The Reinvention Of The Store: Let Online Do The Heavy Lifting

Photo by Museums Victoria on Unsplash

This pandemic has had many effects on retail, from closing stores, a rapid shift to online, to a completely new customer behaviour. But one thing which it has perhaps unexpectedly shone a light on is the absolute importance of having a robust and healthy store estate.

However, at first sight, that might not be immediately obvious. According to McKinsey, during 2020, it took just eighty-four days for ecommerce penetration to increase from 16% to 33%. In other words, growth equivalent to the previous ten years.

However, in his new book, Retail Recovery, retail author, Mark Pilkington says that, “online takes the strain of the transaction to allow the stores to focus on the secret sauce”.

But perversely, that secret sauce might actually be in supporting the online operation as it is generally 40% less expensive to fulfil from stores as it is from a centralised distribution centre. Which in turn raises another key trend, and that is, today, if you want to serve your customer, you need to go to where your customer is.

Seismic shifts are occurring which in turn means that the store will be the ultimate incarnation of the brand. Tightly woven into every aspect of the business, digitally enabled, the secret will be knowing which channel to push and when.

The Future’s Bright

So, what does all this mean for the future of the store? One could be forgiven that the outlook is bleak to say the least, but in reality, the contrary is true.

We have known for years that in many countries, retail has become over-spaced and that a reduction in overall square footage was inevitable. But this shouldn’t be interpreted as a sign of distress. More a sign of pruning to allow for future growth. And that means digital growth.

And the good news is that one outcome of the global pandemic is that the CIO is now far better placed to influence the CEO than ever before, because largely, they have got the business through the crisis, and the CEO recognises this.

According to Gartner, in their 2021 CIO agenda report, “CIOs have been trying for years to convince senior business leaders to modernize and take full advantage of technology. Now, many roadblocks have been removed, and the majority of boards are prioritizing these initiatives”.

And this is where trusted technology partners such as Software AG come in. Intimately understanding the challenges now facing retailers, they are perfectly placed to support this much needed digital enablement of stores, integrating technologies such as IoT and robotic process automation (RPA) with existing systems and processes.

The Store Is Dead, Long Live The Store

Long gone are the days of transactional store selling, measuring sales per square foot and many more, now irrelevant, metrics. Stores will assume new roles, either becoming fulfilment hubs or experience centres. And perhaps the most exciting incarnation of the latter is opening at Westfield London in late September.

Situ Live claims to be, “the place to discover and choose the latest and best innovative products designed to make life better”. It will carry no inventory and you can’t purchase direct from them either. But what it does provide is a means to interact and try all kinds of different brands and products in live theatre settings.

All of a sudden, rows and rows of static rails and shelving will be rendered obsolete. But one ingredient which all stores of all types require more than ever is great customer service. And this means equipping store staff with the means to deliver it.

Rather than becoming an outpost of the business, weighing it down and preventing digital progress, the store is set to become the hub of the brand and of the customer experience. As Boxpark boss Roger Wade once famously said, “online is like watching fireworks on TV”.

Having a great app and a super sleek and agile front end is all very well, but now, more than ever, without an equally digitally enabled store estate to support it and showcase the brand, all the digital enablement in the world cannot create that unique human interaction that stores provide.

Call it engagement, interaction or theatre, the secret sauce of any retailer lies in the physical. And long may that continue.




Global Industry Leader Retail at Software AG, founder Retail Reflections, best selling author, former Forbes contributor, global retail influencer.

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Andrew Busby

Andrew Busby

Global Industry Leader Retail at Software AG, founder Retail Reflections, best selling author, former Forbes contributor, global retail influencer.

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