sustainable products and promote DEI efforts by giving shelf space to smaller brands.
What do retailers need to do differently?
Despite more than 90% of leading retailers either currently investing or planning to invest in omnichannel retail, only 8% think they’ve mastered it.
And only 1 in 10 customers thinks that companies today are delivering a seamless omnichannel experience.
This transformation isn’t going to be simple.
And looking at tech alone isn’t going to give you all the answers.
For instance, for many large retailers giving shelf space to small local brands can be challenging. So, your retail operations have to adapt.
Then there are customers who expect seamless retail experiences, but retail organisations are still split between online and offline silos — and measured with separate KPIs.
And then there are same-day deliveries clogging up the roads and increasing noise pollution in the neighbourhoods and creating more packaging waste.
Succeeding in this new era of retail requires a new management mindset. One that enables a seamless retail experience without losing sight of the impact on local communities and the environment.
