The Future of the Retail Shopping Experience

The retail industry, specifically apparel, has always been interesting to me.  I am not a “fashionista” by any means, but when I think about my favorite brands, retail brands inevitably come to mind.  When I was younger, exploring different stores and trying to figure out the shops I liked was purely defined by what my friends liked or what was considered “cool”. Now, as I have gotten older and moved out of suburban Ohio, shopping has become much different and my preferences depend on the experience, accessibility, and quality.  I have been fortunate enough to live in Manhattan and San Francisco, where shopping is still considered a fun activity there given the metropolitan atmosphere and accessibility to more boutiques and stores that are not everywhere. However, all of the additional ecommerce sites have really changed the game. Accessibility and quality can be met easily. I personally still enjoy the in-store experience, but am constantly inundated with new and interesting apparel businesses that offer some unique value proposition that takes the store experience out of the picture.

 In business school, we have certainly flushed out the idea of how ecommerce is starting to creep up on brick & mortar; therefore I am not trying to analyze Amazon or Walmart.  I am more interested in exploring “The Future of the Retail Shopping Experience” in the context of apparel. This topic will encompass retail startups and their potential threats to brick & mortar. Additionally, I want to research potential opportunities that brick & mortar stores have to stay relevant, and what current companies are doing to drive traffic to stores and enhance the store experience. While I understand we are not supposed to focus on an entire industry, I want to strictly focus on the value proposition of a few online retailers that are fairly new to the industry, but have created a lot of buzz for themselves. These examples will then help to further explore the way the shopping experience is changing and what that means for the future. An example would be a company like StichFix. This online retailer allows you to create your own style profile, sends you a box of five hand-picked items, and lets you keep what you like and send back the rest. They act as a virtual personal stylist.

Some of the questions I have on this topic are:

1)     How will companies like Stich Fix grow when there are constantly new online retailers entering the scene?

2)     Are the value propositions of companies like this sustainable based on consumer behavior?

3)     How are brick & mortar stores going to enhance their shopping experience? What have some established retailers (i.e. Gap, Victoria’s Secret) done recently?

4)     What are some predictions regarding the shift in retail in the next 10 years?

I am particularly interested in this topic for a couple reasons.  In business school, our marketing conversations, many times have sprung from the Consumer Packaged Goods industry. While we absolutely talk about Walmart and Amazon, we have rarely taken a deep dive into retail apparel companies.  Since I am strongly considering working in a retail organization if not post the MBA, then sometime in the near future, I want to understand the future of the shopping experience and different retailers’ value propositions so that I can better craft marketing strategies.

This topic is related to gathering and identifying consumer insights because new companies like Stich Fix came to fruition because a problem or need was identified. The need Stich Fix identified was for a personalized styling service with the latest and greatest trends, from the convenience of your home. Insights had to be gathered to understand that shoppers wanted some advice on style, but did not want to hire a personal stylist because this service can often be expensive and time-consuming. The sites and services associated with these online retailers have to be designed in a way that ensures the consumer experience is positive so that he or she will return to purchase again, recommend it to friends, and eventually become an advocate for the brand. There will always be a segment of consumers that will want the in-store experience; therefore design thinking is really important for retail because this shopper will inevitably demand a better experience. In order to create that experience, stores may have to think differently and really understand how the consumer is changing.

I have attached a couple of articles here that I thought were interesting and relevant to the topic. The Fast Company article points to the declining shopper satisfaction in-store (at 15% per year) and how retailers are searching for how to adapt their strategies with changing consumer expectations. It also explores how retailers need to design new shopping experiences that are more integrated, and not just relying on immediate sales but also cross-selling, impulse buys, and upselling. The NPR story gives some examples of what is happening or starting to be tested in-store to enhance the shopper experience. For example, a consumer can actually tailor the dressing room to their liking by plugging in his or her iPhone, and creating an oasis of sorts when trying on clothes rather than being rushed. The speakers then predict that stores will start to make all walls digital and continuously stream content through them. Both Fast Company and NPR talk about the idea of personalized shopping in detail, which I look forward to exploring more. The idea NPR walks through is how a consumer would be able to walk into a store and receive customized products and offers based on past purchasing behavior and other data. While it happens in an online setting through programs and algorithms, how does it work in-store? I definitely find it hard to imagine, but it sounds like a way retailers will stay relevant in the consumers’ minds. It is an exciting and scary time to be in retail, and I cannot wait to research and learn more about this topic.

Articles

Four Keys to Surviving the Future of Retail

http://www.fastcodesign.com/1662269/four-keys-to-surviving-the-future-of-retail

NPR: Future of Retail May Involve Personalized Shopping

http://www.npr.org/2012/12/13/167198009/future-of-retail-may-involve-personalized-shopping