Innovating for agile retail: The Drum Live

by Foolproof

I had recently attended The Drum Live where all participants contributed to a 56-page issue created within an 8 hour day.

The Drum’s editorial team invited vendor and client-side leaders to speak on topics which included retail service design and social platform strategy.

’Customer-centred design’ and ’omnichannel’ – were among the buzzwords, which echo throughout client briefs, pitches and industry headlines. I joined a session where stakeholders speaking from Diesel, Universal Records and The 02 expressed their desire and need to innovate in both digital and physical spaces.

Here are my reflections following the event on the innovation and optimisation of physical retail in the age of the digital consumer.

+1 human interaction

Pablo Sueiras, Head of Retail at Diesel, reminded the group that people go into stores for human interaction, to experience a brand. With the ease of shopping online, browsing digital aisles is a commodity that can fill up periods of our day. However, the decision to go to a store ranges between it being utility and an event for shoppers.

Knowing the threshold at which a user makes the choice to shop as an event over any other activity (such as going to the cinema) can help differentiate the brand experience created in-store. Think of the last memorable in-store experience you had. What elements of that experience made it less “shopping” and more of an emotional, lifestyle experience? Was it the J.Crew personal stylist that reduced the stress around you choosing your suit and tie for your friend’s wedding? Or was it perhaps the IKEA employee that helped you measure for your new kitchen after you dropped your twins off at the crèche?

Technology does however have a place in-store. As Burberry has shown, it can heighten the senses, aid cross-sale and build customer affinity for the brand. From an operational perspective, Kate Spade has used iPads to create point of sale anywhere in-store and manage inventory in a much smarter way. Additionally, allowing customers to browse additional stock does increase “dwell-time” in their shops which, although small, are being engineered to maximise efficiency.

Social is also popping up in places like Nordstrom, where top pinned items on Pinterest are at the forefront of their merchandising strategy – no gadgets required. In the future, this data may even influence the buying team’s strategy, leading to internal optimisation from social data collection. I’m looking forward to the results of the 3 month trial at 13 of Nordstrom’s locations.

Moving from managing a store to managing a contextual customer experience means constant optimisation, but physical retail isn’t a web property where arguably this is an easier practice. And the variables are many: multiple locations, merchandising strategy, long leases, transient staff and supply chain management.

How do we create agile retail?

That was a question I posed to Sueiras, who responded with a prediction for bricks and mortar shops everywhere; fewer, bigger, better. Brands must create select temples for their products and services, which turn into the ultimate customer experience for that brand. But this process does take time when you consider long leases at many locations, as well as the potential for jobs to be lost with the reduction of stores. It can also mean more responsibility for sales employees as brand ambassadors and a need for more competitive, skilled retail force.

Alternatively, Sueiras suggested that brands embrace the pop-up store, which is a channel that isn’t often considered by brands. Boxpark in Shoreditch not only gives customers a constantly changing high street, but is a petri dish of rapid retail prototyping. Nike has used their shipping container space as a way to test out the only Nike + Fuel Band shop in Europe, while XBOX and Microsoft have recently teamed up here to launch their only GAME store previewing new hardware and games to come.

Kate Spade has embraced this type of non-traditional retail approach with their Saturday test shops across NYC, where you literally window shop. After deciding which product in the window you’d like, you choose the item on the kiosk, check-out with PayPal and receive your item in under an hour. Talk about swift fulfilment.

Each part of the omnichannel experience needs the other, but the first step to success here is to understand the context of use for each channel and the needs it meets for users. As customers become savvier, retailers must offer differentiating experiences to de-commoditise a website, a store and the idea of what a purchase is.

What do you think?