As seen on MarketWatch.
When Amazon.com Inc. unveiled the video for its new Amazon Go convenience stores, many on Twitter felt they were getting a sneak peek into the future of stores. Highlighting its use of technology like artificial intelligence, Amazon presented viewers with a vision for brick-and-mortar stores that is a departure from what shoppers have come to know at the local mall.
Shoppers check in with their Amazon Go apps by scanning their phone on a kiosk and simply start shopping. The technology tracks what’s being purchased and, without stopping first at checkout, sends a receipt through the app after they leave the store.
Online retailers are increasingly setting up shop in brick-and-mortar locations. However, they have liberated themselves free from customary store rules, giving them the flexibility to create the kind of in-store experience that they hope will drive traffic.
“Even as e-commerce and home delivery emerged in the late 90s to present a new shopper expectation of instant gratification, the approaches to merchandising in physical retail have not fundamentally changed in 100-plus years,” said Justin Behar, chief executive of retail data and analytics company Quri.
Nowadays, consumers are focused on experiences over stuff, which is tough for companies that specialize in selling stuff. Retailers are trying to give shoppers a reason to peel themselves off the couch and head to a store. That’s not just a matter of more bells and whistles, but rather fashioning a shopping experience that fits the lifestyle of the shopper.
On Tuesday, Rent the Runway, a fashion company that allows subscribers to rent a rotating wardrobe, opened its new New York City flagship store. The company has six other stores in places like Chicago and San Francisco.
Of Rent the Runway’s six million members, 90% are working women, according to company data. When it launched in 2009, many of the outfits rented were for special events. Now, work wear is a big area.
A third of rentals are for same-day wear. About 16 % of orders are picked up and dropped off in stores. Using the concierge feature on the Rent the Runway app, users can chat with a sales associate and have items ready for them when they arrive. Or, if they can’t make it to the store, items can be sent using Uber Rush.
“We want to get you in and out of the store in whatever time you’re willing to give us,” Rent the Runway Chief Operating Officer Maureen Sullivan told MarketWatch during a tour of the new store.
Making shopping a time-efficient task is one of the things traditional retailers can learn from this new breed of brick-and-mortar store. Note the first guy in the Amazon Go video who walks in and out of the store in about 10 seconds.
“Putting me in control of how much time it will take to get out of the store and how to organize my life is a value add,” said Brendan Witcher, principal analyst at Forrester. “Companies like Amazon and others are challenging what retail should be and can be.”
Retailers like Macy’s Inc., Gap Inc. and Guess Inc. are rethinking their brick-and-mortar footprint, part of an effort to become the “omnichannel” operations that modern retail requires. But reaching that goal is about more than just rationalizing the number of stores they have.
“Traditional retailers need to start becoming customer obsessed,” said Witcher. “Today retailers need to take a step back and look at the customer journey and ask, ‘Are we enhancing that customer journey, creating value, consistency and convenience?’ By removing things that add no value, in essence you actually add value.”
Bonobos, an online men’s apparel retailer, has 29 “Guideshops” across the country with a Nashville location coming this month. At the Bonobos store on Madison Avenue in Manhattan, one goal is to be hands on while using technology to personalize a shopper’s visit, said Chief Revenue Officer Erin Ersenkal.
The company never intended to have actual locations. “What we discovered, which is pretty obvious, was there are some customers who do still like to try on and touch things before purchasing,” said Ersenkal.
Besides that, if you build a store where the shopper feels like a VIP, they will come.
“Because orders are fulfilled through [the website], we’re able to focus on providing every customer with a unique and personal experience,” Ersenkal said, highlighting the company’s iOS system, created by Tulip Retail, a mobile platform that offers “a more seamless checkout experience.”
Perhaps the key to the modern store is simply finding a way to get rid of the queue at the register.
“People don’t walk into a store saying, ‘I hope I spend five minutes in a checkout line,’” said Witcher.