Not since 1962 and the birth of the big box store, has brick and mortar shopping undergone such a change. 50 years ago, the retail industry was shaken by the introduction of huge discount stores, the likes of K Mart, Target and Wal-Mart, that challenged the mom-and-pop stores that dominated the market at the time. Now brick and mortar stores of all sorts are being challenged by the online revolution and the idea of Omni-channel retail. Though this doesn’t mean sudden death for brick and mortar retailers, it does mean brands need to re-think their sales funnels to include both physical locations as well as online retail options. That also means considering not only how they’re showcasing and selling their products but whether they’re creating an enticing culture in which shoppers can form a relationship with their brand.
Technology and Your Brand
With the rise of the Millenial, and now the gen-Z’er the playing field for retail has shifted. Consumers no longer lead with their wallets, rather, social and corporate responsibility have become the guiding criteria for purchase decisions. Social media has provided various types of platforms on which retailers can share their ethos and link a lifestyle to their brand. In order to sell their product, companies will now have to create a cultural experience that attracts the buyer first, by identifying and aligning with their world views, not just their personal preferences in fashion, for instance.
In a recent study of 3000 American consumers by Big Commerce, it was found that only 9.6% of gen-Zers actually purchase items from physical stores. Rather, they, as well as millennials, prefer shopping through social media, and specifically on Snapchat and Instagram most. Gen-Xers prefer shopping on Facebook, while baby boomers are the segment who spend the most in brick and mortar stores as the idea of being able to try out a product in person, still appeals. Interestingly, all customers, irrelevant of age group, reported shopping on all channels, so limiting your offering to only one channel is no longer enough if you want your brand to remain competitive.
The trend isn’t confined to the U.S. market either, with Singaporeans noted as the biggest online shoppers of South-east Asia. According to the study by Visa, 50% of Singaporeans surveyed even went so far as stating they’d prefer to do all of their shopping online if possible.
The millennial concept of valuing experiences over things seems to have caused this shift in the retail environment. Brands like Sephora, Dr. Martens and Samsung are leading the way to meet this shift in demand by creating experiences in their stores that are not focused on a sale at all but rather on providing an opportunity for customers to immerse themselves in an experiential offering. Whether a new app or activity, or a concert granting exclusive access to up and coming artists, brands are providing alternatives for their customers and it seems to be working.
This provides opportunities for retailers to consult with their retail interior design firm, to ensure that new designs include spaces for both traditional retail and the more conceptual zones that will allow customers to experience the brand’s ethos and personality. Creating interiors that are both multifunctional and adjustable will become the new challenge for designers in this field.
On the other hand, having a big budget and an impressive marketing team isn’t a prerequisite to make this new trend work for your brand. Smaller, independent retailers are finding the opportunity to define their personality online via social media, and creating relationships with customers, invaluable in carving out their own piece of the pie. Rather, these retailers start out on online platforms and as they gain traction, are able to move to a physical space in order to provide the person-to-person contact and speed and convenience customers still value.
Aligning your Brand with the New Shape of Retail.
While this new shift may seem threatening, with as many as 3,800 retailers set to close their doors by the end of the year in the US, this doesn’t mean a decline in retail. Companies aren’t going bust, so much as recognizing the value of investing in their online market. With 30% of Singaporeans using their mobiles to make online purchases – brick and mortar stores are not enough. In order to confidently stride into the future, brands will have to align themselves with various sales channels and get used to offering their customers more than a simple price and description of their products.
Retailers need a holistic approach; apps need to integrate with online sales portals, which need to speak to your social media presence with personality, and everything needs to be communicated in your physical store. Brick and mortar retail hasn’t been destroyed, just shaken up and Singapore interior design firms like Home Guide are ready to help retailers integrate these new and exciting changes.