Blurred Lines: The Changing Face Of Physical Retail

Young Beautiful Woman Sitting On Couch Shopping Online
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This year Australian’s are expected to spend more than $46 billion over the Christmas period, $7 billion of which will be spent online*. These impressive figures highlight the ever-increasing importance of ‘online shopping’ as a key area of growth for retailers.

However, the notion of online shopping as being distinct from in-store shopping is false, as increasingly the line between internet-based and real-world behaviour is becoming blurred.

Shopper journeys – from trigger to transaction – increasingly play out over numerous channels and on multiple devices. From inspiration seeking to bargain hunting, consumers are embracing the connected world. There has been a fundamental power shift in the landscape and consumers have gone from passive receivers to empowered decision makers; no longer happy to accept what they are offered, and are willing to hunt out and bargain for the best products at the best price.

In a recent poll, one fifth of Australians said they’ll be relying on their smartphone more than sales staff for help in store when they’re Christmas shopping (Metrix/ SSI Christmas Shopping Poll). This raises a number of important issues around declining customer service expectations, digital / in store shopping integration, and empowered, savvy shopping behaviour. It also reflects the bigger, longer term opportunity in retail: to deliver more responsive mobile-led technology as a way to enhance the physical shopping experience for consumers.

‘Click and collect’ also plays to changing role of the physical store – and almost 20 per cent of shoppers say they’re going to rely on ‘click and collect’ services over Christmas to save time when buying gifts (Metrix/ SSI Christmas Shopping Poll).

Asda, the UK’s second largest grocer, is taking ‘click and collect’ to the next level and have launched a new service that allows for collection (and return) of parcels bought from third party retailers through their stores – you can go to your local supermarket and pick up your Amazon shopping along with you milk. It’s been somewhat dramatically hailed as ‘game-changing’, but it certainly does demonstrate bold and brave thinking from a large corporation faced with the challenge of driving footfall into their stores.

Back home in Australia, Target is re-defining the in-store experience to help drive foot traffic. They have opened eight new stores with bra fitters and seamstresses ready to adjust clothing while kids frolic in play areas and mums sip their lattes at in-store cafes. This provides a clear value proposition vs. online shopping, and gives the customer a reason to visit the physical store.

The above examples demonstrate a focus on two important aspects of retail that will act as key growth drivers over the long term:

  • Genuine integration of digital and physical retailing: finding new ways to engage shoppers (on their devices) to build a richer shopping experience across different channels.
  • Disruptive innovation of the in-store experience: building a newly defined role and purpose for stores (and staff) that play to the changing needs of empowered consumers.

These two drivers are not being presented as exhaustive and could no doubt be the subject of debate. But what is irrefutable is this: retailers today need to engage, learn and act quickly. They must innovate based on a deeper, more intimate understanding of consumers and their shopping behaviour across channels.

This requires more than customer feedback surveys and focus groups; it’s about applying ethnographic principals and more design thinking to insight gathering, to observe and interrogate genuine behaviours that will bring the truly ground-breaking advances.

This complex and ever-changing landscape will require adaptive and brave action to survive and grow, and there will no doubt be spectacular failures along the way. But as demonstrated through history, the best innovation is based on revealing the fundamental human needs that underpin behaviour, identifying the core tension that can be leveraged, and focusing on how best to solve this problem in a more relevant and meaningful way.

Today, this means not thinking about online vs in-store behaviour, but joining the dots through a more holistic view of the consumer experience and shopper journey, taking into account the broader context of peoples’ lives and understanding how their devices, (and retailers) fit into their worlds.

*http://www2.deloitte.com/au/retailers-survey-2015.html

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