The New Purpose of In-Store: Experience Meets Operations

This article explores the changing face of retail and importance of creating frictionless multichannel experiences.

The pandemic forced brands of all sizes to shift to digital, but in-store retail isn’t dead. Brands are simply evolving to accommodate new shopping behaviors and maximize new opportunities to engage with customers. The uptick in brands that are adopting, or reverting back to direct-to-consumer models shows that brands are taking control of as much of the consumer experience as possible — and brick-and-mortar is just another way they’re differentiating to adapt their customer experience. Think showrooms and experiential events that draw consumers in and provide a place where they feel part of a larger ecosystem: a place for them to connect with like-minded folks; a place for a better brand experience. 

But, again, online commerce continues to drive growth for many retailers. In fact, recent proprietary data from Linnworks shows that, while online purchases year-over-year have dropped during April and May of this year, overall online order volumes are still considerably higher compared to pre-pandemic levels — demonstrating a permanent shift toward online shopping. That said, let’s look at how the shift in consumer expectations impacted brands’ business models, and how brick-and-mortar retailers are best utilizing what feels like new-found space. 

Changing Customer Expectations

As a result of the pivot to online shopping, retailers are now facing a drastic shift in consumer preferences. Once driven almost exclusively by price, today’s consumers are increasingly influenced by convenience and ease of purchase. In fact, according to a recent study from Linnworks, convenience is a top priority for 76% of consumers. However, they’re also influenced by a sense of connection. As pandemic restrictions continue to lift, consumers are ready to explore in-person shopping and 76% said they would prefer to shop with their favorite brands directly if they offered the same conveniences of an online marketplace. The crux of the challenge facing retailers today — and leading up to this year’s holiday season — ultimately comes down to enabling a frictionless multichannel experience and implementing efficient fulfillment and delivery models.

The Rise of Direct-to-Consumer 

As a result, more and more brands are focusing on their direct-to-consumer (DTC) business model — and this is no longer only via a brand’s brick-and-mortar location or direct website. Now, it can be through channels like marketplaces and even social commerce. The move to this integrated, multichannel experience is a direct result of consumers’ preference for an effortless economy: a world where one single commerce experience happens across multiple environments. Digital shopping channels — like marketplace storefronts and social media platforms — enable increased visibility and the opportunity to invite customers to shop with them directly. By bypassing middle-man retailers on the brick-and-mortar front, brands have the opportunity to optimize profits from each sale and gather consumer data to offer a more personalized experience as they expand their multichannel strategy to blend in-store and online. 

The Evolution of Physical Retail 

With this, brands are getting smarter about space as we look toward a post-pandemic world. The footprint of retail is changing and brands no longer need as much floor space for merchandise. Instead, brands are increasingly looking at brick-and-mortar locations as marketing channels and fulfillment centers to drive the level of connection and convenience that consumers now desire. From buy-online, pick-up in-store (BOPIS) to same-day delivery, the lines of commerce are more blurred than ever — and centralized inventory management is critical for getting it right. In fact, more and more brands — like Nike and Fabletics — are powering their DTC models with the seamless synchronization of tech and data across their retail landscapes.

Focusing on these new purposes for physical retail can enable retailers to deliver a more differentiated and impactful brand experience. Customers ultimately want to connect with the brands they’re purchasing from, and models such as these are going to be what drives brand loyalty in the future.

Credit: Jason Stuckey, General Manager, Linnworks