Physical stores out of touch with modern consumers

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Recently, I was sitting in a meeting with clients from a large consumer packaged goods company who were discussing amongst themselves how the company’s CMO had added an extraordinary number of people with digital and omnichannel expertise to his team, while they, the customer team leads, had a hiring freeze. Yet, they’re the ones who work closely with retailers where Americans still buy most of their everyday products.

Wendy Liebmann

Nine out of 10 shoppers still buy food, beverages, health care, beauty, baby care and more in physical stores. Yet, if you walk through many stores today, the look, feel, imagery, service levels and overall emotional resonance have barely changed in the last two decades. Why two decades? That’s when new digital technologies began to emerge. That’s what our clients were reacting to: the fact that disproportionate dollars were being spent on digitally focused resources and not on improving the primary shopping place, the physical store.

As technology has flattened the retail landscape, and made shopping (and many other things) more accessible from every street corner and from planes and trains, companies of all kinds have invested deeply in digital, learning — and spending — to catch up with shoppers, and compete with the likes of Amazon.

All the while, the physical store has vegetated. The wall, the counter and the much-maligned shelf have been left mostly unattended and mightily unadorned (with the exception of a plethora of sales signs).

To their credit, manufacturers and retailers have invested in analyzing how consumers shop specific categories, how to organize for a more efficient shopping experience, how to be more relevant through shopper marketing activities — and, yes, how and where to engage shoppers with digital tools.

But in spite of all that, maybe because of it, I challenge you to find an emotional connection in most stores, in most channels of retail. Take a look at food, personal care products, health care, even the emotionally resonant — and for some of us, transformative — beauty category.

Think about how, what or if the in-store shopping experience you personally have — and, more importantly, your shoppers have — has fundamentally changed since … you were a kid. The center aisle in the grocery store is still the bane of most retailers’ and brands’ existence. No surprise that a number of categories carried there are now bought online.

The “front store” in most drug stores still has beauty on one side and nonprescription health care on the other side, with convenience snacks (some now healthier, I will admit) near the entrance (still). The pharmacy, the crown jewel of health care, is still (buried) at the back. In mass merchandisers, like Walmart and Target Corp., grocery is near one entrance, soft goods near the other. Little has been done to innovate since Target crossed category and merchant lines to present all baby products together in one place to make mom’s life easier. (How long ago was that — a decade perhaps?) While the perimeter of big boxes has improved, they’re still laid out much as they were before digital changed how shoppers buy before, during and after their trip.

Digital is only part of the story

It’s not that the investment in digital is not critical. It is. Shoppers are way ahead of us. It is their bridge to the world, work, life. That said, while people spend more and more of their days connected, they continue to do most of their everyday shopping in physical stores, at the shelf, at the counter. That goes for younger shoppers too.

I am not suggesting that digital expertise (tools, analytics and shopping) is not essential for today’s businesses. I am suggesting that we must put emotion back on the shelf, back into the way we deliver categories and brands, into the way we communicate, and add value (not only price) in the store to succeed.

Jeff Gennette, Macys Inc.’s new CEO, summed it up at the recent ShopTalk conference in Las Vegas. “You cannot starve brick-and-mortar to feed e-commerce.” That’s a lesson many still have to learn.

Who’s getting it right?

Interestingly, many digital startups expanding into physical spaces are getting it right. They told their stories at ShopTalk. Companies like Bonobos; Casper; Glossier, the blog to beauty brand phenom; travel company Away; Canadian clothing company Frank and Oak; and Amazon with its new Amazon Go convenience store and Amazon Books.

Gianna Peurini, vice president of Amazon Go, talked about all the things she was learning as the company moved from digital to physical as it leveraged its “walk-out technology” that enables shoppers to get what they want fast (whether food or books). While she noted that the concept was all about convenience, she recognized the humbling challenges of having a physical space: the need for the right stuff, at the right time, organized intuitively the way shoppers want to buy it and delivering an experience worthy of the price, including learning what role Amazon associates should play in the space (now that they are not needed at the checkout).

I moderated a panel on “The Future of Brands” at the conference. Amy Errett, founder of Madison Reed, the new online hair color company, now opening salons, and Michele Levy, who sells Melissa Shoes in the U.S., both talked about the importance of the physical space to communicate their brand messages, whether actually coloring hair or using it to build a sense of community through exclusive collections and experiences as Melissa does in its stores or other retailers. Also on my panel was Troy Nelson, vice president of shoes at Nordstrom. He worked in Nordstrom Rack and Trunk Club before moving into this position. We discussed how Nordstrom is leveraging its many touchpoints, including physical and digital, wholesale, retail and direct-to-consumer; its Pop-In departments; and the newest Nordstrom Local services-only store in LA, and what each experience must deliver for shoppers.

Build my magic box

All this brought to mind our 2015 WSL “How America Shops” study titled “Build My Magic Box.” We wanted to understand people’s expectations of physical stores in this digital age. The title came directly from a shopper, who said what she expected from retailers now was that they “build me a magic box.” That didn’t mean only bells and whistles, shiny signs and apps. She wanted the physical store to build an emotional connection with her — from the car park to the door, from the aisle to the shelf.

If we do not connect our brands, our categories, to shoppers in meaningful, relevant, emotional, non-commoditized ways, at every touchpoint — especially the retail shelf — we will continue to see sales in stores decline. As more and more digital-first companies open physical stores, they will bring a new lens. They will not be burdened by traditional retail practices. The good ones will look at the opportunity with a gimlet eye. As the Millennial CEO of Frank and Oak said recently, “When you only do e-commerce you’re missing so much … the store is all about driving customer engagement. In our generation we don’t need stores. So you have to make a choice: What kind of [a retail] experience do you want to offer?” Enough said.

Wendy Liebmann is chief executive officer and chief shopper of WSL Strategic Retail, a global retail strategy and shopper insights consultancy, and publisher of “How America Shops.”



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