Retail Isn’t Dead, Mediocre Retail is Dead

In a new era of retailing, the context of customer service has been transformed toward the emotional behavior of the shopper. Although many consumers have been changing the way they shop toward a more online-centered experience, brick-and-mortar retailers still have the opportunity to refocus and reimagine to continue to bring customers through their doors.

As evidenced by its strong Q4 2017 results, on top of a year that had already exceeded expectations, Home Depot has found the necessary processes that are key in driving consumer engagement, making it a perfect example of a “smart” retailer.

Smart retailers are effectively competing along two dimensions:

1. rethinking how to use the store format to create experiences for customers, and
2. creating seamless omnichannel experiences across apps, e-commerce platforms, social media and in-store.

Throughout the past year, Home Depot has introduced in-store solution centers, which provide a space for customers to get answers to questions about home improvement projects. By offering these test centers, Home Depot can analyze what customers are shopping for and asking about, along with getting valuable input from employees into customers’ needs.

Nordstrom and Sephora are other retailers that are demonstrating the power of functioning “smartly.”

With Nordstrom Local, Nordstrom is rethinking the typical store and creating a small-store format that doesn't carry inventory. Rather, it curates a social environment that includes styling, tailoring and manicures, all in the service of creating a pampered experience for its customers.

Sephora is by far the gold standard in delivering a truly consistent experience across all its properties. The company has celebrated both the pre-sale and post-sale experience via user-generated and expert/celebrity videos that share how-tos for creating the perfect looks, as well as "Sephora Haul" videos that celebrate the arrival and opening of a Sephora order, which often includes surprise samples in addition to the products ordered.

Standing Out by Reconsidering Outdated Metrics

Home Depot has also been successful in transitioning metrics for measuring store success to include using new data, including impact to brand impression, digital purchase intent, inspiration per square foot, etc.

In the new world of retail, companies need better ways to measure the impact of the customer experience because a visit to the store can be effective even if the sale isn't immediately closed. Retailers need new ways to capture that impact beyond traditional methods, as well as better align the customer experience.

In order for them to keep up, an interesting evolution has come to retail.

When brick-and-mortar stores first pursued e-commerce, it was usually run as an entirely separate operation, which created a jarring experience online and presented a brand that was often unrecognizable to customers.

Today, an integrated online and offline strategy, across a variety of channels and touchpoints, is essential for ensuring a brand is consistently represented to the customer across formats. Retailers that are able to most effectively bridge these gaps will likely see gains across both in-store and online.

Matt Valle is the senior vice president of consumer products and services at Magid, a consumer-centered business strategy and custom research company.