[PYMNTS.com] RIP retail.
Or, maybe not. To paraphrase Mark Twain, a mustachioed author famous for quips and no small amount of wisdom, rumors of a demise have been greatly exaggerated.
Consider the case laid out by Skava, a cloud-based, microservices digital commerce platform. In a recent whitepaper, the firm noted that brick-and-mortar retailers face — and certainly feel — more pressure than ever to keep stores humming as centers of commerce. After all, over 90 percent of retail sales are still done in physical stores.
In a conversation with PYMNTS, Yuval Yatskan, VP of marketing for Skava, laid out the case that retail is evolving. “Evolution” implies the retail business model has been somewhere, is somewhere and is headed somewhere — not that it is not going away.
The misconception about evolution, according to Yuval Yatskan, is that people who say physical retail is dead make binary, myopic statements, which “[misread] the future direction of commerce as a whole and the essential role of brick-and-mortar stores.”
The largest competitor in the world of retail, especially for brick-and-mortar players of any scale, is Amazon. Where Amazon treads, retailers tremble. Trying to compete on price would bring retailers ever more directly into Amazon’s line of fire, while crippling the in-store customer experience. That experience still reflects a certain culture and an element of what Yatskan called “immersion.” Customers “still, to a very large degree, like to touch and feel and connect” with the products they may want to own someday, he told PYMNTS.
The advent of omnichannel seeks to serve customers wherever they are. If retailers put several pieces together — at scale, leveraging the desires of customers to connect to products and brands, and bringing the value of those brands across online tools and environments — this is a strategy that can yield strong results, Yatskan advised.
Asked whether there could be a target model through which a certain percentage of sales would be derived online and the rest in-store, with a decreasing reliance on the latter, Yatskan said there is no “sole” number that can be used to gauge a target model. In fact, it is hard for many retailers to know just where the split between in-store and digital commerce lies these days. After all, transactions can now occur online but be picked up at a brick-and-mortar location.
Against this backdrop, companies must wrestle with where to invest time and money and how to best serve the omnichannel customer. As Yatskan said, it costs more to serve the omnichannel customer than to cater to the experiences of what might be regarded as “pure” online or in-store customers.
Retailers must ask themselves what their brands represent and how that representation is best served in-store and online, said the executive. Some firms operate as part of the fabric of the community, offering activities that are part of the experience within brick-and-mortar settings.
The in-store experience, Yatskan said, can become an influencer to then go online and transact. To illustrate this point, he gave the example of a retailer selling sports equipment and apparel. Customers can look up yoga-related items online or browse them in-store, but they can do that anywhere, for any brand. A retailer that establishes itself with fun, on-location experiences — with yoga lessons, for example — can prompt people to become loyal shoppers, having fostered an identity and gained consumers’ trust.
“There’s something very basic in human nature,” Yatskan told PYMNTS, something that wants interaction. Thus, there are some things that eCommerce platforms like Amazon simply cannot deliver.
Digitally rebooting the store, as Skava envisions it, means the combination of human sales associates and technology should be among the most powerful elements of the in-store experience. A blueprint to make the brick-and-mortar experience truly robust is not simply a matter of investing in technology, he told PYMNTS, but also considering the value of the aforementioned immersive experience.
“Technology is a means to an end,” said Yatskan, emphasizing that retailers must always be cognizant of that fact. The end goal, he said, is turning store associates into brand experts, armed and aided with technology. “When [customers] come, they can see — face-to-face and firsthand — the experience that the brand can deliver.”
This may entail thinking about the brand, educating employees on its value proposition and thenadopting technology — in that order. Take TOMS Shoes, as an example from the Skava whitepaper. TOMS first started in eCommerce, then began entrenching itself in the community through coffee shops that fostered relaxed browsing experiences. Part of the in-store interaction could be an associate showing customers how buying a pair of shoes also donates water to people in need. That kind of physical interaction showcases the charitable impact that can be tied to digital commerce. A consumer might not know such details unless he sought them out himself, and a proactive approach on the part of the company can make all the difference.
Yatskan said technology can be helpful in making the same types of personalized differences to a consumer. It can track a customer’s color preferences and recommend tailored suggestions based on those inclinations.
According to Yatskan, the relationship becomes one in which a customer might surmise the associate and brand “knows more about me than I know myself, without being creepy.” Customers might feel more at ease sharing data beyond telephone numbers and other information if they knew why it was being used, such as to keep them informed about new shipments of merchandise or special offers. In the end, Yatskan said, the retailer shows it does care and wants the customer to have a great experience with its brand.
Technology and immersive experiences also have other benefits. All retailers gain a boost from loyal employees. If a customer comes to a store and sees its employees are happy, the whole in-store experience becomes a bit more intriguing, Yatskan explained. And, of course, there are then boosts to the bottom line, and likely lower costs tied to training and turnover.
A Harris Interactive study found 88 percent of customers prefer to do business with companies offering quality service versus one offering innovation and cutting-edge products — and only a minority of shoppers say expectations are met, according to Yatskan.
“Experience is king,” he said. “It’s not really about price.”
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