With Thanksgiving just around the corner, retailers (and shoppers) everywhere are gearing up for the post-turkey rush – pushing opening hours further and further into the wee hours of the night to lure customers through their doors first. But with online sales expected to grow 15% to $68.4 billion this holiday season (Forrester), is Cyber Monday ultimately on the path to eclipse Black Friday?
There’s certainly an underlying and intensifying industry concern that digital is cannibalizing brick and mortar – pushing in-store sales online and online sales to other (cheaper) online retailers. There’s no denying the trend but there is something savvy retail brands can do about it. As with any major industry shift – in retail or otherwise – big moments of change are scary, but can equally present opportunities to capitalize and reinvent for the future.
Here are three inventive ways to think differently about the online/offline shopping experience this holiday season and beyond:
1. Leverage learnings from an online world to drive offline sales
The growth of online shopping has a lot to do with two ideas: convenience and access. The web as this infinite, ubiquitous platform makes it easier than ever to find what you need and discover what you didn’t realize you wanted. And in one click, to get it delivered to your door overnight. For a huge population of shoppers this is an ideal value proposition – cut out all the hassle of in-store shopping: the lines, the mess, the people, the pressure. In the context of Black Friday, where people literally trample over one another to get the best deal, calm, clean Cyber Monday has it’s appeal.
However, while some shopping is about buying goods and getting on with it, there’s a whole culture of shopping that’s about the act of shopping. Being in a physical space, among other people, discovering products in a non-linear manner, finding things you never expected, trying them out live, spending time in a cramped dressing room where you can ask the advice of strangers. There’s something magical about real live shopping – perhaps more magical to some than others.
But consumers today are smart. They know how to get the best of both worlds – the physical, tactile experience of shopping in-store with the convenience and ease of purchasing it online. It’s called “showrooming.” And it wouldn’t be a problem were it not for an increasing number of online-only retailers who can undercut the cost of goods because they don’t have the large overhead costs of keeping up physical stores. Try at Circuit City; buy on Amazon… we all know how that story goes.
In this climate, retail brands can’t just continue on with old ways of doing business. For one, having a strong, user-friendly ecommerce platform that’s closely integrated with the offline sales and merchandising strategy is a must, not a nice-to-have. Even if your customers can’t get your products anywhere else today, you can bet they’ll find a way tomorrow – with or without you in the picture. Mono-channel is no longer an option in an omni-channel world.
One way that retailers are working towards becoming omni-channel is by more seamlessly integrating web with brick and mortar capabilities. Large retailers like Nordstrom and Macy’s are linking online and store inventories for greater efficiency and accuracy. The Container Store takes a page from online shopping (and wedding registries) into its stores by allowing urban customers to shop, scan and buy items in-store without having to physically take those purchases with them. Instead, they’re delivered to your door later that day at a time window of your choosing. Whole Foods does something similar with same-day delivery – taking the schlep out of urban shopping and removing the potential barriers that might lead customers to switch to an online-only option.
2. Remove the online barriers
If you can’t beat ‘em, join ‘em.
Brands like Amazon.com or Soap.com have online shopping down to a science – literally. And while it’s not realistic to suggest that all (or any) other retail brands can out-Amazon Amazon, they can at least consider how to apply some best practices to their own business. This is certainly not new thinking, but it’s still relevant – super simple sign-up, one-click purchasing, free shipping, hassle-free returns, underpromising and overdelivering on shipping expectations, transparent, consistent, and instant communications, secure payments, reliable customer service, predictive promotions…
As category by category reaches their own tipping points in the online shopping curve (for example, Warby Parker’s approach to eyeglass ecommerce), swimming against the current to maintain better margins or to keep sales in-stores will only lead to further opportunities for cannibalization – from other online retailers who do it better.
3. Redefine the role of the store
Back to the magic of shopping. If today’s consumers are increasingly using stores as showrooms, I say double down and let them do as they please. As long as you’re working to remove the barriers to purchase from an online perspective (as described above), and you agree with the premise that a sale is a sale regardless of channel, then it really shouldn’t matter if the POS takes place online or off.
Which means there’s an opportunity to rethink the purpose of physical space. Online space is (basically) free, whereas offline space – especially prime real estate space – can be quite expensive. So when brands have both (and more cost-effective warehouses stocked with inventory to fulfill online orders), why use them for the same purpose? Especially when customers have every incentive to make the ultimate purchase online.
This thought speaks to the ‘experiential store,’ or the idea of store as a marketing tool. In other words, using your prime real estate spaces to give your customers an experience they can’t have anywhere else – and certainly not online. Giving them opportunities to engage with your brand beyond the transaction. To engage with your people beyond a call center. In this way, brick and mortar stores can become social/experiential hubs that build the kind of equity and loyalty that’s increasingly hard to come by in a very crowded world. Much like Niketown in NYC or London (Nike iD), REI in Denver (REI Outdoor School), and of course – Apple… everywhere.
An interesting observation – retailers focused on children were way ahead of the curve on this – case in point: American Girl Stores, Build-a-Bear Workshops, FAO Schwarz. What all of these brands have in common is an experience-based, engaging offline strategy to get customers in stores and keep them coming back. Oh, and that they all target little kids with short attention spans probably has something to do with it.
If you consider some of the major the shifts in consumer behavior that have resulted from an increasingly digital landscape, retailers might do well to think about their customers like impatient children – more demanding, less patient, more fickle, less loyal!
As with any major industry shift – in retail or otherwise – big moments of change are scary, but they can also present opportunities to be inventive for the future. Retailers who look for ways to leverage learnings from an online world to drive their offline sales, remove their online barriers, and experiment with the role of the store will have the edge this holiday season and beyond.
Marissa Vosper is a senior strategist at Wolff Olins New York.