Retail Brick-and-Mortar Revitalization in the Digital Age

The digital disruption of retail and commerce is transforming retailers' customer interactions. It's evolving into a far more flexible, seamless omnichannel fulfillment model, which is critical for retailers' continued success, viability and relevance. Online and mobile commerce has grown significantly in size and scale, leading to the misguided perception that brick-and-mortar stores are becoming obsolete. Rather, it's simply become more important for retailers to revitalize the in-store shopping experience in a way that's compelling, interesting and personalized for an increasingly empowered, informed and socially connected consumer.

The Brick-and-Mortar Store Still Matters
There is and always will be an emotional connection between the consumer and a retailer's products, and that's no different for modern customers with the convenience of mobile shopping, diverse product availability, competitive shopping, online reviews, social media, fulfillment options, and more. Consumers overwhelmingly express the need to see and feel products before they purchase. This tendency explains why 95 percent of all retail sales are either captured or influenced by the store.

In addition, consumers in our age of instant gratification want to leave the store with the product in hand. Interestingly, 78 percent of consumers still want to have the option of shopping in-store, and when they do they spend six times more compared to online. Consumers crave an entire brand experience, and this emotional connection is very important to recognize.

As advanced mobile technology drives and enhances the overall in-store experience, retailers must ensure that it contributes to the emotional and interactive experience rather than detracting from it. Amazon.com, Wal-Mart and other leading brands have permanently changed consumers' expectations of retail companies. The future of retail is to not only take place via mobile devices, but in any channel the consumer chooses (e.g., picking up and returning products through different channels). Retailers that do this successfully empower consumers to shop and move seamlessly through both digital channels and stores.

Product and Service Innovations Are the Key to Success
Long-standing successful retailers must grow, innovate and embrace the "retail revolution" if they want to remain competitive and relevant. Brands should focus on their core expertise, while striving for more through product and assortment diversification. Additionally, offering a personalized shopping experience will help retain and acquire consumers. Through product and assortment innovations and unique in-store experiences, brands can meet the challenges associated with the digital disruption and online commerce revolution.

Revitalization Through Improved In-Store Customer Experiences
Through a blend of digital and physical improvements, several prominent retailers have succeeded in improving the in-store shopping experience. Neiman Marcus, for example, has enhanced its stores with a pilot of "magic mirrors" and interactive retail tables. The retailer has also improved the functionality of its mobile application called "Snap. Find. Shop.," in which consumers photograph a product and the application's image recognition technology displays similar items available for sale.

This year, Sephora introduced its "Innovation Lab," which will serve as both a digital think tank and a portal for developing digital thought leaders. Company leaders are working aggressively to develop ideas to fit shopper behavior both now and in the future. Additionally, Sephora rolled out four new mobile initiatives, including a virtual beauty makeover and an augmented reality application.

Brands should follow Neiman Marcus and Sephora's lead in their commitment to transforming the customer experience, both in-store and online.

Wearable innovations like the Apple Watch will fuel further in-store transformations as the opportunities for omnichannel strategy increase. The key component for Apple's store locations has been translating its inspiring product videos and executive presentations into operational excellence and bottom line growth. Apple has developed industry-leading strategy over many years, smoothing out the omnichannel shopping experience. The company's brick-and-mortar success has given Google and Amazon a road map to follow with their own physical retail stores.

Brick-and-mortar stores are here to stay, as evolving consumer tastes and shopping methods lead to in-store transformations and innovations. Leading retailers have risen to the challenge by recognizing that these changes are a critical step not only to enhancing the omnichannel journey, but also to deepening customers' emotional connection to products. This connection between brand and customer is a fundamental part of retail and the shopping experience. Those retailers that effectively leverage the innovative ideas, technologies and in-store customer experience, while staying true to their brand, will thrive in this new world and attain the Holy Grail: customer loyalty.

Brandon Rael is a master practitioner with North Highland, a global consulting firm.