Frank Poore, president and CEO, CommerceHub
Contrary to popular belief, brick-and-mortar is not dead: it’s just changing. One recent trend is the noticeable shift toward an inventory-free model, where there is a greater emphasis placed on in-person experiences which ultimately elevate the retailer’s brand. Traditional retailers are beginning to embrace the showroom concept for their physical stores—a shopper visits a store to test out products before purchasing the product online.
Although traditional brick-and-mortar retailers were initially hesitant to adopt the showroom strategy, a recent survey found that 45% reacted positively to showroom stores. Notably, when the survey focused in on the millennial view of this approach, the number jumped to 55%. These results show how important it is for retailers to focus on improving customer experience and leverage this new technique to remain relevant.
Retail Renews Its Focus on Customer Experience
Showroom-style stores provide a fundamentally different in-store experience for consumers than their traditional counterparts. Without having to worry about inventory, showrooms can be much smaller, enabling retailers to locate them in more high-traffic, urban environments. For example, Nordstrom recently launched its “Local” initiative, opening inventory-free stores around the country in key markets such as Los Angeles and New York City. These stores have been positioned as “service hubs” and are dedicated to providing unique, curated services to Nordstrom’s customers based on each geographic area’s specific needs and acquired tastes.
This unique approach has helped the retailer find a balance between shopping online and offline to provide customers with more options and to ensure positive experiences are had throughout—no matter the channel. When surveyed ahead of this launch, many of Nordstrom’s target audiences indicated their preference for online but welcomed the opportunity for a more personal “human touch” to enhance their experiences.
At the Los Angeles location, Nordstrom has a special “Trunk Club” area where men can get styling tips and on-the-spot tailoring, something that the specific market values. The location also houses a salon where customers can get manicures and pedicures. By offering these in-person services, retailers are elevating their customers’ experiences at their stores and taking advantage of they have that their online-only competitors don’t—real estate.
Bridging Online with Physical
Traditional retailers are not the only ones recognizing the importance of the in-store customer experience. Digital-native retailers like Casper, Everlane and Warby Parker have begun opening inventory-free physical stores in key markets to help bridge their online brand with the physical world. Most recently, Casper unveiled its plans to open 200 stores in order to set itself apart from other direct-to-consumer mattress companies that have sprung up online over the past few years. Built around the showroom concept, the brand new Casper stores are inventory-free and give consumers the opportunity to test out their products before ultimately ordering them online.
Another recent example is Bonobos’ “Guideshops,” which expanded its physical footprint from 38 stores to 51 this year. The e-commerce-driven retailer, which is a subsidiary of Walmart, implemented this new approach to enable its customers to touch and feel products before purchasing them. In doing so, Bonobos was able to rethink its approach, expand its brand reach and strengthen its focus on providing the outstanding customer experience the retailer is known for online.
Re-thinking How People Shop
Instead of following a traditional linear path, today’s customer journey is increasingly fragmented. In response to this shift, we will see the line between “digital” or “traditional” retailers continue to blur. With an increasing number of inventory-free stores cropping up around the country, we can expect to see physical stores introduce new and innovative strategies to provide the most streamlined and compelling experience possible for consumers.
Take Amazon Go, for example, which could revolutionize grocery shopping as we know it. The new AI-powered stores not only simplify the retail process and eliminate time spent waiting in checkout lines, but also provide a treasure trove of data that Amazon can leverage to better understand their customers.
As our beloved bricks-and-mortar stores continue to evolve to remain relevant in the digital era, we could see a better outcome than the doom and gloom, “death of retail” narrative we’ve been hearing over the past few years. In fact, this is a particularly exciting time for retail, as we’re entering into a phase where bricks and mortar is finding its place as a driver for customer experiences and pick-up and return points for online purchases, as opposed to glorified warehouses with limited inventory.
CommerceHub provides drop-ship, fulfillment, order management and content management services to retailers. The company was acquired this year by private equity firms Sycamore Partners and GTCR.
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