Have Brick-and-Mortar Retail Stores Become Extinct?
Brick-and-mortar retail stores are not becoming extinct. They’re evolving to meet current consumer demands, and many are knocking it out of the park.
In fact, retailers are likely to see a six percent increase in consumer spending this holiday season over last year, according to the 2017 Holiday Outlook published by PwC. This uptick will be joined by an increase in tech use during holiday shopping trips. From smartwatch apps to mobile payments, consumers plan to enjoy the best features of both in-store and online shopping.
Click to read more statistics and observations from the PwC 2017 Holiday Outlook
For Retailers, Convenience is Money
With 95 percent of adults carrying phones, retailers know their customers will be more motivated than ever by tech-forward convenience this holiday season and beyond. To respond to this growing need, companies have gotten a jump on bringing intuitive new tech into their businesses – and into their store lighting.
Gone are the days in which lighting is meant to simply keep people out of the dark. Retail stores are now installing “smart” lighting systems taking advantage of Visible Light Communication (VLC) and Bluetooth Low Energy (BLE) technology. This smart lighting allows LED light fixtures to wirelessly communicate with the cameras and antennas in cell phones. The premise is similar to satellites in space communicating with your car navigation. Each light fixture acts as a small satellite communicating to phones below. A regular layout of lights ensures thorough sales floor coverage. While the VLC component communicates only when the phone is visible, the BLE component can reach phones tucked away in pockets or bags.
“Advances in digital lighting are giving retailers more tools than ever to drive revenue, serve customers, and enhance the shopping experience,” explains Jered Widmer, Principal with The Lighting Practice. “These new technologies are exciting and just the tip of the iceberg when it comes to future potential.”
This smart lighting technology offers benefits to both the retailer and the shopper. For retailers, the data collected allows them to understand how customers shop their stores and better place products to increase sales. For customers, it can provide turn-by-turn navigation to pre-populated shopping lists, make instant requests for associate help, and find special sales and savings using location-based notifications. The BLE technology also works with exterior lighting and has potential applications to extend the digital customer experience even further.
Major retailers, like Target, are already implementing IPS technology in their stores. Target Streeterville (pictured) uses BLE technology paired with a mobile app to improve the customer experience.
In the near future, products embedded with BLE trackers will allow the products to communicate with the system. This will let retailers better understand inventory levels, locate product in dense stockrooms, and even allow customers to complete the checkout process without waiting in any lines – using their cell phone to pay as they walk out the door. Like Amazon’s new prototype of this concept, a digital shopping cart will log items customers pick up and remove them if they put them back.
Delivering More Than A Good Deal
Customers want a unique in-store experience.
In order to compete with the Internet and attract today’s savvy shopper, many brick-and-mortar stores are transforming their model. Retailers are more focused than ever on their customers’ experience. In fact, more than half of consumers surveyed by PwC’s 2017 Holiday Outlook, plan to shop at small-targeted boutiques and independent retailers.
The advantage of boutiques and independent retailers over larger stores comes from the intimate shopping environment tailored to their brand and customers. By providing one-of-a-kind experiences, large brick-and-mortar stores can increase their appeal to today’s shoppers who seek an emotional connection with their brand.
“Shopping online gets the job done, but it’s not an experience,” explains Helen Diemer, Principal of The Lighting Practice.
While many brick-and-mortar locations are increasing their appeal with in-store cafés and restaurants, others are exploring design solutions that increase customer satisfaction.
Stores with a diverse selection of products are channeling the intimate shopping environment of a boutique through themed vignette displays. These displays create visual interest and showcase related products. The themed vignettes help customers visualize how products relate to each other and more importantly to them.
Target’s recent store renovations include new LED accent lighting as well as themed vignettes. Pictured is Target’s Tribeca New York location. (Photo by The Lighting Practice)
Moving beyond products and placement, lighting is a powerful tool that is often underutilized. Lighting shapes perception and evokes an emotional response. Well-designed lighting can create a comfortable and intimate experience for customers while highlighting products, encouraging exploration, and reinforcing a store’s brand.
“Brick-and-mortar stores have the opportunity to create an environment that makes people feel special,” Diemer explains. “Lighting supports this experience; it can show off a product and the customers. Lighting can make customers feel good about themselves.”
For many customers, the fitting room is the last stop before checkout. It is the retailer’s final opportunity to sell their product, so lighting can make or break the sale. By incorporating appropriate lighting in fitting rooms brick-and-mortar apparel stores can improve their customers’ experience and increase sales.
Shoppers want to look their best; soft ambient lighting supports that desire. Indirect light fixtures paired with accent lighting provide appropriate illumination and eliminate harsh, unappealing shadows. Lighting integrated into the fitting room mirror provides a soft, direct illumination that elevates the appearance of the customer and the apparel.
Bergdorf Goodman‘s new LED lighting system uses a combination of adjustable accent fixtures, linear slots, and internally lit columns to illuminate their high-end women’s ready-to-wear apparel. The same level of care was given to the lighting in their fitting rooms, ensuring customers look their best. (photo by Andrew Lyngarkos Photography)
As retailers continue to transform their model to succeed in this highly competitive market, they must not lose touch with their biggest differentiator. The Internet may save time and provide a convenient way to purchase products, but it does not support human connection. Retail customers’ desire for unique experiences is their desire to connect with other people. By supporting human connection and developing a brand that connects to their customers’ emotions, brick-and-mortar retailers will continue to grow.