Just a year ago, the headlines were full of the retail “apocalypse”. This negative development has changed – Nikki Baird speaks of a resurgence in retail. Baird is Chief Strategy Officer at Aptos, an enterprise software provider specializing in retail. “Never before have we seen the importance of brick-and-mortar retail and what it can really bring in terms of business efficiencies and customer retention,” she tells FashionUnited. “It’s an exciting time.” But are we ready for it?
During the pandemic, such a forecast would have sounded like a throwback to the days before Amazon and Co., but Baird also warns that disruptions are to be expected. In recent years, due to a lack of footfall, retailers have not invested in new technology in their stores and are now footing the bill. “Many payment devices no longer meet the security requirements and have to be replaced. Cash registers use two very old Microsoft retail operating systems that will be phased out in a few years. Retailers have to replace everything, the hardware, the operating systems and the software that runs on them,” explains Baird.
Revival is the goal
Nobody likes it when their own favorite store closes or when the shopping streets have empty properties. However, this was another unfortunate consequence of increased online shopping during the two years of the pandemic. At the same time, the importance of the personal shopping experience, especially that of GenZ, was underestimated. “GenZ spends so much time online that they are looking for a balance. If retailers make the in-store experience attractive, they will come,” said Baird. “The hard part is just defining what constitutes that experience.”
Retailers should invest in customer and service-oriented measures. These tend to be more labor intensive, which in turn means more hires. Traditional tactics like a trunk show or a big sale are no longer enough to attract customers. Levi’s offers its customers the option to embroider their jeans or swap out the buttons, providing a good example of a successful customer retention strategy. Baird explains, “It’s going to be participatory. It addresses the need for personalization. You can’t do that online. It’s worth going into the store to experience.”
Technology is not a dirty word
The word technology is rarely mentioned at retail conventions these days, but the fact that the internet exists is undeniable. “We’ve backtracked a bit, almost like the business is a tech-free zone,” says Baird. “It’s not about having the technology right under your nose, it’s about integrating it seamlessly into the shopping experience.”
Employees encourage commitment
The role of the seller will also be crucial for the new store experience. Employees should walk through the store with mobile devices and interact with customers who are used to shopping via a screen. Mobile shopping carts that can be moved around the store and clerks who can bag products on the spot are no longer making the checkout the focal point of the store experience — in many cases, it could even be removed entirely. “If the tills are removed from stores to open up space, the face of stores could really change over the next three to five years,” says Baird.
In practice, however, there are a few challenges: The device for removing the security label must be accessible to employees on the go, but out of the reach of customers to prevent theft.
Importance of pop-ups
“Pop-ups are an experiment in location and format, allowing labels to test new markets before strategically committing themselves,” explains Baird. A recent example is New York cupcake company Baked by Melissa’s decision in October to choose Boston as the location for its first nationwide expansion. The reason for opening a pop-up on the city’s waterfront stemmed from the large number of orders coming in from Boston during the pandemic. The company can now test whether Boston consumer behavior extends beyond the pandemic before entering into a long-term real estate deal.
Short-term leases are also becoming increasingly popular in order to avoid vacant retail space in shopping centers and streets. Founded in 2017, Popable wants to play the role of intermediary in this area. The firm already works with real estate partners such as Simon, Kymco and Brookfield Property Partners and recently added Walmart to its portfolio of more than 10,000 brands. In time for the holiday season, Walmart will be leasing storefronts and temporary retail space to small brands that want to avoid expensive long-term leases.
The all-important dressing room
“If I had a business, the dressing room would be the focus,” says Baird. “They would be luxurious and there would be a lot of them because I want everyone to be there.” Baird describes a not too distant future where consumers can interact with the mirror in the fitting room and their desired size will fall from a vacuum tube from the ceiling. The moment of change of mind takes place in the fitting room, so making that moment as comfortable as possible for customers should be every retailer’s priority. What was neglected during the pandemic will now play a central role in the success of a business.
The possibility of withdrawal
Retailers shouldn’t try to mimic Amazon’s returns policy because that would not only be impossible, but also bad business. When customers return an item in-store, it’s an opportunity for engagement to sell something else at that point. “They don’t want to cause customers any inconvenience, but they also don’t want the return to be an unnecessary stop. There’s a happy medium for that,” says Baird. Having a conversation about what is wrong with the item and what can be done to make the customer happy will help restore consumer loyalty after the pandemic. It can also help counter bad behaviors influenced by the pandemic, such as bracketing, the habit of carelessly ordering multiple sizes online, keeping one, and returning the rest. To be more sustainable here, retailers could offer a discount if items are returned in their original packaging.
This translated post previously appeared on FashionUnited.uk. Translation and editing: Pia Schulz.