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How physical retail has revamped its approach to compete with digital

A guest article by Dr. Rahmyn Kress, Chief Digital Officer at Henkel


What is clear from all of these new avenues and operations, is how important data collection is and continues to be to the future of retail.

Attention-grabbing headlines about the demise of the brick-and-mortar retail store are only becoming more frequent. But the part of the story that’s being left out is how physical retail is, at times, helping drive online sales and vice versa. From clever data-collecting techniques, to regular in-store experiences, to loyalty building exercises – prescient companies are finding unique opportunities in the current retail landscape.

Nike has launched a new flagship store in New York. An impressive six-floor, 68,000-square-foot space, but more notable than its size is the focus on customer experiences and conveniences. You can “speed shop” by reserving sneakers ahead of time online. When you arrive, they will be waiting in a digitalized locker with your name displayed and controllable via your iPhone. At the end, it’s no more than a few taps on your iPhone to checkout. What’s more – any mannequin sporting a slick top or interesting item you spot around the store – you can simply scan its QR code and have that item sent to a fitting room in your correct size.

According to John Hoke, Nike’s Chief Design Officer, the next step for retail is a blend of digital and physical, “Imagine the website, live,” says Hoke. “The future of retail is going to be less fixed, more fluid, and hyper-responsive to consumer trends and needs.”

Similarly, one of the members of our Henkel X Mentorship Club – a physical and digital network connecting the brightest minds in entrepreneurship – Adam Levene tweeted an article on this exact subject. The article from fashion and beauty website Glossy, looks at how sales associates at Harvey Nichols in London are driving online business. Late last year the upscale department store chain launched AskHN, training 60 associates across store locations to answer the questions of customers shopping the e-commerce site. Conversation rates for shoppers using AskHN have been more than 10 times the site average, and their average order value is 63 percent higher.

It’s actually initiatives like this that are Levene’s specialty. In 2015, he founded Hero, a company that works with global brands to transform analogue retail space into digitally savvy stores. With offices in both London and New York, Hero works with a team of designers, retail specialists and data scientists to prepare businesses for the ensuing innovation in the consumer marketplace.

In the article Levene explains: “People now understand that online is not killing the store; there has to be a combination of the two. Most of our retail partners recognize the only way they’re going to be able to battle Amazon is to invest in their store network, invest in their people, invest in their digital, and make sure they’re giving staff the necessary technology and tools.”

The future of retail lies in the combination of online and offline services: In-store customer experience needs to be supported by digital tools.

The Wall Street Journal magazine ran an article at the beginning of 2018 that espouses a similar sentiment, and it is the stores that are equipping their staff with the most cutting-edge information and adopting technology to enhance the retail experience that are succeeding. As the article outlines, “Some stores are bringing in facial-recognition technology to alert salespeople that a customer in their loyalty program has walked in. Others, tapping into the popularity of how-to videos and social media, are installing mirrors that double as video screens and cameras to record a makeup artist’s step-by-step application, which then can be sent to the customer’s phone.”

In store, customers can easily access product information and tutorials directly via their smartphone.

This aligns with a new announcement from Walmart, outlining the retail giants plans to work with its in-store customers to purchase items that aren’t physically stocked. What that means in practice is that sales associates with be positioned throughout the store with Walmart’s new in-store app; anything customers can’t find in-store, the sales team can help them find on and have the item shipped to the customer’s home. This is a service that’s been available to Target customers for over a year. Target has even integrated a mobile credit card reader into its checkout system. Likewise, Amazon now operates its own brick-and-mortar locations beyond Whole Foods, such as its cashierless Amazon Go stores.

Products that are not physically stocked can be sent to the customer’s home with in-store app solutions.

Brick-and-mortar stores need to play to their strengths – their on-the-ground service teams, as well as offering customers experiences such as events, in-store exclusives and hands-on tutorials. The live event and experiential market is booming for brands and venues alike, so it will be the savvy retail outlets that capitalize on this and thrive.

In order to achieve success, companies need to build up loyalty and direct relationships with their consumers through their suite of apps and in-store experiences. In fact, the more each brand understands their customer’s needs and the related trends, the better they and their retail partners can develop that product and deliver that experience. For us at Henkel, our relationship with retail, regardless of whether that’s online or not, is that it’s our goal to be the best possible partner – more agile, more astute, more responsive – and together build out the most successful customer experience.

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