The Death of Traditional Retail (Podcast 102)
Brick and Mortar stores have been through a hard time lately and will have to adapt to survive. Understanding the consumer and focusing more on delivering an experience will be key for continued survival. In this episode, we explore the changes to traditional retail and the new relationship between customers and brands, and how technology is leading innovation.
Highlights:
- There will be a much stronger focus on creating a multifaceted and meaningful customer experience
- Brand loyalty is much harder to sustain with so much choice - creating a relationship with the customer base can help
- Streamlined shopping experiences, cashless retail, and multi-use stores will become the norm. Think store, restaurant and distribution, all in one!
2020 was an incredibly tough year for the world, for the healthcare systems, supply chains and businesses around the world. It was an especially tough year for Brick & Mortar stores. Forced to close for the best part of the pandemic, businesses were forced to adapt.
Some stores opted to bolster their online presence and add in no contact or delivery services. In 2020, UK bargain fashion retailer Primark lost out on around £1 billion in sales. Choosing to stay offline, Primark reportedly hoped that their sales would revive when they reopened and make up for their losses during the shut-down period. High fashion luxury brands like Chanel also chose to stay offline. For Chanel, preserving their unique customer experience and quality in-store service is key.
Chinese markets leading on luxury spending globally, spending $130 billion per year, 35% of their total spend. With events like Single’s Day, the Chinese retail industry reels it in! Influencers showcase and directly sell products to viewers and followers. Upmesh, the world’s first live selling system recently launched its’ live stream shopping app for Instagram Live. Showcasing products has helped to empower the consumer and enhance product discovery. This has meant that consumers aren’t as shy to vote with their feet. 32% of consumers in the US changed their retailer when their selected product was unavailable, 39% changed the brand or product, while only 13% waited and 16% did not buy anything.
If brand loyalty is no longer a given, what can brands do to keep their customers engaged? To understand this, we need to look at what your customers need and how their needs have changed.
E-commerce giant Ali Baba continues to open Hema stores across the globe. With an all-in-one shopping, restaurant and distribution model, this is not the traditional brick and mortar retail store. This store can provide a range of services that meet several consumer needs. While the function of the brick-and-mortar store evolves, the role of the sales assistant will follow suit. Perhaps the new sales assistant could become a strategically placed and brand-sponsored micro-influencer…
Did traditional retail die? Yes – multi-use stores and omnichannel retail will take their place.
- 61% of shoppers would rather buy from brands that have a physical location than with brands that are only online.
- Though around 78% of consumers prefer to shop in-store, physical stores still process 94% of total retail sales.
- Research by the NRF and IBM found that 98% of Gen Z consumers said that they make purchases in physical stores some or most of the time.
- Just 7% of consumers say that online is the only way they shop·
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