It is amazing how fast innovation moves, and the impact felt by us all can be pretty dramatic. New technologies make things great today, and evolving innovations make things even better tomorrow.
Take mobile phones for instance, and the difference between state-of-the-art in 1995 with that of 2016.
Innovations and continuous improvement have made mobile phones smaller, more powerful, more effective and just flat out better.
How about online e-commerce? How many of you would trade your online shopping experience of the early 2000’s with that which you enjoy today?
Retailers have used technology and analytics to make online shopping a more personalized and relevant, and it’s continually evolved to become an optimal experience.
Then, of course, there are the innovations taking place in the vast majority of brick-and-mortar retail stores today, right? Here’s a challenge for you: Can you place a year with the store picture below?
Uh, yeah. Your guess is as good as mine, and that’s the point.
Retail stores have not kept up the pace of innovation seen in almost every other aspect of our lives.
One of the most successful of retailers is Les Wexner, CEO of L Brands, the company of world-renown and household name brands Victoria’s Secret, PINK, Bath & Body Works, La Senza and Henri Bendel. Speaking at his company’s annual investors meeting last November, Wexner had some pointed comments related to the remodeling of Victoria’s Secrets stores over the past seven years and the proven increase in sales due to refreshed store environments:
“This is a first in the world, this insight. This is way bigger than the Internet, although it’s not as sexy — that you just remodel a 10-year store and lift its sales — but it should be. If you see a store that hasn’t changed in a decade, it’s probably dead on its ass.” ~ Les Wexner, Nov. 3, 2015
Could there be a more ringing endorsement of the value of physical stores in today’s multichannel retail environment?
Wexner went on to tell the assembled group of Wall Street analysts:
“We’re not as fascinated — have never been as fascinated — with the Internet as you are. If you build the brand, the Internet will follow.”
Retail’s new website is … the store.
The stark reality of physical retail is that there has been little to no investment in brick-and-mortar stores over the last decade. Massive investments have been made in digital channels, but investments have remained stagnant in the channel that accounts for well over 90 percent of sales.
How crazy is that?
The industry is well past due in balancing its investments across its channels, and those companies who hesitate face falling irretrievably behind. In 2016, we’ll undoubtedly see the leading world-class retailers increase investments in the following store capabilities:
- Understanding shoppers. Just like their online brethren, stores need to better understand who their shoppers are, and not just through loyalty cards and POS systems when a purchase occurs. Rather, they need to know the shoppers who are nearby, as well as those who are in the store. Plus, as valuable as buyers are, even more valuable is information on shoppers who don’t buy (and their reasons as to why).
- Delivering exceptional shopping experiences. Again, like online counterparts, stores need to focus of delivering unique and personalized experiences in and around the store, and throughout the entire multichannel shopping journey.
- Maximizing service and sales opportunities. Stores have less opportunity – traffic has been down year-over-year for over 36 consecutive months. But, while shoppers visit less frequently, they are spending more often and spending more when they do – conversion, average transaction value (ATV) and sales per shopper (SpS) have trended up. Each store visit represents opportunity, and it’s increasingly a one-time only opportunity at that.
There’s no getting around the fact that today’s shoppers have redefined shopping as a multichannel experience. It’s no longer a question about online or in-store. Brands recognize it’s now about online AND in-store, and those retailers that craft and deliver a seamless, branded experience across channels – like L Brands does with Victoria’s Secret – are the ones who will outperform the rest.