What The Retail Apocalypse Left Out: Brick And Mortar’s Reinvention

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. 

Today’s column is written by Mukund Ramachandran, chief marketing officer at Dynamic Yield.

Breakneck innovation in ecommerce has flipped the fundamental calculus of retail and punished brands unable to adapt. With once-dominant brands such as Payless ShoeSource, Toys R Us, Sears, Kmart and Charlotte Russe shuttering their stores in recent months, there’s no shortage of headlines that support the alleged retail apocalypse.

But while plenty of brick-and-mortar stores have suffered amid the industry’s tectonic shift, physical retail is enjoying a quiet renaissance on the opposite end of the retail spectrum. As brands like Casper, Warby Parker, Sephora, Amazon and Alibaba cut the tape on new retail locations, introducing shoppers to new and immersive experiences, the truth about the much-ballyhooed retail apocalypse is becoming clear: It’s not the physical store that’s dead, but the traditional brick-and-mortar mentality.

In fact, consumers prefer brick-and-mortar stores – but these days, they also expect brands to offer them personalized services. To satisfy shoppers, a cadre of digital-first brands have started leveraging technology to bring the convenient, personalized and intuitive nature of online shopping directly in-store (note: Dynamic Yield does not enable any of the in-store personalization capabilities described in this column).

And these experiences will only become more commonplace as retail brands fight to maintain relevance, increase sales and differentiate themselves from the less digitally inclined.

Retail’s personalization opportunity

Imagine a store in which sales representatives are armed with clientele technology that can automatically generate a customer’s purchase history, enabling the sales rep to better recommend relevant products and promotions on the spot. That same store could also feature interactive kiosks, aiding shoppers in product discovery, purchase and all the way through the shipping experience.

Far from being science fiction, these solutions are gradually being introduced, delivering customers the experiential elements of brick-and-mortar stores along with the convenience and efficiency of shopping online.

The iconic beauty brand, Sephora, has long been praised for its innovative in-store experiences and offers a prime case study in how the data- and tech-driven approach of ecommerce can inspire brick-and-mortar locations to reflect the needs of the modern consumer. Its Color IQ device scans a customer’s skin and recommends relevant products based on the person’s foundation match and color key, which can also be used to generate a digital makeover guide for the shopper on how to best use each product.

Alibaba’s Hema and Amazon’s Amazon Go stores, meanwhile, demonstrate the strong growth potential for in-store personalization. Hema harnesses customers’ purchase history from Alibaba’s Alipay to deliver personalized recommendations to customers. And because Amazon Go bills shoppers’ purchases to their Prime accounts, the retail giant is similarly able to connect valuable in-store data throughout the rest of the customer journey.

Digital-first brands aren’t the only ones investing in this experience.

Eager to meet customer expectations for tailored offers and customized service, retailers like Macy’s, Target and Urban Outfitters are deploying in-store beacons that track customers throughout their time in the store, syncing their online browsing and purchase data to generate targeted push alerts and promotions that reflect their interests.

The evolution of the physical store

Such highly individualized touchpoints should be the lodestar for retailers looking to grow their market share and maintain relevance in the coming years. Brands that make smart investments in delivering winning in-store customer interactions will reap the rewards in foot traffic and revenue.

Most importantly, they’ll demonstrate that reports of brick-and-mortar’s death have been greatly exaggerated. Physical stores are here to stay – and as they become more tech-savvy, the seamless, data-driven experience that has long been the monopoly of ecommerce will open the door to even greater innovation.

Follow Dynamic Yield (@DynamicYield) and AdExchanger (@adexchanger) on Twitter.

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