An exciting new era of retail
Change and choice have reshaped the retail landscape. From the contraction of longstanding brands and malls to the impact of Amazon and social commerce, brands are being forced to quickly evolve. Ever-connected consumers are now comfortably in the driver’s seat and continue challenging tried-and-true practices.
Yet, retail is growing. Rising expectations of the connected consumer are actually dictating in-store experiences. The brick-and-mortar experience is still number one and its best features (like touching the product and instantly receiving purchases) haven’t been duplicated by the digital experience. In fact, consumers of all ages still enjoy shopping in store. Eighty-two percent of Millennials and 69% of Gen Xers believe it’s important for a brand to have physical store, and 75% of all generations want to see a product in store.
Retailers have an opportunity to rediscover the strengths and, more importantly, to exploit the unique attributes of physical stores. Consumers are seeking more than a digital experience alone can provide and retailers can meet those expectations by getting it right in every channel, especially in store. That’s why leading brands are re-evaluating their real-estate strategy, testing different formats, concepts, and models.
Navigating the new retail landscape
Retail will always be about the customer. However, it’s critical to truly understand today’s customers and create experiences that inspire them. Differentiation is critical in the new era of retail. It’s time for brands to make their move to exceed the customers’ in-store shopping expectations.
We’ve assessed the landscape, compiling several strategies gaining traction with trailblazing brands:
Immersive brand experiences: Using all aspects of their physical stores, retailers are uniquely positioned to create differentiation from their online competition. Tapping into those features provokes the senses and creates lasting brand impressions. It also produces vocal, engaged brand ambassadors who will extend reach through word of mouth, social sharing, and referrals. Loyal customers spend up to 10x more with brands than new customers.
Create a fun and thrilling environment: Brick-and-mortar brands are exploring new ways to interject the “fear of missing out” or “FOMO” into the experience. Gamification, word-of-mouth-only secret stores, pop-up stores, and “here today gone tomorrow” concepts are working. It’s a twist on the tried-and-true traffic-driving strategy with an unforgettable experience, product, or service. Nearly 60% of consumers are interested in special events and experiences hosted by retailers.
Empower brick-and-mobile: Shoppers demand quick and frictionless experiences everywhere they interact with brands—especially in store. Identified as a trend in Alliance Data’s 2018 Now, New, Next report, “Elevated Experiences Through Enhanced Technologies” details how brands are finding new ways to infuse technology with the in-store experience. Seventy-eight percent of consumers use their mobile phones to search for promotions and offers while in store.
Best of both worlds: Brands are testing new ways to merge the best of online and offline experiences. Tactile experiences, endless merchandise for purchase (beyond in-store inventory), and shipping/delivery options provide the best of both worlds. Brands can then capture in-the-moment sales and create a positive, convenient experience for customers and associates. Sixty-five percent of consumers say the ability to fulfill purchases beyond what is available in store is very or somewhat important.
Brick-and-mortar brands are also reinvesting in their associates, leveraging new mall concepts and tenants, and redefining their use of space in stores to better meet the needs of today’s customers. By disrupting the status quo, retailers are breaking through to satisfy even the most demanding customer expectations.
The retail landscape is shifting, and we believe it’s signaling a true transformation. These changes are providing retailers with incredible opportunities. It’s an exciting time as we turn the page to experience the next chapter in the brick-and-mortar retail story. Inspiring brands to evolve and transform, Alliance Data is poised to deliver next-level thinking, helping our brand partners maintain relevance, increase customer loyalty, and drive sales in this new era of retail.
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