I wonder how many people understand the origin of that oft miss-used phrase of yore—The King is Dead: Long live the King! This seeming oxymoron was actually an affirmation of primogenitor—the royal succession of the eldest son when the king died. It is akin to how we in Western democracies celebrate the peaceful succession of one president or prime minister from another in an election. And it is exactly what we should be celebrating today as the death of the old brick-and-mortar store is being succeeded by the rise of new brick-and-mortar store.
With the rapid rise of ecommerce and all of its offshoots—mobile commerce, social commerce, members-only online flash sales, etcetera, there are many who have sounded the death knell of brick-and-mortar stores. And in fact, stores as we once knew them are quickly dying out. What these naysayers fail to understand, however, is that consumers’ desire for the sensory input of seeing, touching, smelling and trying on merchandise before they buy has not decreased simply because they can now research it, compare prices, and get recommendations from friends and strangers online. As Lora Cecere of Supply Chain Insights likes to say: Bricks Matter!
That message was loud and clear at NRF 2015—The Big Show. You couldn’t walk down any aisle of the massive exhibit hall without seeing multiple examples of new technologies aimed at improving the in-store experience. From tablet-based systems to help make store associates more knowledgeable and helpful to computer-controlled cameras and mirrors that allow someone to see how they look in a new outfit from any angle, or perhaps in a different color; technology for the store was everywhere.
But it would be wrong to assume that all of the new technology was focused only on improving the in-store shopping experience. In that case it would simply be the same old store dressed up in new colors. The real transformation of the store is about the many new roles it must play in the omni-channel path to purchase. Stores today must be gathering places, entertainment destinations, fulfillment centers, returns depots, and play many more roles. These new roles require a whole new look at floor planning, assortments, associate selection and training, inventory visibility, task management, clienteling and assisted selling tools, incentive programs and much more. This isn’t the same old store—far from it.
The changes also go beyond the four walls of the store. In an omni-channel world, stores are each strategic nodes on an omni-channel path to purchase. When Jenna looks on your ecommerce site and orders that little black dress for her dinner date that night, and wants to pick it up at her local store on the way home from work, it had better be there when she arrives or you just lost a loyal customer as well as the sale. Thus, the new store must be an integral part of a finely-tuned supply chain network or else today’s hyper-connected, ‘I want it now’ shopper will go elsewhere—permanently.
Of course, you’ll never achieve this integrated supply chain network, always on, total visibility state with siloed operations, channel-specific fulfillment and yesterday’s non-integrated technologies. That approach, just like the old store, is dead. The future of retail, as demonstrated at NRF, is based on a ‘synchronized network’ approach with total transparency to inventory and orders, segmented store assortments based on shopper profiles, anywhere/anytime fulfillment and returns—all centered on the customer. While delivering to the customer is the biggest driving factor, retailers also need to achieve the timeless goal of doing so profitably through this synchronized network approach. Again, the store is playing an important role in expanding and extending the ability of retailers to profitably fulfill customer orders.
Does this sound more like tradeshow hype than reality? Perhaps, but retailers such as Nordstrom’s and Macy’s are making great strides in this direction. Are you prepared to tell your CEO that your stores and network are as far along the omni-channel path as they are?
So, yes, the old store as we knew it is dead. But the new store, fulfilling its many new roles within the intelligent ‘synchronized network’ enterprise, presents many exciting new opportunities to profitably delight customers and achieve omni-channel competitive advantage. Yes, the store is dead: long live the store!