Experience Centers vs.Traditional Retail stores
Statistics suggest that E-commerce is growing 3x faster than traditional retail.
While 51% of consumers prefer to shop online, 49% would rather go to a store.
To most of us, this picture might indicate that the brick and mortar stores are
spiraling down and sooner or later reach the endgame.
Indeed the Marketplace is going under a complete transformation but is this
an end to Brick and mortar?
Well, to a lot of you the answer to this question might seem pretty simple. But
today I am here to give this subject a different perspective. A perspective of
feel-touch-know, and buy. Yes, you heard it right, an experience store.
2017 turned out to be the worst year on record for traditional retail stores. More
than 6,700 stores announced closures. By the end of 2017, the number raised
up to 6,985. Online retailers have been replacing the brick and mortar stores
for a while now. And to add to it, the pandemic has shut down businesses and
traditional retail stores to a great extent. By now we know, that the trend will
continue through 2020.
In the age where top e-retailers like Amazon are enabling people to purchase
products with a tap of a button, for the brick-and-mortar retailers stepping up
their game has become the need of the hour. The only solution to this is to
offer people experiences that they can’t get online or while scrolling through
their phones.
With that very thought began the idea of experience stores. By the end of last
year, Samsung announced to open its first Bay Area Samsung Experience
Store in the heart of Silicon Valley. Sources quote that this fourth US store will
be an "everything" hub to tie in customer service and tech support with
Samsung's vast empire of gadgets as the world's biggest phone and TV
maker.
"We created Samsung Experience Stores to give Galaxy fans more of what
they love -- the chance to experience our latest technologies in-person, with
engaging product interactions and personalized care services."
- Samsung
Following the trend, Microsoft last month announced its plans to permanently
close all of its retail stores in the US and around the world, except for four
locations that will be “re-envisioned” as experience centers that will no longer
sell products.
A source with knowledge of Microsoft’s retail operations told The Verge that
this plan was initially in place for the next year, but had to be accelerated due
to the COVID-19 pandemic.
For years, we have heard about the decline in physical retail stores and the
rise of E-commerce. However, with 52% of the Millenials spending on
experience related products, the rise of experiential stores is on the cards for
the retail industry.
With mesmerizing retail experiences, retailers will be able to provide
customers with fun and quirky experiences that elevate shopping to greater
heights. The retail industry is shifting its attention from a features-and-
benefits approach to anchor on immersive shopping and customer
With that, one thing has become pretty clear- To be successful; retailers must
offer consumers a desirable retail experience which will in turn drive sales.
The retail industry has been ever-changing. Ecommerce however shook the
brick and mortar to the core that in order to revive itself a disruption of
experience stores followed. The waves of change don’t necessarily eliminate
what came before it, but it realigns the picturesque and redefines customer
expectations.
For the retailers relying on earlier formats, the options narrow down to either
adapt or die out.
Quoting Charles Darwin here-
“It is not the strongest that survives, nor the most intelligent, but the one who
has the ability to change.”
Traditional retailers live and die with changes in the same-store and that was
fine until online sales reached from 2-3% to 15-20%. If the traditional retailers
don’t adapt now the whole system will soon fall apart.
If you are a retailer, ask yourself, ‘What should I do differently today if 20% of E-
commerce sales will soon come from digital retailing—and that 80% of my
sales will be heavily influenced by it? Should I be opening any new stores at
all? And if so, how different should they be?
The challenge for a retailer today is to create innovations that bring the vision
to life, wowing their customers with experiences that online stores will never
be able to provide and generating profitable growth. Every other retail brand
today is focusing on building its own experience store for the convenience of
its customers.
What we are observing today is only the beginning. Customer expectations
are changing and offline retail will continue to grow when they are digitally
transformed. Experience stores will be reaching new heights and fulfilling
further customer expectations by providing them unmatched experiences.
With the experiences store taking the charge and E-commerce rising to the
sky, do you think the traditional retail stores will soon be history? Only time can
tell.