When online goes offline: how big eCommerce retailers design their offline shops and what we can learn from it
Online shopping, eCommerce and mCommerce are omnipresent topics in the retail industry. Following trends within the book and press industry, brick-and-mortar retail is regularly declared as “dead”. Even though digital trends have caused a change in retailers’ business models, an extinction of physical stores cannot be observed.
72% of all customers interpret physical stores in comparison to online stores as important or very important with more than 18,000 interviews in 18 countries. The physical experience of products, a personal consultation and a consistent shopping experience are highlighed as great advantages of the brick-and-mortar businesses compared to online shops.
A degree of stagnation and saturation in certain segments of eCommerce businesses has already been reached and more and more online retailers are opening stores in renowned city centers. Amazon, Zalando, MyMuesli, Mr. Spex, Home24 and many more have all already opened physical stores that go way beyond the pop-up-store-concept.
Seamless customer and omni-channel experiences are the driving trends behind this. eCommerce retailers aim to provide a consistent, satisfying and individual shopping experience in the preferred online and offline channels for their customers. In doing so, online retailers are often substantially more innovative than their classic retail competitors. They focus on an extraordinary shopping- and service-experience of their customers, as well as a compelling atmosphere and big emotions.
How online retailers design their stores – key learnings from digital businesses
Besides some similarities to traditional stores, there are specific characteristics which the eCommerce retailers seize from their online store experiences, leading to substantial improvements compared to regular stores. Often, eCommerce companies know their customers better (due to web analyses like tracking of user habits, click streams, queries and so on) and they use this knowledge in order to design innovative stores and in alignment with the customers’ needs.
Amazon, the global digital giant, has created attention with the opening of his first projecting physical book store in Seattle, providing more than 510m2 sales floor and 200m2 storage space. The presentation of the products is only partly comparable with a classic bookstore but does much more to follow the data-driven findings from its online shop. Books are presented with covers facing the customer, reader recommendations are shown and categories are ordered on the principle of products that are commonly purchased together. Thus, online principles are projected onto the offline world. Even the product range is optimized based on the online purchases of the customers living in surrounding areas.
Mr. Spex - a leading online retailer for glasses in Germany – has transferred the experiences of customers’ needs from their online shops to its brick-and-mortar-stores. For example, the main focus of its in-store presentations represents the easy choice, consultation and arrangement of products, mainly following the shape of the head and the corresponding shape of the glasses. The pricing of the products is as well substantially more transparent compared to many pure offline players. Like within the online shop, customers know the price for the whole ‘package’ at the beginning of their shopping trip, evading non-transparent price calculations.
#edited, designed by the Otto Group, has been established as a successful online fashion brand. Advertised mainly through social media, it focuses on the social experience of shopping. The physical stores enrich this effect, as they are equipped with hashtags, QR-codes and other links trying to lead younger target groups back to its online shop.
Implications for physical retailers and important trends of offline store design
These impressive examples show how offline shopping experiences may be transformed profoundly to fulfil the changing needs of the modern customer. In order to transform their stores, retailers should intensively focus on the following topics:
Enhanced product presentation: implementing minimalistic store design and using new technologies such as virtual reality, augmented reality, live streams and digital sales support in terms of digital info terminals, dressing rooms or mirrors
Maximized personalization: customer-focused, individual product offers based on a significant customer knowledge which is achieved through the usage of CRM and analytics solutions (e.g. tracking via mobile applications, check-out systems, loyalty programs etc.)
- Seamless shopping experience: perfectly integrate and align the brick-and-mortar-business to all online and social media activities (i.e. with the online shop and “social shopping”) in order to achieve a seamless experience in retail across the entire shopping process (e.g. via in-store-navigation through iBeacons, NFC and mobile payment solutions)
Brick-and-mortar retail is facing the challenge as well as the opportunity to optimize its sales floor, completely re-design and re-establish it as an outstanding experience via digital and mobile solutions that are aligned with the changing customer needs.
Online retailers are putting competitive pressure on the physical stores on the one hand, but offer inspiring examples of how a store transformation may be successful and how it may lead to a completely new customer journey in the retail business on the other hand.
The advantage for brick-and-mortar-retailers is that they can rely on physical structures and experiences that go way beyond these of the online retailers. Therefore, we will continue to see exciting competition as to which player will be leader in the combination of offline and online retail in the short- and long-term future.