If you missed NRF 2019, here’s what you need know about what’s next for the retail industry.
Industry leaders gathered in New York to answer the age-old question of what’s next for the retail industry. The focus of NRF 2019 was transformation. Two key themes came to the fore; the evolving role of bricks-and-mortar and the unabating importance of customer experience.
Big box stores becoming commerce pick up locations
We saw several big box brands step up their pick up services last year. Target successfully established fulfilment centres in stores to increase commerce capabilities. In-store pick up of online purchases was up 60 per cent YOY. (Digiday, 2019) Meanwhile, Walmart is investing in Click & Collect lockers for its US stores and Asda outlets in the UK. NRF 2019 revealed that 70 per cent of customers who are aware of online purchase and in-store pick up services had tried them. Ultimately, customers want free delivery, but will choose in-store pick up to avoid a charge. (NRF, 2019) Big box retailers have the opportunity to think differently about their retail footprint, placing a new emphasis on playing a helpful role in the community. For customers that are unable to wait at home for delivery, in-store collection can be a convenient solution. It’s also a win for the brand, as it evolves an online transaction into a personal interaction.
Traditional retailers forming smart partnerships
It’s no secret that customers’ lives, and consequently their shopping behaviours, are changing. Legacy retailers employing exclusively tried and tested methods need to get serious about innovation in order to stay relevant. At NRF 2019 Walgreens Boots Alliance Co-COO Alex Gourlay discussed the importance of partnerships for the brand. Thanks to the Walgreens x Birchbox collaboration, Walgreens customers have access to increased ranges of both independent and premium beauty brands in store and online. Moreover, the in-store Build Your Own Birchbox customisation stations give the digital beauty brand a physical presence and act as a footfall driver for Walgreens; a win-win partnership for both brands and the customer.
Digital Native Brands investing in Bricks and Mortar
With Millennials going online to seek out quality products at an affordable price point, 2018 saw a continued influx of digital native brands delivering these products direct to the customer. These digital native brands continue to move into bricks-and mortar spaces, with fresh ideas about the role of physical retail. At NRF 2019, Allbirds Co-Founder and Co-CEO Tim Brown spoke about the brand’s bricks-and-mortar strategy. For Allbirds, the focus of bricks-and-mortar retail is building a deep relationships with customer. This was a natural decision for the brand, given that customer wants to try on shoes in person. Agile start-ups have an advantage over legacy retailers; they are leaner and can move quickly to adapt to new customer expectations. The opportunity is to partner with experts to learn the aspects of retail they don’t have the years of data collection to cover.
Brands building emotional relationships with customers
When it comes to bricks and mortar experience, building an emotional experience is key. Jill Standish, head of retail for Acenture summed it up at NRF when she said, “retailers should stop being shopkeepers and start being customer keepers.” NRF data revealed that exclusive previews and events, brand experts and product demonstrations are the experiences that generate the most interest in visiting stores. New York concept store STORY thinks of the store as a media channel, constantly reinventing itself with a stream of new content. Constantly updating content creates a reason for customers to return, and builds a consistent and ongoing relationship between a brand and its customers.
Translating customer experience into employee experience
A key theme for Household this year has been translating customer experience into employee experience. We worked with The White Company and Kier to create 360 brand experiences that focus on employee engagement. At NRF 2019, Dicks Sporting Goods Chairman and CEO Ed Stack spoke about how the importance of internal brand culture for them, from encouraging work life balance and company community service to funding high school athletic programs. With the growing wellness trend, there is a greater need to provide good service to employees. Brands should foster an internal environment that embodies the brand, to inspire employees and attract the best talent.
Through 2019, we will see the role of bricks-and-mortar retail continue to evolve, with an emphasis on relationships at the heart. Whether focused on community building, partnering with other brands and experts, or aligning customer and employee experience, the ultimate goal is to create authentic and emotive brand experiences that extend the relationship beyond a single transaction.