The retail industry has seen years of innovation compressed into just a few months. A standout trend is the increasing adoption of appointments and appointment shopping – and done right, it has the potential to be Retail’s lifeboat
We’ve been discussing the ‘retail apocalypse’ for several years as a slow-moving and monumental shift in the shape of commerce around the globe. However, the last three months have pushed this conversation into an immediate, dire, and industry-changing dialogue. The days of perusing the isles of big box stores have been challenged by shifting consumer behaviors and the rise of e-commerce and digital-first brands — and for good reason. Simply competing on price and ease of purchase will never be enough…e-commerce will win 90% of the time.
We’ve seen the decline of myriad brands that have painted a dismal outlook for companies that have relied on physical stores. Brands like Barney’s and Forever 21 were foreshadowing a retail tsunami that was already reshaping the landscape well into the beginning of 2020. COVID’s unexpected and sudden impact is forcing every retailer to iterate and innovate in ways that mirror the tenacity of tech startups. It has put a magnifying glass on the industry – enlarging latent issues and distorting reality, all while burning out the weakest links. Meanwhile, the focus is about to swing entirely to the shopping experience.
The rise of ecommerce is accelerating. To compete, brick-and-mortar retail must capitalize on its physical advantage and improve the customer experience.
Bringing the Future Forward
Retail analysts are saying that there have been three years of innovation in retail in just three months. Since the day that stores closed in late March this year for COVID-19, we’ve seen brands moving faster than ever to adapt and stand up curbside pickups, create online consumer education, and revamp e-commerce experiences. All of these will be key to how consumers shop in the future, but the singular trend that gives me the most hope for the industry is the increasing adoption of appointment based services and Appointment Shopping – and done right, I think it has the potential to be Retail’s lifeboat.
The technology to allow customers to visit stores by appointment can be simple – it enables retail to be nimble in a changing regulatory environment, allows for greater personalization for the in-store experience, and gives retail a data-based edge against other forms of commerce. With the right intentions, Appointment-based retail de-anonymizes the in-store experience and leverages data to tie together physical and digital experiences.
Hassle Free Experiences – No this is not an airline terminal. It’s a new store format being tested by Argos, a UK catalog retailer.
Let’s start with the obvious – value to the consumer must be foundational. What is Retail’s advantage in the post-COVID world and what value does it bring? The global pandemic is having a tendency to encourage new e-commerce shopping and remind consumers that buying new towels from their couch is easier and faster (and safer) than running to wait in line at Bed Bath & Beyond and dry out their hands with sanitizer. Retail’s clear advantage in a digital-first world is the physical space and the interactions and experiences that it can catalyze.
In the immediate future, Appointments are the operational medicine for fearful consumers, regulators, and the cautious re-opening of stores. There is immediate pain and brands need to get ahead of future outbreaks to maximize the potential to stay open. Appointments are a simple and natural solution to limit foot traffic in-store and regulate the social distancing rules that will keep consumers feeling safe. In fact, as some regions make appointments a regulatory standard, there are projections that Appointments will be as integral to the retail experience in the pandemic as pre-booking is for flights. Aside from saving consumers hours in lines (read: negative brand interaction), appointments will also enable stores to monitor consumers in-store, provide communication about contact tracing, and be flexible about changing rules and shopping times for key customers (elderly, at-risk, VIP, etc).
Retail Dystopia – The beginning of the COVID-19 pandemic saw panic buying and unsafe practices.
Know Your Customer
Beyond the operational advantages and compliance that Appointment Shopping offers during the COVID crisis, the supporting benefits of knowing your customers presents retail with a true advantage. Collecting data pre-shopping experience will open up doors for retailers to understand shopper intent and preferences before they step foot into the store. As an avid REI shopper and a member of the Co-op community, I absolutely love exploring new tents and camping gadgets and yet, stores don’t know who I am (or my preferences) until I check out – too late to make material changes to my shopping experience.
The most creative companies will leverage shopper data to make it easier to access personal shoppers or store associates, additional in-store services, and personalized attention. Other brands will leverage this data to target tailored in-store coupons to drive particular behaviors upon entering. The shopping experience itself (and not just the end sale) becomes part of the measurable omni-channel experience. Imagine the personalized digital experiences that shoppers have on a brand’s website is translated into their experience in-store. Differentiated from clienteling apps that tend to maximize the value from existing customers, Appointment Shopping opens the door to the top of the funnel conversions and the creation of brand champions.
Technology is blurring the lines between physical and online retail yet appointment shopping has yet to take off.
Lastly, the world’s best brands have embraced the discipline of Customer Experience when it comes to the online shopping experience – how consumers pack their carts and the checkout conversion funnel. However, most brands still rely on rudimentary secret shoppers and scant ‘sale completion’ metrics to best understand the in-store experience. We’re stepping into the future of retail where a brand can A/B test the retail experience (everything from the structure of customer service to environmental design of the stores) in the ways that Amazon optimizes its sales funnel. It will be virtually impossible for retailers to iterate their way out of the dust without shopper data and robust in-store measurement and optimization of the shopping experience.
With vacancy rates rising, retail rents are set to fall up to 11% this year.
Rethinking Retail Square Footage
Retailers are about to rethink their rents and what value that square footage brings to consumers. In an era when you can order curbside pickup from Home Depot and they will deliver to your car, what is the value of having 240 million square feet of aisles across their 2,285 stores?
Retail’s big advantage over digital-first commerce will always be the shopper experience that can happen on those extra square feet. With the continued shift towards e-commerce, brands will be able to use that valuable real estate to engage with consumers, build experiences, and build educational resources like Michaels is doing with their classrooms. Imagine for a moment what kind of engagement Home Depot would build if they shift 30% of their stores into a community maker space and allow consumers to use it while they are picking up supplies. With a focus on harnessing that in-person experience, brands will have an edge to build emotional bonds and long term loyalty with consumers. The moment for innovating is here, and Appointment Shopping presents a clear foot forward to build with data and iterate on that shopping experience.
It may sound nuts to rethink shopping in a time when retail is already struggling and forging its path ahead. More now than ever, it sounds crazy not to.
Interested in learning more about Appointment Shopping? Stay tuned for upcoming webinars and reach out [email protected]