The future of retail is a choice
Remember that scene from The Matrix. Well, it’s like that. We have a choice. We can take
the blue pill and remain in contented ignorance. Or we can take the red pill and face some
unsettling truths, see the world with new eyes and just possibly change the game.
Some predict the slow demise of the physical store. And that’s true if all you offer is
We, however, see it differently. We see physical stores as the centre of the brand
experience. We see it as a format that has all the elements to produce deeply engaged
But it will require rethinking everything.
The old model saw paid media as footfall drivers and the store as a transactional platform.
While the store remains the primary transactional space (85% of retail is still offline) what
we’re seeing is the beginning of a shift in thinking about what to do with the store.
We can choose to continue to focus on operational efficiencies – but frankly this really only
better positions the store as local distribution centres.
Or we can look at it this way:
Where are the biggest audiences right now? In retail.
Where are the longest brand engagement times? In retail.
Where, in the customer journey, can real experiences best be had? In retail.
We’re sitting on a goldmine.
So let’s talk about the rethinking part…
Right now the physical store is a fundamentally an Ops centre focused on optimising supply
chain efficiency. Supply chain wags the dog and the environment, the store, is basically
back-engineered for it.
Changing this mentality and setup is difficult. That’s actually a massive understatement. And
being in New Zealand throws up some additional challenges. Scale is non-existent. The
money that comes from that isn’t really here. Some of the things we’re seeing around the
world simply wouldn’t work. And perhaps most importantly, there isn’t the same
desperation for differentiation and innovation – because there isn’t the intense
Perhaps I should also mention that we’ve done a great job at training the consumers to
think price is value and to prioritise it above all else – but this won’t be the case forever.
So, how can we make the store not only a better experience but central to the customer
Stop operating in silos.
Right now we’ve got a problem in that the marketing teams don’t really participate in the
curatorship of the stores. There isn’t a seamless system that regulates how shopper
marketing works and how best to elevate it into something beyond simple POS on shelf.
We like to think in terms of airplanes and runways.
Store Ops and marketing teams need to come together to understand what platforms exist
for marketing instore and which need to be created. These are the runways.
Now for the airplanes. Once the runways have been created and understood we can
unleash the creative juices of the agencies and internal marketing teams to produce instore
stories, content and marketing that elevates the brand and introduces supplier brands into
the environment in more engaging ways.
Retail Media Networks are the start of this journey but there’s still so much to do in
producing runways that help create immersive, inspirational and entertaining experiences in
Let’s get more marketers into the store design teams.
And let’s get the store into the media matrix.
How come I can make a consumer smile via a piece of marketing but instore we literally
have a phrase for what happens to them: Zombie shopping.
If I asked what you would do to keep a consumer in your store for 2 hours, what would you
say? Or how about, what would your store have to offer to make leaving the house a
worthwhile trip and not a grudge visit?
Signature experiences are those experiences that are the memorable moments of a
customer journey. They are proof points for the brand mission, purpose, promise, point of
difference (whatever phrase the brand strategist of the day wants to use!) But there’s no
better place to develop these signature experiences than in the physical store. You’ve got
your consumers in a space, for a significant time, with all the advantages that experiences
‘behind glass’ can’t offer.
You need to find ways to make these store experiences unique to your brand, find ways to
make shoppers enjoy their visit, find ways to reward them for the time spent with you.
And the best people to do this? Marketing people. Creative people. Again, get them into the
process of store design, category development, store communication and signage –
Build for the future
Managing, building and updating stores in not like managing other media. Not by a long
shot. Retailers think in terms of years – not weeks and days. The scale of development
means the commercial impact of decisions is huge and therefore retailers usually move
cautiously. But here’s the thing. Because of this timeline we need to realise that we’re not building
environments for shoppers of today. If we’re focusing on today then we’ve already missed
the boat. We need to focus on the shopper of the future.
The best way to approach this is to clarify the role of the store in the your shopper’s world –
not now – but in five years’ time. From my perspective I think this a major missing piece of
retail here in New Zealand.
Locking it down isn’t easy and this is why we see retailers around the world constantly
innovating and learning through format experimentation and test stores (virtual and real).
Within cooperative models it’s difficult to designate stores as test stores but there needs to
be more testing, a sandbox to play in, for us to understand how we influence the large
design plans of store networks.
I recently bumped into a design development approach called Zero-Based Design. There’s a
lot more to it but the main outtake for me was the idea of not thinking about the
destination in terms of the tools or challenges you have today but rather working backwards
from a perfect scenario or as they call it a ‘sunny day’ scenario and understanding what it
would take to get there.
I would encourage all retailers to clarify what their sunny day looks like.
As much as every brand is currently heavily focused on being customer-centric, the reason
to choose to make the physical store a key touchpoint in the customer journey isn’t just to
grow shoppers’ “brand love”.
If we transition the store from a transactional platform we’re looking at making this medium
one that drives acquisition and retention, let alone generating higher conversion. We’re also
talking about making a medium more and more stakeholders like supplier brands want to
be a part of and are willing to pay to play.
In short, we’re talking commercial advantages alongside brand perception and engagement.
To conclude, the current trajectory of the store experience is one that is still being
dominated by the mindset of the store as a transactional platform.
We don’t want to just keep the physical format afloat – we believe it should take its place as
the centre of the brand universe. But as mentioned – everything would have to change.
We’ve got the audiences there right now – but these numbers will dwindle if we don’t take
advantage of them now.
We’ve got to start changing the behaviour of shoppers now – from only focusing on price to
expecting and getting true brand experiences – or else face a race to the bottom.
And we need to define what those experiences are for each brand – our signature
And we need to start now – otherwise we’ll lose today’s shoppers tomorrow.
Bruce Gourley is Head of Strategy at Hyper. He has spent over 15 years in the overlap of brand strategy, customer experience and retail marketing with an increasing focus on customer experience.