Retail

What It Takes to Win In Retail Today

The top trends driving retail store growth in 2019

Retail Store Tours – has discovered the top trends affecting retail in 2019. Founder & CEO Dan Hodges said, “in curating hundreds of stores and retail formats in the last year we discovered the winning factors in retail today, including employee training, retail environment, use of technology, business model, store design, customer management, brand story, unique concept, the human touch and change.” Here is a summary of our findings.

The Human Touch: Apple Stores hires sales associates based on their kindness and evaluates them based on customer empathy. Microsoft retail hires sales associates who are both entertaining and informative. It is noteworthy that two of the leading technology retailers are focused on the human touch as a business strategy.

Use of Technology: Customer engagement technology that interacts with shoppers in-store is a winning play. Sephora’s Color IQ allows a shopper to select make-up while looking at themselves with Color IQ in-store. Apple’s sales associates use customer management software that increases responsiveness to customers, resulting in satisfaction and more time in the store. Sales Associates who are knowledgeable in product and empathetic to customers are the winning in retail stores today.

Employee Training: Apple, Sephora, Tiffany and other leading retailers are constantly training their employees to update their product knowledge and people skills. They use a combination of daily questions and formalized classroom training.

Business Model: Companies focused on personalization and customization are winning in the marketplace. Two examples are Bonobos, which is an in-store showroom where men are helped to select clothes with in-store stylist and Untucket which is a business where the shoppers are styled and sized in the store using a number of pre-sized shirts.

Store Design: The Apple store design features a minimalist approach which is a highly engaging environment. The Ray-Ban store is a multi-experience store where you can have your eyes examined and select a custom frame personalized to your taste. The Sonos store uses sound and environment to create an immersive sound experience. Sephora uses the store experience augmented by technology which is integrated into the store design.

Customer Management: All tier one stores have store associates who use the personal touch combined with technical tools to engage and co-create the shopping experience. Aldo uses technology to connect the front-end sales associate tools with the back-end inventory. Aldo utilizes in-store technology where customers can engage directly with the products in the store and curate the styles and inventory themselves.

Brand Story: All winning retail stores have a unique brand DNA story that was born out of a market need or a visionary founder. Tiffany, Sugarfina, Untucket, B8TA, Warby Parker, All Birds, Amazon are some examples of the many brands that have a unique reason for being.

Unique Value Proposition: The Real Real, B8ta, Everlane, Alo Yoga, Brooklinen, 3×1 and The Apartment are all distinctive offerings with a unique concept and focused purpose. These stores offer unique products and buying experiences not found elsewhere.

Change: Retailers built to capitalize on rapidly changing consumer behaviors and trends are winners. The future belongs to the fast movers and their ability to adapt their business models. Story is an example of a store that changes its entire product offerings many times during the year. Nike’s Flagship store is another example where customers can buy online and pick-up in store in their own, secure locker. This allows the shoppers to grab and go.

Welcome to the Co-Creative Retail Experience Economy

The National Retail Federation projects that 2018 spending at retail is expected to be 4.5% over last year which is reason to be optimistic. Is the growth coming from consumers who are returning to brick and mortar stores or consumers buying more online? The answer is a resounding yes but what in retail is driving this growth?

This past year we visited hundreds of stores in the United States and Europe as part of our Retail Store Tours program and found many examples of why some retail businesses are booming.

Apple, Sephora, Eataly, Fredric Malle, Tiffany, Suit Supply, Mont Blanc and hundreds of others had one common trait, a uniquely personal experience informed by sales associates and augmented by technology.

Joseph Pine and James Gilmore wrote in their book The Experience Economy, that “experiences are a distinct economic offering, as different from services as services are from goods.” The book written in the late 1990’s did not consider the role of smartphone or digital commerce as Amazon at the time was a four-year-old company. The rise of digital and the always on economy have created an intersection where meaningful retail experiences drive sales.

Jeremy Duimstra (Co-Founder and CEO, MJD Interactive) and I will be discussing this at the NRF 2019 Retail’s Big Show will feature the “Co-Creative Economy: How Successful Brands Use Technology to Drive Sales.”

We know that all retailers know the value of a good narrative. However, the most successful retailers are taking their narratives to the next level by embracing the “Co-Creative Economy” – the deployment of innovative technology that profitably enables unique collaborations between customers and store sales associates within the framework of a brands core promise. We will discuss how brands like the Container Store, Apple, Levi Strauss, Sephora spur sales by elevating the in-store experience with experiential technology.