Retail Insights

Perspectives - January 2022
By Sharon Lessard, Retail Strategy Consultant

Principle - Latest Retail Industry Insights 2022

Retail may bifurcate between convenience and experience, but brands that deliver both seamlessly will win with consumers in the future.

The pandemic has not only accelerated e-commerce and the digital transformation of retail, but it has ushered in a new set of convenience services that are here to stay.

Over the past year, for example in the US market, 40% of Americans tried a new shopping method, and nearly three-quarters of people who have tried curb side pick-up, BOPIS (Buy Online, Pick-up In Store), or delivery want to continue using these services after the pandemic ends. This presents a challenge for businesses that expected these new methods to be temporary fixes until customers could return to stores. And it requires that retail brands re-visit how they will deliver both convenience and experience to keep pace with evolving consumer expectations.

Convenience vs. Experience

A healthy tension has always existed between convenience and experience. Companies that prioritise convenience focus on delivering ease and efficiency in every transaction, even those that take place in-store. Amazon is a great example even as it extends into physical stores that are designed to limit human interaction. For companies looking to provide a more immersive experience at retail, the whole point is to engage, entertain, and envelop you in their brands. Think Nike and Disney.

Looking ahead: convenience and experience must converge. One without the other will miss delivering what consumers most want and need. 

Convenience and experience are no longer at different ends of the spectrum. Smart retail will invest in design to bring the two together to create a seamless brand experience. Retailers need to balance the rational requirements of customers – including all the convenience services that they’ve grown accustomed to over the last two years – while still connecting with them emotionally. So convenience needs to be better designed, and experience needs to deliver more tangible benefits.

Faced with an evolving consumer mindset following the pandemic, successful retail brands will need to deliver both. A meaningful and purposeful in-store experience that will enable the consumer to have a better overall brand experience - anywhere, anytime, the way they want it. 

Physical store experiences remain vital to creating differentiation for a retail brand

Physical retail is here to stay as an important customer facing channel for retail brands. Even for digital-first brands, physical retail has played a key role in their development. Whether through pop-ups, permanent spaces, or partnerships with traditional retailers, DTC brands have turned to physical retail to complement their online presence and to drive key USPs and ROIs. For established retail players, it’s a good moment to revisit your in-store experience to ensure you’re designing for the whole customer journey. This will create memorable moments that will immerse and engage while also deliver the convenience services that consumers have come to expect.

Physical + digital + human

Seamlessly integrating the critical elements of physical, digital and human is essential given the change in consumer behaviour during the pandemic. Retail brands must bring online and offline together in a fluid experience. A unified and seamless customer journey is imperative - customer touchpoints should be additive and aligned both online and offline. And the human element will need to add to the experience and embody the brand in a way that is authentic and purposeful. Employees need to be aligned and trained on how to execute the overall brand strategy + product knowledge and services benefits = retail experience.

Integrate digital so it seamlessly engages the customer

When thinking about digital within the context of retail, often the first thing that comes to mind is a screen with content (phone, laptop, wall mounted monitor/TV). Consider digital integration as making the customer journey easier, more enjoyable and in part a connector of the on/offline channels i.e., a world of access to millions of products and brand stories beyond the physical store. In addition, the growth of automation will present a unique opportunity to focus on customer needs to either create a supremely cost-effective shop, or invest in a fun, immersive and service rich experiences… or both. This will enable retailers the agility to deliver ‘smart’ retail formats that are able to be uniquely flexible in responding to local customer needs, but still feel like part of the retail brand’s community and maintain brand equity.

The critical journey is the customer’s journey

Understanding your customer mindset and why they are visiting is paramount to delivering a great experience, no matter their demographic profile. Know when people are there to get something done, when they’re there to connect with your brand, and when they’re there for fun — then build on that knowledge to deliver a memorable brand experience.

Consumer expectations have never been higher

Convenience and experience are now baseline for any successful retailer. If stores are one of many channels for retail brands to bring their strategies to life, consumers will be looking for that experience to be unique, authentic and designed with purpose. Spaces and places have been greatly missed throughout the pandemic, and people are returning to environments hungry to engage in a brand's physical community. Design an experience that makes them feel part of your brand community and you will speak to their hearts as well as their minds.