By Glen Bradley, principal, Point B
How retailers are making new customer connections.
What’s in store for the retail world? Store closings, omni-channel missteps, and the inability of traditional brick-and-mortar retailers to cost-effectively compete with online channels have created a period of turmoil. Against this backdrop, multichannel retailers are working to determine the role that stores play for customers who shop across online, social media and physical locations.
The drive to innovate for competitive advantage is at an all-time high. Retailers feel a sense of urgency to seek out new concepts to connect with customers who want their in-store experiences to be engaging and entertaining. In many instances, retailers want to reach new targeted demographics or test urban or small store concepts without interrupting current stores and sales. Whether these new concepts come to life as flash retail/pop-up stores or permanent physical locations, they create an environment that allows retailers to learn quickly, test brands and concepts in real time, and collect the critical consumer data to stay relevant and drive sales.
While retailers generally know how to launch another iteration of their existing store format, most are not prepared to launch a new concept. Getting the most out of these initiatives takes new operational muscle, agility and the ability to measure success.
Retailers may be used to testing new concepts within existing stores and formats. However, as they migrate to non-permanent locations — often in unfamiliar territories — they face new complexities. Retailers must navigate a myriad of details, often without the help of centralized retailer resources normally involved in store rollouts. It takes careful planning and execution to ensure that a hypothesis can be successfully tested without getting bogged down in store execution issues.
First and foremost, retailers need clear goals and objectives for any new store concepts. Goals vary; you may want to understand customer feedback on a product or experience, measure traffic and location appropriateness, or simply gauge the sales potential of new products or concepts.
Executive sponsors must be on board with these goals and the overall approach. While the measure of pop-up retail success is often viewed differently by executives across different functions, it’s critical that members of a cross-functional sponsoring group agree with the initiative team on the objectives. This includes sponsors’ agreement on a realistic budget. In cases where the budget may not be sufficient, sponsors must be aware of what trade-offs have been made and how they will impact the initiative.
Having shared objectives with informed sponsorship paves the way for the critical tasks of execution. There is a flexible, three-step approach to making the most of pop-up store concepts. It provides the broad oversight vital to successfully executing a new concept together with the agility and analytics to apply lessons learned along the way.
The ability to cost-effectively test new store concepts is a major strategic advantage to retailers as they determine how to best test new products and use physical locations in an omni-channel world. Getting it right takes a cross-functional approach that includes expertise in real estate development, retail store savvy, and technical and process know-how. Integrating retail and real estate expertise to create new store concepts that complement other channels will help connect with customers old and new.
About The Author
Glen Bradley is a principal with Point B Management Consultants, specializing in technology, operations, and customer engagement with a focus in retail and consumer products companies.