The Evolution of Retailtainment: The Face of Retail Real Estate is Changing

With hundreds of stores and malls putting down their shutters, 2017 is certainly a bit of a setback. Whether it’s big names like JC Penney, Macy’s and Sears announcing store closures and numerous other like Payless and Rue 21 filing for bankruptcy, this situation is being coined as the great retail apocalypse of 2017. Retail may be having a meltdown at the moment but at the same time, this does not mean that retailers are going to shy away from brick and mortar. According to EKN’s research on The Changing Role of the Store – Is Your Workforce Ready, by 2020, traditional sales processes will reduce in importance in terms of what retailers expect from stores. At the top will be theme-based stores, fulfilment centers and pop-ups. With disruptive changes occurring in the retail industry, retailers and its workforce need to prepare for and embrace evolving retail formats and technologies to offer customers a unique and frictionless shopping experience. FTI Consulting’s 2016 Retail Outlook Report, shows that 63% of shoppers still prefer to touch and experience the product. Thus, a vast number of shoppers still prefer shopping in stores and online shopping cannot replace the allure of the shopping mall. So, what are retailers and developers doing to attract more shoppers to malls? Retailtainment is the answer. Retailtainment is the concept of adding entertainment and experiences to the retail mix. This trend started a while ago since malls started adding typical forms of entertainment and leisure activities, like gaming arcades, bowling alleys, and movie theatres to that attract consumers. Today, entertainment concepts have evolved beyond the movie theater and...

A New Buying Journey, Future of Retail and Digital Workforce

Why be wary of online when you can create a differentiated experience in the store with a high focus on personalization through technology and human intervention? Creating a personalized customer experience is not a function of implementing a new retail concept, multi-segment marketing or technology or workforce improvement alone. It requires retailers to adopt a differentiated customer experience strategy especially in their stores. In many instances, retailers don’t have the luxury of time or resources to focus on upgrading the complete end-to-end customer experience and related workforce-led assistance in the stores for infusing personalization at a customer-level. This is when technology becomes even more powerful and meaningful in the retail industry. Several retailers who are willing to experiment and innovate are experiencing the power of artificial intelligence, augmented and virtual reality and the Internet of Things (IoT) as these tools have emerged as a stepping stones for personalizing each step in the buying journey. Consequently, these technologies cannot operate in isolation. The role of workforce has become more important in making this journey successful. ‘The demise of the store obituary’ notwithstanding, forward looking retail stores are now moving to a highly progressive digital mode. The retail store itself is being re-imagined for today’s digital consumer. New store concepts must function as an immersive experiential center and will be a venue for collaboration and experiences that cannot be provided online. According to EKN’s research on The Changing Role of the Store – Is Your Workforce Ready, by 2020, traditional sales processes will reduce in importance in terms of what retailers expect from stores. At the top will be theme-based stores,...

Is Digital Transformation working in the Path-To-Purchase Journey? – Part 2

In our previous blog post, we spoke about the digital disruption of the path-to-purchase journey and how technology is affecting the way in which retailers operate, allowing customers to interact online, in-store, in-app, on-phone, in the cloud and via social media. However, the surprising fact is that in spite of the omni-channel retail experience being the strategic focus for many retailers, a large percentage of shoppers – particularly women and millennials still want an in-store experience. This is because women view shopping as a leisure activity for the purpose of entertainment and fulfillment besides need and utility, while millennial consumers want a touch-and-feel experience while they shop along with an equal affinity towards digital. EKN data shows that 75% millennials shop online and two-thirds shop in-store at least once per month. This shows that both digital and in-store affinity is prevalent among millennials. EKN’s Framework for Omni-channel Personalization data shows that 86 percent of consumers will pay up to 25 percent more for a better customer experience. But are retailers adopting the right measures to enrich the shopping experience for customers? Fortunately, the amalgamation of retail and technology has been an effective and positive one, and retailers are integrating innovative digital experiences at their physical outlets with the presence of digitized kiosks, touch screen navigation panels, interactive digital displays and other digital tools to ensure an engaging in-store experience. According to a survey carried out by Samsung, 94 percent of retailers believe the customer of the future will be driven by technology and 41 percent are already using it to implement a strategy to enhance the customer experience to...

Is Digital Transformation working in the Path-To-Purchase Journey? – Part 1

It is a well known fact that the emergence of online shopping has drastically changed the way we shop and besides brick and mortal stores, online shopping plays a very important role for every brand. But, is digital transformation based on what customers expect from companies or is it based on a tunnel vision of re-producing experiences that may not be relevant to the core customer base? EKN’s 2016 Profitable Omnichannel execution data indicates that only a third of retailers ‘occasionally” consider the customer perspective in devising omnichannel strategies. In today’s digitally connected age, it is a well-established fact that the internet has become an essential part of the path-to-purchase process irrespective of whether the purchase is made online or in a store. Social media is a large influencing factor for customers to make a purchase. From traditional modes of marketing and advertising on television, radio and print media, the path-to-purchase process has now undergone a digital disruption. Such a process often relies on pre-shopping activities like searching for products online, reading their reviews on blogs, forums and shopping websites and comparing them with other products available. The actual shopping transaction may be in store or via online shopping and the post-shopping activity consists of word-of-mouth recommendations, online reviews and social media posts. Thus, the process of buying has now become a merger of various online and offline activities. Shoppers can be categorized into three segments – ones who prefer shopping in physical stores, ones who prefer shopping online and ones that prefer shopping on both channels. Thus, retailers need to keep all three types of customers in mind....

2016 Wrap-Up & 2017 Retail Industry Outlook

While 2016 was a pretty good year for US retail, for most retailers a repeat of 2016 growth will be not be easy replicate in 2017. After all, it is a transition year and as new economic and fiscal policies get activated, some amount of business and consumer spending uncertainty is expected. The good news is that a relatively healthy GDP over the last couple of quarters and a largely stable housing market certainly bodes well for retailers early in the year. The key for retailers is to make sure that they absorb the policy change impact in the front half of the year without inflicting too much self-damage. Registering a bumper back half of the year through faster consolidation and slick execution is a must i.e. a robust Q3 & Q4 growth plan through proper customer segmentation, new product introduction and sound execution plans. Humbly stated, my own fiscal round-up for US retail in 2016 indicates medium to strong fundamentals across a majority of retail concepts or segments. According to U.S. Census Bureau’s latest reported retail sales data total US retail sales from September 2016 through November 2016 were up 3.7 percent from the same period a year ago. The 11-month non-adjusted total retail and food services sales were up 3.1 percent from the same period a year ago. While electronic, gasoline, general merchandise and department stores showed clear signs of a sizeable slump in comp sales; other store retailers including DIY/building materials, drug, and furniture reported healthy positive sales comps when compared to 2015. As expected, within the eCommerce channel, retailers saw the biggest gains as the...

Improving Store Labor Standards: A Key Ingredient for Successful Store Execution

While the chorus around omnichannel and digital commerce’s growing impact and the need to transform stores becomes louder every day, retailers need to account for how these changes affect the work associates perform and the store’s labor budget. The reality is that a majority of retailers are unsure of how to upgrade labor standards and labor hours for maximizing store productivity and ensuring smooth operations. Labor standards are defined as the average amount of time it takes for store associates and managers to complete customer service, sales and operational tasks in the store. Retailers use a varied set of sales, customer service and operational labor standards for day-to-day store execution. In order to achieve consistent store execution, retailers need to ensure that all these standards are always in line with constantly evolving customer expectations, labor regulations and related store labor policies/procedures. Effective labor standards and related standard operating procedures (SOPs) in the stores include accurate labor planning for all tasks, performance evaluation, insights for operational improvements and cost minimization and above all documentation of the best methods. EKN recently conducted a survey of 63 US retailers and spoke to several softlines and hardlines retail executives to understand their viewpoint on this key retail store execution area. The general consensus is that labor standards are not well documented or updated effectively within the retail organization. In fact, nearly two-thirds of retailers (64%) update labor standards and labor hour models infrequently- range from quarterly, annual or on an ad-hoc basis. Another major business pain that retailers are experiencing is the lack of proper organizational management and consensus on issues related to...