Creating an Endless Aisle for Your Brick and Mortar Store

My veterinarian has a tiny showroom area with barely enough room for more than a couple of patients to wait for their appointments, let alone hold shelves filled with products. I, like many pet owners, rely on specialty food for our furry friends that we can only buy at the vet clinic, so it was becoming a real hassle to arrive for our appointment and be told they are out of the product we need. Even calling ahead didn’t always guarantee they would have the items I needed in stock, which would lead to me having to drive halfway around the city to find that special brand that my (fussy) pup loves.

Busy waiting rooms are common at small clinics. There is just no room for excess merchandise.

But in the past year, my vet came up with a great solution to extend their physical space and make it even more convenient for me to spend money on high-end pet food: they found a virtual pet food supplier to create an endless aisle. From the comfort of my home, I can order my dog’s food, treats and accessories easily through a storefront branded for my vet clinic, and if I happen to be at my vet’s and they are out of the products, they just enter my order into their system and it arrives on my doorstep a day later.

Even better, my vet has the record of what I’ve ordered on my file, so if my dog runs into problems, they know what they’ve tried and can suggest something new.

Lots of retailers, even beyond vets, are now transitioning to having zero inventory and putting excess inventory in an online shop to create an endless aisle for their customers. With an endless aisle, the customer can make individual purchases or set up regular deliveries for food and personal care items on a cadence that works for their lifestyle. Knowing you can get what you want without having to consciously remember every month to make a purchase is a convenience that most shoppers crave and in some cases are happy to pay a premium for.

For retailers, the gains from offering an Endless aisle are obvious and immediate: for every customer you sign on for a subscription to products, the more passive income you can count on every month when looking at your sales targets. The more customers who receive their goods regularly and frictionlessly will feed into your intake funnel through referrals, organically adding to your bottom line.

There’s another reason to offer an endless aisle, which is the same reason grocers have gum near the point of sale: impulse items. In setting up your subscription service, you’ll look at a wide selection of items and might decide to add a few smaller things. Your cart might be nearing the magical number to receive free shipping, so you add some items you know you will need in future just to escape the shipping charge.

Just because consumers have set up a frictionless delivery schedule doesn’t mean you can’t expect an increase in these impulse purchases. Every time someone greets the delivery person at the door or sees the box on their doorstep, your brand has made a touch with them. They will momentarily think about your brand. If your brand hasn’t considered creating an endless aisle, now might be the time to, as the benefits are numerous.

The Endless Aisle can also help you capture shoppers who forgot to complete a transaction in store, but still have a need. Often, these customers are lost to competing companies closer to where that customer lives, works, or is already running errands. Knowing they can visit your store in a convenient way on their own schedule keeps them loyal to you, and physically out of competitors’ stores.

Online shopping isn’t your competition, it’s your store extension

You may not know this, but Salesfloor can help your company set up an Endless Aisle easily. Customers can log on, shop, even receive shopping advice, customized offers and receive the kind of care they would be used to in store, all from within the site. Once they’ve completed their purchase or set up their delivery schedule, you can gain insights into what they’re looking at and how regularly they are using your services.

Understanding how often customers purchase is as important as understanding what they are most likely to purchase. Customers will often walk away if they are feeling upsold in a store, but if you are walking them through their purchases and helping them at the exact time they have a need, they are less likely to shop elsewhere and more likely to recommend you to friends and family.

People like to recommend brands that solve a problem for them without them having to invest a lot of time and energy on research or comparison. Your integrated sales team, combines with analytics and purchase cadence knowledge is an unbeatable combination that could help you acquire customers, keep customers, and develop customer evangelists, the holy grail for retailers.

The advantages of the Endless Aisle are too numerous for retailers to ignore, just like the siren call of a store that customers trust, with excellent sales help, available at their convenience is nearly impossible to ignore. Even people who love to shop have items they simply hate or resent having to shop for, not to mention how busy everyone seems these days.

If you’re continuously solving problems for customers, leaving them with positive experiences, you’ve set up one of the most powerful marketing systems in the world: word of mouth referral. The combination of word of mouth referral with subscription based deliveries could transform your bottom line.

How to Compete With Amazon

Most people who shop online have bought something from Amazon. It’s a site that has everything from Oprah’s favorite books to canisters of elemental metals. If you can’t find it there, the legend goes, you probably can’t buy it online.

Yet, many in-person retailers continue to thrive. How do they do it? It really comes down to the reasons people shop, or seek out shopping experiences. So here are five keys to competing with your brick and mortar store against the behemoth that is Amazon.

#1. Have Knowledgeable, Well-Trained Associates


via GIPHY

When you click on an Amazon item, there is a limited amount of information available to you. There are often only one or two images available, but  the images are not in situ, meaning you can’t get a sense of scale of an item next to something like a floor lamp or a coffee table. This has resulted in people purchasing items like a toy tent instead of a tent that fits adults. You can’t tell the quality of construction of an item by a description of an item. You can only make a guess as to whether an item or its competitor is more suited to your needs, or more durable. Sure, there are comments on items, but comments can be useless, as people use them to air unrelated grievances. Knowledgeable staff can give concrete answers and advice.

Only sales staff know that item A has been returned more often than item B. Investing in experienced staff and training them can make a world of difference to customers, and they will return.

#2. Create an In-Store Experience


via GIPHY

Amazon can do a lot of things, but it can’t give you a hand massage, or show you how to accessorize an outfit. It also can’t invite a string quartet to play or have an author read their book to you in person.

In-store experiences are impossible to replicate digitally. Connecting people in a shared environment is the killer advantage of the bricks and mortar experience. Stores that put this at the forefront of their marketing efforts succeed where others don’t. Think about ways that will entice customers to make the effort to see you.

#3. Accentuate Your Physical Advantage


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There’s a reason people don’t buy cars or bathing suits much online: you have to be in them to know whether you’d want to spend an afternoon in one. Bricks and Mortar stores still have a huge advantage when it comes to the shopping experience: experiential learning. Customers being able to interact with any item in the store is one of the main reasons it’s impossible to get near an Apple Store any day of the week.

Think about ways you can make your in-store experience more tactile and experiential. Consider having samples of your materials available for people to touch and interact with. Train staff on explaining how jeans are made while they demonstrate stitching on a pair of pants.

#4. Offer Pick-Up In-Store


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In retail, it’s important to reward those who are brand loyal and want to shop with you but have specific needs. One of those needs is often the desire to pick up a specific order and not have to search the store or wonder if it’s in stock in their size. This is where pick-up in-store solves a key gap in the shopping ecosystem. Sometimes, a store location is near their work or home, and picking up an item in-store is easier for them than worrying whether the postal worker or UPS person will drop their item off on time, or send their package to a depot.

Pick-up in-store offers customers peace of mind: their items are waiting for them, without hassle, and often incorporating any promotions that are offered online.

This would be a good time to tell you about the Salesfloor Click & Collect feature coming in the near future. 😉  With this feature, customers can request a product from a local store and once an associate confirms it is ready, the customer can visit the store for purchase.

#5. Offer Real, Not Automated Recommendations


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Amazon’s recommendation engine is a great example of computer intelligence not approaching human intelligence. If you’ve ever bought a romance novel for your aunt, a wrench, and a printer in the same month from Amazon, you’ve seen the strange phenomenon of wild recommendations. Amazon can only predict which items are similar to items you’ve bought or items that people have bought most often together. It cannot approach the level of knowledge a brand and sales associate combination can provide.

Only a real person, armed with their own experiences, training, and data about the customer (the Salesfloor app helps augment this) can tell you that if you liked this cardigan, the V-neck that is in the same knit is also right for you. Amazon simply can’t replicate it.

There are so many reasons why an in-store shopping experience is better for customers than sitting on a couch attempting to navigate an endless set of options. The most important thing to focus on is the customer’s overall experience. Thing sensually- appealing to the senses is the easiest way to differentiate yourself from Amazon.

Retail Associates Through the Decades

If you’ve ever seen the television show Mr Selfridge you know that retail used to be an entirely different business than it is today. Harry Selfridge was seen as a vulgarian when he decided to open a retail store in London and allow buyers to see the goods before they were prepared to make a purchase.

Selfridge caused a retail revolution by understanding customer behavior. He allowed the goods to be put on display and also trained his retail staff on the art of finding the suitable item for any given buyer, thus beginning the first true democratization of the retail experience.

[Wikicommons: Selfridges in the 1920’s]

While the idea of keeping goods under a table is ludicrous to us today, we’ve seen an equally large shift in how retail works and the role of the sales associate. Since then much has changed, and only companies that can see which way the business is going will be able to thrive in the future.

But as much that has changed since the early 1900’s, the pace of change has only accelerated in the last 30 years – especially in the role of the sales associate.

The 80’s: Retail Companies Go From Monolith to Personal

[image: Michael Galinsky/Steidl/rumur.com from his book Malls Across America]

The 1980s were about conspicuous spending and cachet but also focused a lot on the large, department store experience. A good example of this is how many movies in the 1980s involved large department stores.

[Film still from Valley Girls]

Going to a place like Macy’s was seen as a way to get a lot of shopping done at once. Customers put trust into large department stores. Even if an item could be purchased cheaper across town, you were already at the department store, so you were more likely to make the purchase. People used to buy televisions and computers at Sears.

There was another strategic advantage for a customer in the Department Store experience: consistency. You could feel safe knowing that the sales staff were all trained the same way, and were all able to deliver a specific kind of customer care. This was comforting to the person making several medium and large purchases.

The 1980s were part of the era of the Monolith in retail. Employees were given specific instructions on how to dress, down to the type of hosiery and jewelry in some cases, and how to wear their hair and makeup. Training was administered according to one prototype. There wasn’t much room for improvisation. Keeping the standard was important. Sometimes, this came at the detriment to the customer. It was seen as the best way to communicate the brand at the point of sale.

It largely worked. It wasn’t until more competition entered markets and stores specializing in one type of good (for instance electronics, cosmetic, or shoe retailers) began to challenge the authority of Department Stores that we began to see a loosening of the rules.

Department stores had to adapt to the “eager specialist” model from the “monolith” model it had been employing.

Department stores began to ramp up loyalty programs, and engage more with customers in a service model that was more focused on the customer’s wants than how the monolith could fit into the customer’s stated need. More choices were made available across departments at this time in order to further suit customers that didn’t fit a certain box. It was the beginning of the larger trend of personalization in retail.

The 90’s: Stores Move From Approachable to On Demand

The 1990s were the last great heyday of the mall experience. Before e-commerce changed the game for consumers, the mall was still the place where most people went when they needed to shop.

The era ushered in a lot of very specific types of stores: No longer were there “teen clothing stores” there were now “teen pajama and underwear stores.”  There were stores dedicated to movie posters. There were stores that only sold various products to scent your home.

On the other side of this was the rise of the specialized Box Store. The idea behind this concept was to provide a seemingly limitless supply of options to a customer for whatever need in a specific vertical (Office supplies, Housewares, Home Improvement, for instance.)

Both of these approaches served the same trend: being an exhaustive, on-demand place to serve customers’ needs. Yes, the candle store wasn’t going to be able to capture sales away from the stationary store that also sold candles, but it was the only place you could get that one kind of French candle, so it captured a certain kind of clientele. The specialty box store was able to scoop up customers who weren’t happy with the selection of 3 doorknobs at their local hardware store by supplying 30 options, and while you were there, you might be enticed to get some paint, caulk, and lighting fixtures.

Sales associates were encouraged to look and be themselves more in these environments. Often there were core pieces of a “uniform” but hair, makeup, and other items were left up to the associate. In box stores, associates were often encouraged to personalize smocks or aprons that were parts of their uniforms.

[Just some of the creative ways uniforms are personalized at the specialty box stores]

Sales associates also had to have an exhaustive amount of knowledge about hundreds of SKUs to hold up the brand promise that their store was the only place to go to get exactly what the customer really needed. They were the font of product knowledge and people often revisited specific sales associates they had good relationships with on subsequent visits.

These stores succeeded by providing the most tempting array of options for consumers to choose from, and gave them empowerment in knowing they could choose from 30 items and not just the 3 they were accustomed to. The 1990s began the era of on-demand retail.

The 00’s: Retailers Transition From “Available to Answer” to Proactive

[gif: Mean Girls 2004]

In the 2000s, commerce began to hit its stride. Now, customers were able to get ratings and reviews on products right on the page they could purchase the product from. There were entire sites devoted to just reviewing retail purchases that shoppers could visit to arm themselves with information. If a certain type of vacuum tended to fail at 6 months, you could find that out within seconds of looking at it online.

Price comparison also became an obsession for consumers. If you can spend 10 minutes of your time instead of hours in a car to find a retailer that could save you hundreds on major purchases, why wouldn’t you?

[Elvert Barnes – 08.Downtown2.WDC.11dec05 on Flickr]

The challenge for bricks and mortar stores and their online counterparts became how to be proactive toward consumers to get them to spend money in their stores instead of at a random online retailer?

The answer was two-fold: Become proactive, and deliver on trust. Retailers put money and effort into making their stores more welcoming. They put sales associates into the aisles to proactively talk to customers and provide product knowledge, and made sales associates on demand (Lowe’s famously had ‘doorbells’ in their aisles to summon sales associates) The Apple Store took this one step further by putting sales associates on the floor to encourage customers to play with their product offerings while they explained the benefits and comparison between models in a proactive, but non intrusive way.

The era of “me retail,” (retail centered around the individual) began to take shape. In-store, customers were encouraged at the point of sale to sign up for newsletters that would gain more and more intelligence as they were deployed, allowing retailers to customize these touches and bring more customers in-store.

Companies like Target used their loyalty programs to proactively suggest items in their customized newsletters to customers in order to increase purchase frequency at point of sale. Customers got used to receiving tailored offers.  

What’s Next

Tailored offers have their limits. If you shop for gifts on Amazon, and then log back in, you can see the suggested “items for you” are not “for you” as much as “similar to things you just bought for your uncle.” There are limits to what you can do with data outside of a human touch.

“The next great leap in retail will be in-store clienteling.”

That’s why companies like Salesfloor are investing in what we call in-store clienteling. The evolving role of an associate is an empowered associate, no longer limited to sell and connect with customers in-store. They can connect with their customers online, via email, over chat and through social media any time of the day or day of the week. In addition to this, associates now have a lot of data about customers they can leverage, coupled with point of sale data that show trends like “customers who bought A will be happy with B” or “customers who buy C will return in a month to buy D” but data is nothing without insights to go with it.

Customer preferences and behaviors aren’t generally as cut and dried as we’d like them to be. A person might be primed for a sale based on data, but when they enter a store, they might not be in the right frame of mind, or may regret a “reckless” purchase later, and return it. The beauty of in-store clienteling is that it allows the associate to reconnect with the customer when the timing is better. If the customer isn’t in the buying mood in-store today, they can come back to the interaction a few days later online via the associate or local store’s Salesfoor storefront via URL given to the customer to ‘think about it’.

All of this points at the future of the sales associate being a combination of sales, stylist AND therapist.

[retail therapy is totally a thing…in more ways than one]

Retail is a living, breathing industry and it will always need to reinvent itself to meet the needs of the customer. The ability to marry good data with highly trained people poses the best possible future for retail success.

Where Does the Associate Fit in an Automated World?

We’ve all imagined it- a world where our demands are catered to by computers and robots so that a lot of the daily drudgery is taken care of by someone else. And taking a look at the pace at which things are advancing, it looks like our lives are quickly hurtling towards complete automation.

While it’s interesting to believe that eventually we will be living in a utopia where everything is done for us at the tap of a button, there are major flaws to offloading our lives to computers. Anyone who has accidentally ordered the wrong item online can attest that sometimes automation can be a bigger pain than just getting the correct item in a store.

Associates vs. Automation on Flexibility

The reason ATMs have not made tellers extinct is the same reason that automated kiosks at fast food restaurants are slow to be adopted: people often need to interact with people to solve their problems. Programming and artificial intelligence are great, but you can’t code for every possibility of issue a person might experience. Ever tried to call the 1-800 number for a company and not had any of the number options apply to you? For a sizable portion of the population, this is often the case.

“The reason ATMs have not made tellers extinct is the same reason that automated kiosks at fast food restaurants are slow to be adopted: people often need to interact with people to solve their problems.”

The same holds true for retail. As much as people are fine buying consumables (shampoo, razors, etc) from an online drugstore, there are still people who will never buy a pair of shoes or a jacket without trying it on in store and talking to a sales associate.

Winner: Sales Associates

Associates vs. Automation on Personalization

Consider that while Sephora does a brisk business online, it’s very difficult for someone to find a shade of lipstick that would match a dress they have to wear to a wedding, or for someone to accurately understand whether a moisturizing or smoothing conditioner would work better for them, without speaking to a person who understands the product line. Even if a color swatch for a lipstick is 100% accurate (impossible to do with current technology) then there are the other qualities a lipstick has: texture, weight, matte vs shiny, longevity, whether it has plumping or smoothing ingredients, to consider. 2 minutes with a sales associate and you can have all the answers and make an educated decision on whether that lipstick is right for you.

Consider all the areas in your life where you hold opinions on how something should be, or you have special requirements. Even if you read all the text on a page for a sweater and all the reviews, you still might not know whether 5% Merino Wool will make you itch. 2 minutes in a dressing room will tell you. 5 minutes with a sales associate will give you other options you might not have considered online.

People often view suggestion engines on e-commerce platforms as replacing the role of the Sales Associate in making recommendations, but algorithms are not people. Algorithms don’t know what percentage of “people who bought this item” bought it for uncles or husbands. This is an important distinction that Sales Associates can find out in a very quick discussion.

“Algorithms don’t know what percentage of “people who bought this item” bought it for uncles or husbands.”

Use cases are only some of the reasons that people need and prefer sales associates. Developing relationships with sales associates can help you save money. Good sales associates will tip off valued customers when sales are imminent.

Winner: Sales Associate, with automation as the helpful sidekick

Associates vs. Automation on Social Intelligence

The most important distinction that separates trained sales associates from computers is being able to take in hundreds of pieces of subjective data and turn them into a “sales diagnosis.” Salespeople are able to look at a customer from the time they walk into a store and suss out their style, their mood, and through pleasant interactions, understand the immediate needs of that customer, whether they are buying for themselves, or someone very different from themselves, understand any budget concerns, and suggest items to fit the needs of that customer. This becomes infinitely harder for computers who might be able to identify your face as “you,” but not understand any of these other key pieces of data, or judge your mood.

A surprising amount of  subjectivity goes into the shopping experience. People are better educated consumers- meaning they understand the average price for goods, common feature sets, what to look for in a quality item, etc. but many customers still go into shopping for gifts or major items a bit bewildered. They often have lots of questions. If you’ve ever used a “frequently asked questions” page on a website, you understand the limitations. No algorithm will be able to tell you how easy to clean one fridge is versus another one, where a Sales Associate will have the answer to this, and also ask follow up questions about product suitability if that question leads them to believe the person asking the question has children. One fridge might be safer than another for little fingers or have the water dispenser in a less accessible place. No algorithm can take these pieces of data into proper consideration and deliver a suggestion the same way.

“If you’ve ever used a “frequently asked questions” page on a website, you understand the limitations (of automation).”

Sales Associates are also the keepers of secret information that they can use to help customers. If there is a problem with a product, Sales Associates often know the best way to get in touch with manufacturers, where to have products serviced, or altered, and often can tell you before purchase if an item being sold is “white labeled” by another company. (Something even consumer reviews can’t tell you, but could be critical in the event of a product recall or a malfunction.) Secret knowledge holds great value and power for consumers, and there is no easy way to get this information online.

Computers can store a lot more information than humans and access it incredibly quickly, but they don’t pick up social cues.

Winner: Sales Associate, with automation as the helpful sidekick

Best of Both Worlds

So where does the associate fit in an automated world? At the helm. Beginning now, and expanding in the future, sales associates will be able to leverage the best parts of big data and artificial intelligence coupled with their tried and true methods of customer care.

Sales teams will be able to share secret knowledge and customer insights. They will be able to flag questions that often arise from customers to help their fellow associates more effectively learn and pass on product knowledge. They will be able to proactively communicate with valued customers to alert them of private events, and sales on specific items they’ve expressed interest in, thus raising the purchase cadence of these valued customers. They will be able to  record important events in a customer’s life- birthdays, anniversaries, etc. and prepare proactive communications to entice a customer to come in to shop for that event.

Data on its own can sometimes be seen as an intrusion, but data coupled with a friendly face and a confident Sales Associate can help close deals. For many customers, the less they need to think about or disclose about their needs, the more they appreciate the service.

Service industries will always be with us, and sales associates are a vitally important part of the retail ecosystem. Imagine buying a car or a house without speaking to a person. Customers have needs that technology won’t be able to meet in the same way that a person can. Humans can leverage the best parts of technology to deliver the best solution for customers in ways that anticipate and serve the needs of customers in new and exciting ways.

7 Trends That Will Continue to Impact Retail in 2017

2016 has been one interesting year (to say the least). We’ve lost too many of our classic rock icons, we had one of the most divisive political races in history, and we found out that the UK will be leaving the European Union. We’ve talked to many people who are ready to move into 2017 with an eye to a hopeful future, and we are, too.

With that eye on the hopeful future, we’ve taken a look at seven hot trends that have really taken off in 2016 that we predict will make an even bigger impact on retail in 2017.

1. “On demand” Shopping

Though Google’s Project Wing partnership with Starbucks – along with the promise of drone-delivered lattés – has recently been shelved, the inevitability of drones delivering goods to our doorstep at a click of a button isn’t too far off into the future. Ever since Amazon released the test drone delivery footage in 2013, we’ve been anticipating the day we would see our packages flying through the skyline. And just recently, the Federal Aviation Authority gave Amazon the ok to proceed with the service.

Though a few retailers already provide same day delivery and pickup in-store, it won’t be long into the future before it’s expected that your customers will be able to get their purchases within hours of their purchase.

via GIPHY

2. The Internet of Things

Not one, but two different ‘internet fridges’ were offered to the buying public this year that turn your ice box into a smart food centre that allows you to do things like order groceries and browse recipes. Google is monitoring our homes with Nest, Amazon’s Alexa is our home voice-activated personal assistant who will do everything from playing music to suit our mood to ordering toilet paper and beyond.

What’s next? Will our vanities order expired cosmetics? Will our Apple Watches remind us when we are walking by the mall that it is our mother-in-law’s birthday coming up? Will our shoes send a message to our personal shopper that it’s time for a new pair because they’ve worn out?

You may think this is far fetched, but at the pace of technology, it’s not that far off into the future. As everything in our physical world gets connected to the web, more and more opportunities for retailers arise. Have you imagined how your business will take advantage of this?

 

smartfridge

[credit: http://theverynearfuture.com/post/137280998764/smart-fridge-what-is-this-comic-about-samsung]

3. Personalization

It’s not new or news that customers want to feel like they are more than just a number. For a long time, personalization has been key to improving the experience for the customer as well as increasing sales for the retailer.

There is nothing like coming into your favorite business and being greeted by someone who not only remembers you from your last visit, but can also show you directly to the new products based on their memory of your previous purchases. It saves you time and makes you feel special. It also influences your purchase. According to our recent study, 73 percent of shoppers say sales associates who remember their personal preferences/style impact how much they buy from a retailer.

But it isn’t only in-store where personalization can make a difference, you have the opportunity to do more than just recommend products through algorithm. Tools like Salesfloor allow you to give the same level of personalization online that you give offline. This isn’t a trend that is going to go away. As more and competition appears, personalization is going to become even more important.

4. Virtual and Augmented Reality

Have you ever looked at a chair or table in a showroom and tried to envision how it would look and fit in your house? We have. Back in the day of catalogues, we even cut them out and stood holding the clipping out in front of us to get a better sense. Thankfully as Virtual and Augmented Reality (VR/AR) have evolved over time, we no longer have to carefully cut out pictures, we can just hold our smartphones up to the room, place the furniture piece and -voila!- we can see how it will fit in its surroundings.

For those who don’t know the distinction, Virtual Reality (VR) is the technology that immerses the user into a simulated world, and Augmented Reality (AR) is technology that brings simulated elements into the real world.

In regards to VR, you have probably seen the goggles such as the Oculus Rift, where the person wearing them escapes to a 360 degree fantasy world. Though virtual reality is mostly used in gaming, we are seeing travel companies use it to create simulations of escapes, realtors use it for virtual tours of homes for sale, and car companies use it for virtual test drives. HBR.org gives the example of being able to test a tent remotely.

AR has been around for many years (Converse used it in 2010), however, the rise of Pokemon Go this year has not only brought it into the mainstream, it’s ignited the public’s desire for more applications of the technology. AR is especially attractive because it’s so simple: anyone with a smartphone can use it. To our example above around furniture, Wayfair, online home goods and furniture marketplace, launched Wayfair View to help customers visualize furniture in their homes (though Ikea did this back in 2013).

vr

[credit: http://gph.is/2bFPCMq created from Lee Jeans ad]

5. Direct to Consumer

Direct to consumer fashion brands have been popping up all over for many years now, but according to Racked, many established designers and brands are also pulling their lines out of department stores and creating their own direct to consumer online and offline boutiques. This move is accelerating now because of several factors:

Number one, designers and brands have grown more direct relationships with their customers through social media. Number two, creating online stores is easier than ever and since more and more customers are shopping online, this has created a great revenue source to help fund (number three) the brick and mortar experience.

Though this could prove tricky for some department stores, others like Saks Fifth Avenue have embraced the idea of the direct to consumer model, creating shop-in-shops that allow for their brands to create unique branding experiences while enjoying access to the Saks clientele.

saks_flickr_thomashawk

[credit: https://www.flickr.com/photos/thomashawk/12241789/]

6. Mobile Payments

Currently, there are only a handful major retailers that offer mobile payments: the Apple Store, Home Depot, Starbucks, Macy’s, Walgreens, Bloomingdales, etc. But we know that this is going to grow a lot in the next few years because of the number of options consumers now have available. According to TechCrunch:

A recent report noted that 39 percent of all mobile users in the U.S. had made a mobile payment in 2015. This is up from 14 percent in 2014 and by my estimations will in the 70 percent range by 2017.

There are three overarching categories of mobile payments:

  1. Near Field Communications (NFC), which you’ll find in Apple Pay, Android Pay, and Samsung Pay, allowing the customer to just tap their phone to a device and authorize the transaction.
  2. Commerce payments, where customers use an app with a stored credit card. Anyone who has checked themselves out at the Apple Store or used the Starbucks App have experienced this.
  3. Mobile Wallets, where customers can store their cards on their phone to scan.

If you haven’t considered offering mobile payments as an option to your customers, it’s probably a good New Year’s resolution to make.

mobilepay

[credit: http://themerkle.com/shake-giving-android-apple-pay-run-for-money/]

7. Enhanced Experiences

As we wrote in our article on the retail renaissance, the retailers who are driving the most profit per square foot in their stores are those who are prioritizing experience over sales. Though it seems like a contradiction to get more sales from de-prioritizing sales, this is what appears to be a factor contributing to the enormous brick and mortar profits of retailers like Apple, Shinola, and Warby Parker, and more established retailers and department stores are taking note.

Bed, Bath and Beyond just announced that they are adding a cafe in their stores and have even applied for a liquor licence. Saks at Brookfield Place in New York offers up an experience they call  a Power Lunch, which gives you a beauty treatment, style consultation and lunch – no purchase required. Harry Rosen partnered with Macallan Whisky to create a tasting bar in store.

The more excuses you can give your customers to just ‘drop in and hang out’ with no pressure to buy, the more likely they will buy. And the more often they have these experiences, the more they will start to get used to them. 2017 and beyond we are sure to see a rise in enhanced experiences in retail.

frankandoakbarbershop

[Credit: Guru Blog covering the Barbershop in Frank & Oak’s Montreal retail location]

When it comes to trends, 2017 looks a lot like the next iteration of 2016, which will make things even more exciting for retailers and customers. Now, here’s hoping the trends outside of the retail world don’t continue along the same path as 2016. Have a happy holiday and a prosperous new year!

Retail Personalization in 2017: Exciting Times Ahead

Though the means of shopping may have changed radically, the emotional drivers surrounding it have not.

Think about how shopping is tied to some of our most precious milestones and memories: we spend time crafting lists for weddings; we fight our way across town in traffic to get the last of the latest trendy toys on the shelf for our children; we agonize over the possibility that someone may have beaten us to the perfect birthday present for our best friend; and this holiday season, we will search high and low to get everyone on our list the perfect present.

Buying the right gift for the right person at the right time makes us feel good. It also lets the recipient know that we understand them and what they really enjoy.

This is the heart of why retail personalization is so important. If you’ve ever received a little card or gift from a store that participates in a birthday program, you can understand the allure of a brand that goes that extra bit to make you feel special and like you have more than a transactional relationship with that company.

Retail personalization isn’t one thing. It’s a host of ways that customers and brands can interact to make sure that the needs of the buyer are being listened to and addressed by the brand.

The same reason you can take home samples from your favorite make up store is the reason this is an emerging area for retail: if a customer feels listened and catered to, they are more likely to continue shopping at a store.

Even though it seems that the landscape of shopping is moving full steam ahead to a “post bricks and mortar” approach, many smart companies are investing in personalization and bridging the online to offline experience, borrowing the best things about both to make customers happy, and keep them coming back.

Incredible in-store experiences aren’t just relegated to expensive stores or places where a lot of personal attention is a given (make up stores, lingerie, jewelry). You can have a delightful shopping experience buying plumbing tools at your local hardware store.

Using Personalization to Differentiate Experience

So, what makes a great retail experience, rather than just a good one? Here are a few key differentiators:

  1. Sales associates understanding what makes the customer or the gift recipient tick
  2. Associates teams addressing the needs of the customer and working to any constraints like budget or time
  3. Associates building a relationship and trust with the customer

These elements are important to keep choosy customers, who can always price match from their pajamas at home, in the retail experience and purchasing from a specific retailer and building loyalty instead of just adding something quickly to a shopping cart online.

The future of retail is using digital tools to help augment, not replace, brand experiences.

Personalization Ghosts of Holiday Past

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[credit: whateverjames on flickr https://www.flickr.com/photos/whateverjamesinstitches/6536829253/]

Up until recently, the pure e-commerce sector hadn’t really solved the problem of personalization. Targeted email marketing is not a real substitute for personal attention and care when selecting an item, especially if the retailer is sending “Father’s Day” emails to a person who really needs to buy something for someone else.

The best solution that pure e-commerce has built to address the “personal touch” problem is recommendation engines. There are many reasons these don’t come close to the personal attention of a shopping assistant:

  1. An algorithm can’t distinguish between an item you buy for yourself or for another person, leaving you with suggestions which might not be appropriate
  2. For some stores which sell everything under the sun, they can’t distinguish between your purchase of laundry detergent and your purchase of a wedding present by priority
  3. If an item you truly want is sold out, the recommendations can sometimes be very far off the mark
  4. An algorithm can’t glean why you bought a gift, which can be embarrassing or painful to you when you are suggested something you previously purchased.

There are many more reasons why a simple recommendation engine doesn’t work, but they all come back to the same basic issue: there is no human intelligence in the process.

Putting humans into the mix is essential for brands to deliver that personal touch and a feeling on the end of the customer that they are being heard and that they are making the best informed choice.

Price isn’t the only factor when people buy for themselves or others. Sometimes, people are searching for a way to purchase a gift that says more about their relationship with the recipient than just “I had $100 dollars to spend on you, and this sweater seemed nice.”

A great example comes from Saks Fifth Avenue. Saks’ sales team are empowered to reach out to valued clients and send them customized lookbooks in order to keep them interested in shopping with them, but also to build unique relationships with a few sales team members. The deeper the relationship, the more likely a customer is to return and spend money with a particular salesperson, and that particular store.

Sales teams can also answer questions through Salesfloor to ensure that a customer is properly informed and can feel good about the purchase they’re making.

Personalization Ghosts of Holiday Future

Santa Claus responds to letters on a computer for Christmas

What’s next for retail personalization? The more sales teams and customers contribute data, the better predictive systems will work.

Look out for ways to connect with customers during times when they haven’t shopped in a while and enticing them with proactive suggestions related to their own purchasing and their purchasing habits for others, complete with customized visuals and copy that really add a personal touch and help eliminate the agonizing thought process some gifts elicit from customers. This might mean suggesting buying a gift for your mother, whose birthday is in June in March, because the item is in stock and at the right price point, and your sales associate has alerted you to the great deal.

The advantages of this system are obvious for retailers: regular, repeatable sales frequency, even when deep discounts aren’t being offered. Higher overall margins. Increased foot traffic, leading to larger per order spend and increase in word of mouth due to satisfying retail experiences.

While technology won’t replace human sales teams in the next year, it will continue to empower sales teams and customers alike to build strong connections and build brand trust and loyalty, which benefit both brand and customer ultimately.

We look forward to what’s next in 2017.