Last week, The National Retail Federation released its 2018 economic forecast, projecting that retail industry sales will grow between 3.8 and 4.4 percent over 2017.
That’s clearly a good sign, particularly as 2017 retail sales weren’t too shabby. According to the U.S. Census Bureau, retail sales grew 3.9 percent in 2017 over 2016 to $3.53 trillion.
NRF Chief Economist Jack Kleinhenz had this to say about retail’s outlook for 2018: “As the retail industry continues to transform, retailers will leverage the new tax plan to invest in their employees, stores and new formats that engage with the ever-evolving and demanding consumer.”
So the question is: are your retail stores ready to capitalize on this growth and to please the digitally-native and demanding consumer?
It’s time to rethink the definition of shopping…
Most experts, including Kleinhenz, believe that retailers need to focus on transformation and re-imagining store experiences to capitalize on growth. Stores need to become a source of value, entertainment and joy for consumers, and ultimately, a point of differentiation for their brand.
One way retailers are reinventing their stores is by breaking down the barriers between the brick and mortar and online realms to create immersive and digitally connected in-store experiences.
According to Laura Davis-Taylor, Co-Founder of The High Street Collective, and contributor to Aptos’ eBook: A New World of Brick-and-Mortar, here are the five main attributes of highly-successful stores:
- Contextual: Retailers must think through what’s happening with people in context to their location, category and needs, ensuring that they reduce the friction to complete the journey or give them a little moment of fun.
- Curated: Shoppers have become trained to expect retail to accommodate their personal tastes and preferences.
- Engaging: People must be comfortable in the environment, encounter things that are new and/or novel, be able to touch, taste, try out or try on things, and ultimately it must be a rewarding experience. However, this does not mean that every single moment of the store has to deliver on this promise, as some categories are functional and just need to be “easy” to get in and out of successfully.
- Emotive: Mirror neurons in the brain — stimulated by emotional connections — trigger a dopamine rush. And this rush drives dollars, loyalty and trips.
- Differentiated: Shoppers determine which store to visit based on either convenience or a desire for a specific experience. They seek to get a fix in a way that immerses them uniquely into the brand and is relevant to their unique tastes and desires.
Commit to Reinvention for Long Term Retail Growth
Digital transformation and change in retail is no longer coming … it’s here. It’s been almost 30 years since the modern Internet entered our lives. Retailers no longer see consumer technology in the store as a threat. Instead, digital technology inside the store is now viewed as an opportunity to better engage and convert in-store shoppers.
From the outbreak of the digital revolution, traditional retailers and internet brands have been in competition to create a better community for their customers. The key to differentiation is looking beyond the complexity of digital to drive better organization, strategy and transformation management.
Will it be easy to keep up with rapid change in retail? Not likely. But doing so is critical if you want to thrive in 2018.
Editor’s Note: Aptos recently polled seven retail industry experts for their perspectives and prescriptions for creating store experiences that engage and convert modern shoppers. Those conversations have been published as an eBook, checklists, a podcast series and more, all of which are available at The Retail Experience Project.