This is a question that a lot of people are asking these days. Retail has been on a steady decline over the last decade. This is the result of a combination of factors:
- Rise in ecommerce driven by improved technology and customer adoption
- More online only brands without a physical footprint, as well as a shift in focus for traditional retailers to online sales
- Rising rents and labor costs make physical stores less profitable
It makes sense that as consumers do more of their shopping online, retail stores will see their sales decline. This trend is not just affecting one type of product or industry, the impacts are being felt in groceries, electronics, clothing, toys, etc.
So what are stores for in 2018? Is it possible that there will be a future with no stores?
The answer to that second question is a resounding “no”. There will continue to be physical stores, they just might not resemble the physical stores that we’re used to today.
For an example of the future of stores, we can look at a few of the more forward-thinking brands in the retail space.
- Amazon, after establishing itself as an online store for everything, is using their brand power to establish offline stores as well. First, they bought Whole Foods as a foray further into the grocery market, giving themselves a real-world footprint to sell Amazon products and offer convenient pickup locations for online customers. Then, they opened their first chain of physical bookstores, which feature far fewer titles than more traditional bookstores, and incentives to try and buy online.
- Apple has been an active player in retail for many years. Their store philosophy and layout put trying and learning center stage. The Apple store is most similar to the car showroom, offering customers the ability to “test drive” Apple products and get answers to their questions.
These examples of digital-first companies show us what the future of stores might look like – physical stores as a showroom for online companies. This type of store is aimed at getting the hesitant online shopper to purchase items they might like to try before they buy.
In other areas, Walmart and Nordstrom are experimenting with personal shopper models. They are treating stores as service-focused experiences, offering hands-on assistance to get people in the store.
Nordstrom specifically, plans to develop stores where customers can browse styles and try on clothes with the help of a stylist. The kick is, the clothing that those customers will buy will be shipped from the warehouse. The store might be where the sale happens, but the inventory is not housed in the store itself.
The Future of Stores
In order to succeed in retail in 2018 and beyond, brands must think differently about why they have a storefront. We must give customers a reason to visit us in person, recognizing that it’s much easier for them to shop online.
This might mean special pricing, innovative service, tests and trials, etc. Virtual and augmented reality will certainly play a role as well.
Whatever it means, there must be real value to make it a worthwhile investment of our customers’ time. Otherwise, it’s not worth having the store in the first place.