The role of the brick and mortar store is evolving. In order to provide the expected omni-channel experience to customers, retailers need to re-train the store through four key properties including store design and branding, personalisation, omni-channel hub and operations and the intelligent store, according to EKN's Second Annual Future of Stores Benchmark, underwritten by HP, Tyco and Xerox. Based on a survey of 100+ retailers, the study also outlines three critical enabling capabilities retailers plan to invest in and leverage to drive this new store transformation including customer insights, technology capabilities and organisational re-design.
Key takeaways from the study include:
Store Design and Branding: Stores as large, cookie-cutter stock rooms and showrooms will give way to more immersive experiences, and retailers will experiment with new formats such as flagship and pop-up stores. Survey results show that 48% of retail "leaders"(1) plan to open flagship stores in the next 12 months compared to 36% of laggards.
Personalisation: As retailers refocus their efforts on bringing stores to life, in-store customer engagement and personalisation have become key priorities but execution lags intent. EKN's survey does show that one-third of retail leaders allow store associates to give real-time coupons to customers in-store compared to 15% of laggards.
Omni-channel Hub: Stores need to move from a destination of commerce to a hub of omni-channel customer engagement. However, a lack of process integration, limited software capabilities and limited inventory visibility are the top three challenges retailers face in offering store fulfilment of online orders.
The Intelligent Store: The concept of the intelligent store sits at the intersection of analytics and technology, but with new technologies like RFID, iBeacons, NFC, the "Internet of Things" and big data, the lines will blur between what is store technology vs. what is the store itself. Survey results show that one-third of retail leaders will use mobile in-store analytics in the next 12 months compared to 23% of laggards.
"Reports of the death of the store have been greatly exaggerated. Retail stores still currently account for more than 90% of revenue for most retailers. What's more, 97% of retailers believe the store to be their biggest differentiator, and 80% of millennials prefer to shop in stores. Brick and mortar stores will not die, they will evolve as they have done in the past," said Gaurav Pant, Principal Analyst for EKN. "Retailers need to ramp up the 'experience' factor and adapt to cultural and business process changes. This will give the store a customer-centric environment that will provide a winning differentiation from the digital world."
(1) Leaders are those respondents who consider themselves excellent in terms of customer satisfaction vs. industry.