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

experience.

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.