Rethinking Store Location Strategies is Key to Success in Accelerated, Omnichannel Consumer World
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“The COVID-19 pandemic forced retailers to quickly shift their operations to online and multi-channel options in order to survive. Yet one thing retail leaders can agree on — especially with more of the population getting vaccinated and businesses resuming operations — the brick and mortar store is not going anywhere,” said Pranav Tyagi, Tango’s President and CEO who gave the summit’s keynote address on The Future of Brick and Mortar Retail. “Retail strategies may be changing to accommodate greater omnichannel experiences, but it is clear that the physical store is the foundation of a successful retailer and technology will continue to play a huge role in bringing the two together to create a seamless consumer experience.”
During the summit, experts shared insights, trends, impacts, and strategies across the entire retail real estate and facilities lifecycle including understanding the post-COVID consumer, changing store formats and location strategies, updates to facility maintenance protocols, new lease administration and accounting best practices, and how innovation and technology are at the forefront of all these changes.
Key Learnings from Tango’s Location is Everything Summit:
Balancing in-store and online customers in the omnichannel retail environment:
- With the acceleration of e-commerce and the rise of omnichannel retail, online and offline shoppers are now competing for the attention of in-store sales associates. A customer that places a grocery order for curbside pickup wants to get their items at the specified pickup time, while simultaneously an in-store shopper wants the immediate assistance of the in-store employee when they can’t find an item they are looking for. Employees are often now serving dual-purposes – working the floor to assist customers and fielding pickup orders – but the customer in the store is always going to demand the most attention at any given time. Retailers need to be cognizant of these potential conflicts between employees and the online/offline customer and ensure that a customer’s in-store experience isn’t ruined by the omnichannel rush.
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Balancing friction in the brick and mortar retail experience:
- Consumers have always valued speed and efficiency, but there are now additional values that became more apparent for shoppers during the pandemic, such as convenience and cleanliness. Retailers should be considering the ways in which technology can advance frictionless experiences to help get consumers in and out of the store faster (e.g., touchless payment systems or contactless pickup), but they should not outright abandon the idea of adding friction to certain aspects of the shopping experience. For example, brands like IKEA and West Elm have created “ultimate consumer experiences” through workshops and pajama parties to entice customers to experience products first-hand while in the store. Removing all interaction from a store can take away the valuable human shopping experience. Retailers should evaluate where within their stores it makes more sense for a customer to have a frictionless experience and where the customer might benefit from more interactions with the store environment, products, and employees.
The changing role of the store associate:
- In response to the recent changes in customers’ shopping habits, retailers are beginning to look at their workforce differently. Retailers have tracked several major behavioral shifts for customers during the past year, including increased deliveries, curbside pickup, off-premise shopping, shopping hours, and an increase in the volume of transactions. To respond to these trends, retailers will need to ensure their associates can handle the expectations of the new customer. This could mean retraining associates, shifting employees into new roles, or even establishing new positions focused on alternate delivery methods.
Lease decisions in a holding pattern, data analytics essential moving forward:
- Even as more U.S. consumers become vaccinated and return to in-store shopping, most brands are in a “wait and see” mode when it comes to re-evaluating and renewing leases. Not only did the retail industry see a giant shift in online ordering and curbside pickup, but there was also a big migration of consumer purchasing at stores outside of metropolitan areas due to businesses’ “work from home” policies. Flagship or anchor store locations are no longer as important as a location that’s heavily populated with higher foot traffic. Retailers, especially large chains, should be judicious with their portfolio strategies, including the downsizing and rightsizing of stores based on consumer spending patterns. Having access to data analytics on these consumer behaviors will be essential to making intelligent decisions in the short-term as well as in the future around the positioning of locations.
Not every retail space should be treated equally; the importance of cohesive technology solutions to guide retailers through the real estate lifecycle:
- Retailers have gone to tremendous lengths to connect the digital and in-store experience since the pandemic, however there is still an opportunity to make processes and solutions more efficient and at scale. Retail executives are looking for ways to leverage their space more efficiently and provide their teams with tools to understand the different customer journeys and how they impact profit margins. Some stores may offer pickup or curbside options, while others may be used for fulfillment only. Adopting more sophisticated technology tools to track consumer journeys and demands at different locations will help retailers determine which stores make the most sense to house the right offerings.