Clicks to bricks: Customer experience insights from ShopTalk 2019
Mar 20, 2019
Last month QICGRE joined the biggest names in retail and technology at the annual ShopTalk conference in Las Vegas to exchange ideas about the next frontier of customer experience. Here, we share five takeaways about what successful retailing looks like in the not-so-distant future and the disappearing border between online and offline.

Omnichannel retail strategy came of age at this year’s ShopTalk conference, with both legacy retailers and e-commerce experts providing sophisticated case studies on the benefits of brands integrating their online and offline customer experiences. Particularly notable was the number of digitally native retailers investing in bricks-and-mortar this past year in a bid to extend the experience for mobile-empowered shoppers while building brand credibility in a cost-effective way. The diversifying function of the physical storefront and the question of how we measure the success of a space also emerged as key focus points for industry leaders ranging from Walmart to Nordstrom. The following is a snapshot of insights gleaned during the four-day event touching on next-generation retail experiences, digital transformation, consumer behaviour trends and new store performance metrics.

Digital natives seek the power of the physical store

With online customer acquisition costs increasing and around 85 per cent of retail transactions still taking place offline it is hardly surprising that digitally native vertical brands are exploring the potential of a physical footprint. From apparel specialists such as Bonobos, Everlane and Showpo to cosmetics giant Glossier, exercise phenomenon Peloton and mattress business Casper, the roll call of e-commerce names turning to physical retail to augment their following is a rapidly growing one. The fresh approach that these algorithm-driven businesses often bring to retail space is inspiring new store formats, designs and leasing options too.Of the many immersive retail examples presented at the conference, standouts included the Greats sneaker showroom designed as a gathering place for fans of the e-commerce brand to learn about exclusive products and meet designers, and the Buzzfeed-backed Camp, a toy store containing a ‘secret’ door to a summer camp-styled activity space. Of course, the loyalty-boosting power of experiential retail is hardly news to incumbents such as Mattel, whose American Girl stores set the benchmark in the 1990s. Company president Richard Dickson flagged the role of non-shoppable content in driving customer engagement when he detailed the toy manufacturer’s plans to develop everything from gaming apps to a movie starring Margot Robbie as Barbie.

One leading US mall operator has responded to the demand from digital-first retailers for low-risk, turnkey solutions by developing prefabricated units equipped with plug-and-play technology for everything from security tagging to foot traffic measurement. With early tenants reporting an uplift in online orders placed within 10 miles (16 kilometres) of the mall as high as 350 per cent after a single month, it goes without saying that some have already entered into long-term lease negotiations. The success of this and other retail solutions designed to accommodate emerging brands, such as The Carousel at Bloomingdale’s or The Arcade at Eastland, suggests this new tier of pop-up will play a key role in the modern shopping centre.

Legacy brands are turning platform agnostic too

Eric Nordstrom reiterated the impossibility of splitting the customer journey into online and offline components when he detailed the philosophy of the new inventory-free Nordstrom Local showrooms. These omnichannel retail hubs hinge on the chain’s popular ‘reserve online, try in-store’ service and place as much importance on facilitating frictionless returns as a traditional store would on purchases. Total customer interactions and satisfaction levels are increasing as a result, plus there is the benefit of getting returned stock back into circulation faster. Services such as tailoring and styling are also offered depending on the most searched-for services in a locality with the aim of boosting customer loyalty in the way that only in-person interaction can.

The team from Macy’s, meanwhile, explained how they have shifted in mindset to think of the smartphone app as shopfront. As part of an organisation-wide effort to apply learnings about the mobile shopper on the shop floor, Macy’s recently installed an interactive display in fragrance departments to help customers search by scent family as opposed to brand; the same way they do online.

Stores as service centres require a shift in performance metrics

Consumer demand for click-and-collect and ship-from-store services was a hot topic throughout ShopTalk, with in-store fulfilment of online orders reported to be rising 40 per cent year-on-year in the US.One of the red flags raised was the stress that is placed on particular stores, and the inaccurate reporting that can arise, when items ordered online are returned in-store. From certain stores being incorrectly labelled as failures due to the number of returns they are processing to inventory ending up in the wrong place at the wrong time, necessitating price markdowns, the challenge is a significant one for the industry.

Doug Gardner, chief information officer at River Island, outlined how relying solely on traditional store metrics such as average transaction value does not cut it in today's market. Sales figures alone would have led the high street chain to close one of its most highly rated stores for customer satisfaction purely because it happened to be in a convenient location to process returns of e-commerce purchases. By reframing performance metrics to account for sites that serve a strategic purpose, such as brand storytelling or e-commerce fulfilment, retailers and landlords can obtain a far more accurate picture of their productivity.

Logistics startups such as Fillogic, meanwhile, made the case for shopping centres to act as distribution centres for independent retailers by converting non-selling spaces into micro-hubs for freight consolidation and delivery.

Omnichannel retail hubs place as much importance on facilitating frictionless returns as a traditional store does on purchases.
Actionable data is king
How to obtain a unified view of your customer, efficiently act on the data you collect and simultaneously build consumer trust was naturally high on the ShopTalk agenda. In particular, the ethical implications of using facial recognition to measure shopper satisfaction levels, tailor digital merchandising and record the dwell time of individual customers, was much discussed.Nike executives provided impressive examples of how digital information can deliver wins in the physical world, with data from the brand’s Run Club app being used to inform new store locations and inventory. The question was not whether we can but whether we should use behavioural data at a more granular level, to give a sales assistant instant access to a visitor’s browsing history across all channels for example. While consumers are currently wary of brand integrity in matters of data privacy, not many people would complain if they stopped being served an online advert for an item they have already purchased in a physical store.James Crawford, founder of geospatial analytics firm Orbital Insight, explained how anonymous mobile phone GPS data and satellite imagery is already being used to monitor the flow of foot and car traffic in and around shopping centres to help identify potential issues and opportunities. As we all become more data literate, the challenge for retail asset managers is to lead the way in the aggregation and optimisation of this information.
The searchable shopping destination is here

One of the most significant propositions for stakeholders in retail and leisure destinations is the capability of Google Lens image recognition, and associated technologies, to enhance the live shopping experience.Daniel Alegre, president of retail, shopping and payments at Google, highlighted the role of real-time inventory availability information in driving store visitation. He detailed how visitors who agree to Google-powered personalisation within a mapped shopping centre could receive a smartphone notification upon entry flagging availability of products they have previously researched online is in stock at a particular store. This same data could be used, privacy laws permitting, to notify sales assistants that a pre-identified customer has Googled a garment, prompting  them to encourage the customer to try it on.The blurring of the line between clicks and bricks was reiterated by a number of unmanned store concepts unveiled at the conference. DeepMagic operates vending machine-style units that automatically charge the credit card of a purchaser when they exit the micro-store, for example, while Rapitag enables self-checkout on the spot via a smartphone app and theft-proof product tags


QICGRE is in regular conversation with thought leaders from around the world. Read our recent Business of Fashion conference coverage for more insights on next-generation retail.