The internet has become the destination of choice for many consumers, amounting pressure on traditional brick-and-mortar stores that are struggling to compete with online rivals. While store sales are stagnating, online sales grew by 15% last year. To survive, retail stores are having to find ways to entice customers back to the high street and away from their computer screens.
Technology is being introduced to provide customised shopping experiences
Retailers are beginning to introduce technology designed to make the shopping experience more enjoyable. Fitting rooms equipped with photobooths and digital mannequin displays are becoming commonplace, although these are more likely to drive PR and brand awareness than actual sales, with customers using the technology for social media purposes.
However, Farfetch’s London-based Store Of The Future has been working on a tech-powered retail experience that aims to enhance and simplify the shopping experience. According to Farfetch founder José Neves, the technologically advanced store aims to “link the online and offline worlds, using data to enhance the retail experience”. It works by monitoring the shopping habits of consumers using RFID technology, and then offers suggested items using a digital mirror.
The company also showed off a holographic display to enable customers to build and order their own custom shoes. Customers will be able to experiment with different materials and colours to create their own shoe, before placing an order in-store. The Store Of The Future is still in beta, however is set to launch this autumn in London boutique, Browns.
Retailers are reconsidering the customer’s journey
Millennials behave in an entirely different way to baby boomers. They value experiences over physical purchases, which of course does not exactly work in the retailer’s favour. But millennials are also heavily influenced by “FOMO” – the fear of missing out – and some brands have used this to their advantage.
Through pop-up shops, retailers are able to create ephemeral experiences that are more likely to appeal to the millennial generation. According to a report on Britain’s Pop-Up Retail Economy by EE, the pop-up industry is estimated to be worth £2.3 billion in the UK, which accounts for about 0.76% of the total retail turnover.
Taking the concept a step further, some brands are creating pop-ups in unorthodox locations, bringing the store to the customer rather than the customer to the store. For example, Hiroshi Fujiwara’s concept retail space, The Park-Ing, was situated in an underground parking lot in Ginza, Tokyo, making it both the first and last stop for shoppers. The space was home to a number of pop-up stores including brands Nike, Denim By and Vanquish.
Customers are more inclined to try before they buy
There is still one thing brick-and-mortars have that online stores do not – the ability to physically try on new clothes or test new items before buying. Of course, free returns on apparel purchases makes this less of a problem when buying clothing online, but for items such as electronics this can be difficult and inconvenient.
Retailers are all too aware of this, hence the rise of try-before-you-buy electronic stores, that give customers the chance to really test items before spending their hard earned cash. Dyson launched its ‘Dyson Demo’ store on London’s Oxford Street, which showcased all of the brand’s technology, and allowed customers to sample the new range of Dyson hairdryers. Customers were allowed to book a styling demonstration at the in-store salon to see how the product worked, as well as learn more about how to use it before making their purchase.
Retailers are considering customer values even more
Ethical commerce is on the rise with millennial shoppers. A MediaCom study from earlier this year found that of 2,000 consumers polled, half were willing to pay more for a brand that supports causes important to them. Furthermore, 63% said that brands have a responsibility to give back to society, while a further 80% of respondents said companies should be actively taking steps to minimise their impact on the environment.
Swedish flat-pack gurus IKEA have cottoned on to this and are launching an environmentally friendly store based in London’s Greenwich. The sustainable concept will include green elements, such as a biodiverse roof pavilion and community garden. The budget-friendly retailer will also be energy and resource efficient through the use of solar panels, rainwater harvesting panels and other energy saving initiatives.