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WD Partners to NRF: Stores As We Knew Them Are Over

Wasting no time at all, Lee Peterson, EVP of brand strategy and design for customer experience experts, WD Partners, opened his presentation at NRF’s Big Show Monday saying: “Stores as we knew them are over,” followed by another clear statement to the present retailers: “Cry about it a little bit, and then get over it.”

At a seminar titled, “The Next Killer App—Stores: Winning Over the Storeless Generation,” Peterson gave a rundown on the history of stores, and how once upon a time retailers just continued to open more and more of them, before touching on today’s changed consumer.

Whereas before, all a retailer had to do was open a store, put merchandise in it and the customers would get themselves there, find what they wanted, pay and then get themselves home, the current consumer doesn’t have to do any of that. What’s more, they have to want to go to stores.

“That’s a switch in mentality that hasn’t fully taken hold,” Peterson said, adding that today, the consumer has a store in their pocket complete with signage, displays, a “cart” and order fulfillment, all via their mobile devices.

“The burden of fulfillment has changed,” Peterson said. “It’s not on the consumer anymore.”

According to WD Partners—whose clients include brands like Walmart, Gap and Target—shopper visits have fallen at 5 percent every month for the past 30 months, though retail sales have been up every month since Jan. 2014.

For the 2014 holiday season, foot traffic was down 8.5% from the prior year period, according to Peterson, and holiday store sales were up 4 percent. Internet sales, on the other hand, were up 15 percent for the holidays, and have been up by at least 15 percent every quarter for the past two years.

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Foot traffic may only have dipped slightly year-over-year, but for holiday 2013 it was down 50 percent compared to the same time in 2010.

“Whereas I had 10 [customers] in 2010, maybe in 2015, five years later, I’ll have two or three,” Peterson said.

In questioning consumers ranging from Millennials to Boomers, WD Partners heard complaints that store associates are unhelpful, brick-and-mortar environments aren’t inviting and that it’s difficult to find what they are looking for in stores.

And according to Peterson, “Retailers don’t quite get it yet.” E-commerce is becoming increasingly king and convenience is consumers’ most sought element in the overall experience.

So, for physical retailers to stay relevant in the digital age, they will have to welcome technology to enhance customer service.

Peterson said WD Partners research revealed that buy online pickup in store (BOPIS) was the No. 1 most appealing retail technology. Forty-seven percent of consumers selected in-store pickup over delivery in 2013, and last year, that number jumped to 64 percent.

And shoppers who use BOPIS do not want to go into stores. The desire among many consumers to touch and feel a product has always been a brick-and-mortar’s saving grace, but among Millennials, 70 percent said customer reviews drove their purchasing decisions, compared to a lower 50 percent who cited touch and feel as necessary.

One Millennial male said while explaining why he favored BOPIS, “I’m not patient enough to wait for Amazon.” We are living in the age of the buy now want now consumer.

Young people are receptive to BOPIS in creative ways, Peterson said. One being the idea of the combined retailer, where several stores may set up lockers in a parking lot and the consumer could just pull up, pick up and be on their way. Others noted that stores should have 24/7 lockers out front so that goods can be picked up at any time.

Drive through was cited as the preferred way to collect goods in-store, followed by curbside pickup and then a kiosk in the front of the store—whatever is quickest and easiest.

Retailers will have to start being part fulfillment center, Peterson said, adding that stores should be part fulfillment, part social playground.

The social playground notion is the idea that the shopping experience should be fun and leisurely and focused more on the experience that the product, a concept discussed heavily at this year’s Big Show.

Companies like Sephora and Patagonia have done well to create an in-store experience that resonates with consumers, as has Space Ninety 8 in Brooklyn, a new store concept by Urban Outfitters complete with a rooftop communal café to create a vibe beyond just product. In Seoul, a North Face store features a floor that suddenly disappears as consumers are standing on it, leaving them to scale rock-climbing walls and be presented with the perfect North Face gear for the environment—an experience the company branded, “Never Stop Exploring.” That, Peterson said, is an experience consumers could not quickly forget.

Argos, the U.K. toys, home furnishings and personal care items retailer, has capitalized on both the fulfillment center and convenience concepts, turning their stores into showrooms of sorts where consumers can order items via tablets and have them brought out promptly.

“These guys are fulfilling the dream,” Peterson said. “They get it, they totally get it.”

Peterson closed his talk as concisely as he opened it, saying: “Bury the thought of what stores were.”