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The rise of e-commerce, mobile shopping and digital technologies, make many experts predict that physical stores will disappear or will become 100% digital platforms.

It is true that those fundamental trends will have a direct impact on the primary function of the physical store, but the latter remains an essential part of the customer path and relationship.

In this article, we share with you several innovative initiatives, and our vision of the store of the future: a quintessentially customer-centric space, transforming client experience and experiencing a mutation in its own economic model.

 

Numerous innovative initiatives

Offering a unique, fun and tailored discovery of offer

Many innovations implemented in stores are designed to facilitate the discovery and selection.
Since 2012, the concept store Nose in Paris, specializing in perfumery, has been helping its customers to better choose their fragrance. They are invited to create their “olfactory profile” using a multi-step algorithm. Without requiring in-store visit, several flavors proposals are then made to them, based on the data they provided.

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More recently, the Uniqlo brand deployed “Uniqlo Connect” a set of digital services in its new store in Saint Germain des Prés: there is a touristic guide available on tablets, gathering the best addresses in the area, a concierge, USB terminals for iPhone loading, a Click & Collect services, and even an interactive robot: Pepper. Created by SoftBank Robotics, Pepper is the first personal robot in the world to react proactively according to its environment. Launched in Japan, and introduced this summer in Europe, Pepper is equipped with features allowing it to communicate with others, and to evolve smoothly.

Technological innovation in stores offers an array of “nice-to-have” services, clearly enhancing customer experience without replacing the traditional role of in-store sales teams.

Using technology in a recreational purpose may be fruitful: in March 2016, the brand ”123”, part of the Etam Group, deployed virtual reality helmets in 20 stores. Customers could immerse themselves at the heart of the photoshoot of the latest brand image campaign. LSA Conso interviewed on this occasion Thomas Dessallien, Head of Digital for 123: “Clients were really happy to be able to test the virtual reality helmet, just when Samsung issued his TV ad. This allowed us to bring more of our customers in store : we have generated additional traffic amounting to a hundred people per store.

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Leveraging on web traffic to dynamically push the right offer in stores

The physical store remains a key step in the buying process, which explains the stagnation of the overall share of retail sales online (about 16% of all channels according to FEVAD, the French e-commerce trade association).

Many pure players have already understood that the physical store allows them to address additional customer segments, those who are not used to frequenting e-commerce websites. This is particularly the case of Amazon, who just announced a massive incursion into the physical world, with 2,000 stores to be opened in the next two years in North America.

The complementarity of both channels goes further: growth drivers such as supply can be optimized as well. In fact, e-commerce is a real opportunity to improve in-store offer: the most desired products online store can be “pushed” through effective merchandising. Going further, identifying weak signals of a future top runner -especially using deep learning latest technologies- makes it possible to improve the overall sell-through rate. On the shelves of the pilot, brick-and-mortar shop Amazon Books opened in Seattle, the most purchased books online are thus dynamically highlighted.

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The dynamic merchandising is also what does Promovacances, through its new agency concept. This former pure player, a French online travel agency, made a notice incursion in the physical world, opening 50 agencies. Instead of traditional store fronts, featuring random destinations on paper, they set up screens, allowing any agency to push the right travel at the right time. Is Greece a popular destination on the Web in April? All right, it will now also be highlighted in agencies!

 

Rethinking each store as a “flagship” in itself, centered around customer experience

It is fascinating and refreshing to see how new technologies have pushed retail players to revolutionize the very concept of “store”. Formerly considered mainly as “a point of sale” by retailers, they had to feature as many products as possible in the same place, and orientate clients as well as possible.

Now, since their offer is more and more available anytime, anywhere and on any device -the famous ATAWAD concept- the challenge is now shifting to getting closer to the customer, and focusing on the highest value purchasing steps : product search and choice, cross-selling; while streamlining the necessary other steps such as payment or delivery.

This was perfectly understood by Sézane, French fashion success, which opened its first physical store “apartment” in October 2015. Just like a professional buyer attending a “Fashion Week” in Paris, a client can select the pieces she likes, try them, but actually completes the order on an iPad. It will then be quickly delivered directly to her home. This operating mode, which could be described as “ultimate showrooming” has multiple interests: less storage space, hence an increased turnover per sqm, limited inventory-related risks, and a refocusing of the sales team role from welcoming/replenishment tasks to client advisory.

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Note that this concept is currently being increasingly replicated. Indeed, Celio has recently opened two pop-up stores in Paris, L’Exception has opened its “digital concept store” in the Châtelet canopy in Paris. Finally Le Bon Coin, which turns 10 this year, also operates a pop-up apartment until November 19.

Example of digital feature offered at L’Exception

‘New generation’ stores can also be innovatively used to locally test new products before a more global launch, or to better understand the market. This may be with these kinds of goals in mind that Armani launched its pop-up store dedicated to cosmetics and perfumery (in Paris until 31 December 2016) or that The Webster, a famous concept store present in several major US cities, established a collaboration with Bon Marché in January 2015.

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The store of the future, more than ever, is customer-centric

The physical point of sales, far from disappearing should be soon completely reorganized around the customer experience. This is anticipated by Thomas Dessallien, Head of Digital for the brand “123”, in a 2016 interview with LSA Conso : “Our challenge is to ensure that our stores are no longer a simple place of sale, but a place where our community meets “. Whether located downtown or in peripheries, the surface liberated by a more targeted offering will undoubtedly be used to improve opportunities for showrooming, product test & demonstration. The sales teams will refocus on their core activities: welcoming and expertly advising customers. Finally, this new store model, as part of an optimized network, will enable a better control of costs and investments.

Antoine Baschiera, who heads Early Metrics, the lead agency for the rating of startups, confirms this macro-trend : “Two fundamental trends are currently emerging for AdTech and retail innovations:
1) Mass customization, as much in product/service as the customer experience, where made-to-measure standards are no longer an attribute of luxury, but become a global expectation for all consumers. Example: the startup Pollen, well noted by Early Metrics, is working on a multi-material 3D printer for small designer objects.
2) The awareness that purchasing act is just the last step within a much longer chain, that involves various on- and off-line channels. There are many examples in this field, such as startups working on push marketing in stores ‘based on available data in the pocket’ -understand customer smartphones.
The greater complexity lies in the fact that after years of opposition, these trends tend now to impact eCommerce as much as physical points of sale, hence the fact that more and more startups seek to address these issues in an omnichannel manner.

Thus, this paradigm shift requires to anticipate new demands from clients: the study “Barclays New Retail Reality”, published in November 2016, reveals that a consumer is 5 times more likely to complain on social networks, in case of poor quality of in-store service, compared to 2013 levels. Respondents to the survey also expect greater efficiency from brand CRM services: 38% of them expect an answer one hour after they complain.

To address this fundamental change, we must put back people at the heart of the selling process, introducing as much automation as possible: in-store supply management, competitive analyses on pricing strategies and promotion timing, network performance and logistics.

In the near future, it is highly likely that we will no longer speak of “digital experience”, but simply of “successful customer experience”!