Building a Store of the Future? Read On!

A store of the future should always be customer-first, open to new experimentation, and have a fluid and dynamic support system, at least according to Albert Vita, director of in-store experience and visual merchandising at The Home Depot. Vita addressed the topic during a conversation with Zivelo CEO Healey Cypher at the National Retail Federation's 2019 Big Show in New York City earlier this month.

And having a dynamic support system is especially important.

When it comes to innovative stores or stores of the future, “it’s so important that you ask, ‘What's our supply chain of the future?’" Vita said. "What's our marketing department of the future? What's our inventory planning and replenishment team of the future? Our e-commerce, IT, and even HR of the future? My point here is that the rising tide of innovation needs to lift all boats."

Vita went on say there are three powers retail executives should keep in mind when finally deciding to embark on building a store of the future.

The first power, he said, is the power of questions. “The in-store design experience will never exceed the quality of the underlying questions you're asking,” Vita said. “It’s so important that you start with the right questions.”

The second power is the power of mind-sets. “There are mind-sets of abundance and mind-sets of scarcity," noted Vita. “If you have a mind-set of scarcity, you focus on your competitors, on protecting what's yours and protecting your market share. But if you take a step back and actually try to work on developing a mind-set of abundance, it enables you the possibility for a 10x breakthrough instead of an incremental 10 percent improvement."

The last power, Vita said, is the power of values. “The quality of the store of the future or in-store experience will never exceed the level of how grounded you are in your company's values,” said Vita. "For example, if you were to create a store of the future, what value would you want to bring to life inside the store? What values would you want it to ooze?"

In addition, Vita said there are three superpowers that retail executives should be thinking about when building a store of the future. They include the following:

• empathy, or being emotionally aware of what your customers are going through as they shop your store;
• humility and the absence of ego when thinking about how you communicate with your employees and customers; and
• love, or making all technology decisions based on genuine affection for the associates and customers you're ultimately buying the technology for.

"I don't know how many sessions at NRF you came to thinking you would be talking about love," Vita joked, "but you're in one now."

Also, when planning for a store of the future, it's important to think about measuring the results of your experimental store in a new way. For example, while traditional retail metrics such as sales per square foot or gross margin return on investment (GMROI) are certainly valuable, a more holistic approach to assessing innovation should be considered in these instances, Vita said.

"If your company is going to build a store of the future or some sort of new, innovative in-store experience that you've never done before, doesn't it stand to reason that you might have to measure it in a way that has never been done before as well?" Vita asked the audience.

So what are some ways to holistically evaluate in-store innovation? Vita suggested using customer intercepts, such as in-store cameras or analytics, to measure as your customers are walking through the store. "All things VOC, or what we call ‘voice of the customer,’ are things you want make sure you capture," Vita said. 

Also, spend time talking with your associates as well. "Who better than your store associates, who are there every day on the front lines, to know if a certain innovation is working or not," added Vita.

Lastly, make sure to measure cross-channel metrics. "Even though we might have created a store of the future or in-store innovation … there might be other metrics that may be affected by what you did in-store," said Vita. "Supply chain metrics, for example, or online. Doesn't it stand to reason that if we create a store of the future in a certain ZIP Code that it would change the online behavior of the ZIP Codes within that store?"