Interaction Over Transaction: The Key to Keeping Big Box Retailers Afloat

category: Trends

sectors: Retail

Online shopping has caused a dramatic shift in the way people shop and in what they expect from their retail experience. The change in behaviour has sparked a ‘retail apocalypse’, meaning physical stores are closing down around the globe at a rapid rate. But what does this mean for large-format retail?

Formerly popular big box retailers such as BHS and Toys R Us are experiencing a seismic adjustment in sales and as a result, undergoing branch closures and massive drops in employment. Becoming increasingly irrelevant as the popularity of e-commerce soars, brick and mortar retailers have to explore technological realms to improve the customer experience.

In-store Interaction

A key to survival for large-format retail is to monopolise on the one thing they can offer that e-commerce cannot – physical experiences. Despite receiving upmost efficiency and attributes like same-day delivery, customers still crave human interaction. Topshop discovered exactly this after their own research showed that customers favoured interaction over transaction. Subsequently, they seamlessly combined both the physical and digital worlds together to create a unique customer experience which generated 6.5 million media impressions and drastically increased footfall and sales. Using part of a real waterslide, sounds and smells of summer and a VR headset, Topshop created an immersive and memorable customer experience which won them Frame’s Window Display Of The Year Award 2018. Some of the biggest businesses in the game have recognised this shift in priorities and subsequently, set altered plans in place to accommodate this.

Angela Ahrendts, Senior Vice President of Retail at Apple is reimagining the way its stores are run to align with this generation’s shopper. The majority of people who buy from Apple buy online, however Buzzfeed explained, “CEO Tim Cook has long wanted Apple Stores to be a place for more than browsing new Apple gadgets and fixing broken ones. Ahrendts is charged with fulfilling that vision.” With indoor gardens, waterfall entrances and even removing the word ‘store’ from their names, Ahrendts is transforming the way these retail environments are being perceived – converting them in to a public place for people to visit rather than just shop.

Small Steps

Although Apple has attacked this issue head-on with big changes (which also means big investment), there are smaller changes that can be made to bring stores back into the foreground. By introducing tablets into big box retailers, improvements can be made on service, personalisation, stock options, infotainment, digital signage and payment – most importantly, these combine to provide an enjoyable and efficient customer journey. Large-format retailers have the ability to offer the best of both worlds, whereas e-commerce can only tap in to digital qualities.

According to a new report from RPC, “Sales at the UK’s 20 biggest online-only retailers have jumped by almost a quarter (23%) in the last year,” with a high percentage of this increase being down to mobile-commerce (m-commerce). According to RPC’s research, one of the UK’s most popular large-format retailers Marks & Spencer’s online sales “Were up 6%, compared to just 1% for its retail operations as a whole.” Statistics like this exemplify why physical stores are having to push the boundaries of customer experience, in order to compete with the ease of the online world.

Innovative Incentives

Introducing digital components to a store is a credible and easy way to make a big change to large-format retail. By incorporating technology into big box retailers, a variety of possibilities are available to customers with no extra square footage. Selfridges exercised this prospect with their “Imagine” pop-up store designed by architecture magazine Dezeen. A life-size walk-around digital model of Zaha Hadid’s super yacht (worth a bargain price of £300 million) was available for shoppers to explore using Bouncepad Lounge models. Taking innovative leaps like this is exactly what keeps mega-store Selfridges on the map – they created a reason for visitors to attend the store instead of going online or to competitors. Offering exclusive experiences to shoppers, that other large-format retailers cannot, incentivises customers to visit the physical store. With the relatively low up-keep cost of tablets and apps, it’s a low investment with a big opportunity.