29 Dec 14 Industry Insights
Following the exponential rise in online shopping and m-commerce, many have solemnly predicted the demise of high street shopping as we know it today.
What am I supposed to do with my friends now?!?
But in recent years, we have seen more and more established e-commerce businesses –such as Etsy, Amazon and Bonobos – tap into the previously unlocked possibilities of bricks-and-mortar.
So what has prompted this unexpected twist?
A recent survey that looked at the shopping habits of Generation Z in the US found that just over two thirds still prefer to shop in stores for clothing and shoes. This makes sense, as purchasing online comes with a number of disadvantages including inconvenient delivery times, delivery costs, the risk that the product isn’t fit for purpose and a risk of sharing bank details online.
For many, clothes shopping isn’t just about acquiring new items - it can serve a deeper psychological purpose. According to Psychology Today, shopping can help ease people through tough transitional periods in their life, boost confidence and creativity, connect with other humans and alleviate stress.
After all - when the going gets tough, the tough go shopping
Sure, we’ve all indulged in some online ‘retail therapy’, but I think most of us would agree that the in-store experience amplifies those positive effectives. It stimulates more of our senses, involves human interaction and we can carry our new purchases home right away.
Basically, we’re all still pretty touchy feely when it comes to clothes shopping, even in the digital age.
With e-tailers finding it increasingly difficult and expensive to get the attention of potential online customers, appearing offline – even for a short period of time – opens up a window of opportunity to dramatically boost brand engagement and loyalty. In addition, it offers an opportunity for e-tailers to better understand their customers and interact with them in richer and more innovative ways.
Pushed by intense competition, brick-and-mortar stores have also woken up to the fact that they need to appeal to digital natives by using technology to make shopping a more pleasurable, vibrant and exciting experience by integrating digital technology and providing excellent customer service.
For High Street landlords with empty space to rent as well as online start-ups this trend is great news.
There’s enough demand in this space that tech startups such as Appear Here have grown to connect shop landlords and e-commerce start-ups and make the process of renting a pop-up or permanent shop easier and more flexible.
Pop-up shops like the those found at Shoreditch's Boxpark provide a convenient and flexible way for brands to showcase their products to the public for a limited amount of time. This creates a buzz and expands their customer base as it allows shoppers to touch, feel and try things on – ultimately finding a deeper connection to the brand.
Boxpark, a shipping container and pop-up mall for independent and global, fashion and lifestyle stores and cafes
For new e-tailers, particularly those with upmarket price tags, this is a crucial way to develop consumer loyalty. Customers might be particularly hesitant about spending more money on something that they have only seen online if they know little about the brand or are unsure how terms such as organic, fair trade, artisan or recycled will affect the quality and feel of the item.
Etsy, an online marketplace for handmade and vintage goods, launched a pop-up store called The Etsy House from the 5-7 December to showcase and sell a curated collection of some of the best products from Etsy sellers across the UK. Using technology from Vend, a bespoke software management company from New Zealand that works with UK payments company iZettle, Etsy was able to bring online retail offline. In-store sales software was run on iPads, making it a smooth and straightforward consumer experience.
The Etsy House
The initiative was a great success: The Etsy House attracted 7,500 visitors over the weekend, and received considerable attention from the press and social media.
When you look at retailers who are thriving in this environment, it’s the brands focused on delivering a strong customer service experience. With everything becoming digitalized, in-person interactions are more valued and meaningful.
Unless you're this guy
A physical store can also create a sense of community by forging connections between customers, not just between the customer and the brand.
For example, Rapha, which started as an online business in 2004 selling high-quality cyclewear, opened its first store, or “Cycle Club” in San Francisco 3 years ago and now has branches in London, Osaka, New York and Sydney.
Rapha's Cycle Club in London
In addition to browsing the latest Rapha products, customers can relax in the café, watch live screening of road races or attend exclusive exhibitions and events. The stores were a big hit as they were able to showcase their clothing whilst offering a place to enjoy cycle culture and meet people with a shared passion for the lifestyle.
Back in October, rumours were circulating that Amazon would open its first bricks-and-mortar store in its 20-year history, and in one of the most coveted retail spaces in the world: mid-town Manhattan, between the Empire State Building and Macy’s flagship store.
Many were sceptical after hearing this announcement. The whole point of Amazon is the convenience and infinite selection made possible by online shopping, right?
And also, how would you fit all this into a store?
The rumours turned out to be true, although Amazon has made it clear that this is an experiment (although retail experts such as Robin Lewis predict a national roll-out in future). At the moment, the store still mainly functions as a small warehouse, allowing customers to pick up and return products at the store to make the shopping experience more convenient for those living and working in the Big Apple. Given its premium location, however, the store also serves as a giant advertisement for Amazon’s online operation.
However, it’s clear that ever since Amazon started selling more than books the company has been trying to evolve in ways that extend far beyond the online version of catalogue shopping – so we can expect Amazon has bigger ambitions for its retail operations.
Net-A-Porter dipped its toes into brick-and-mortar with a brilliant piece of experiential marketing in September 2011. To celebrate Fashion's Night Out, NET-A-PORTER collaborated with Aurasma to create an augmented reality pop-up store that allowed customers to scan pictures of products on the wall using their phones and then buy or win the items.
With the Window Shops concept Net-A-Porter found a way to contribute to the buzz of Fashion Night Out that was true to their brand by creating an innovative shopping and browsing experience that bridged the divide between traditional and online retail. It’s unknown whether Net-A-Porter will be opening a physical store location, although we certainly hope this won’t be a one-time occurrence.
It’s clear a new model of retail is emerging with brands integrating new digital technologies with physical retail to connect with consumers the minute they walk past the store windows to offer a more immersive, personalized, interactive and convenient shopping experience. Down the road, we expect more technological advances to further bridge the digital-physical experience gap and embrace retail theatre. But we’re not going to talk about that now. That’s for a future post.
Written by Izzy
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