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Retail Isn’t Far Enough Outside the Box Yet

Decoding the needs of a digital native is about more than tracking the latest techniques for marketing to Millennials or Gen Z, it’s about really understanding where their minds are and knowing what you don’t know about them—which most retailers are either doing poorly or not doing at all.

“There’s a seismic change in consumer behavior right now,” Lee Peterson, EVP of brand strategy and design for customer experience expert WD Partners, said during an NRF Big Show presentation in New York last month. “Everything about the consumer is different than it was before, and whatever you’re doing, you’re most likely going to have to speed it up.”

Retail is at the peak of the most dramatic shift it has likely seen since 1995, when Amazon, eBay and Craigslist landed in people’s lives.

“If 1995 was the year that changed everything, 2015 was probably the year retail finally realized it,” Peterson said.

Now, it’s more than just digitize or die, it’s facing the future of what will be commonplace by 2025—like implantable mobile devices, driverless cars, clothing connected to the Internet—and bringing retail stores up to speed.

And to do it, retailers will have to change the store, change the workplace and ultimately, change the mall.

A look at the DNA of a digital native

In surveying more than 10,000 consumers, WD Partners uncovered which retail technologies resonate with digital natives (those age 30 and under) and how they stack up with digital immigrants (those over 45).

Digital natives, for one, tend to have an “open to that” mentality—many are willing to try most things since there’s really no punishment for doing so. When asked how they felt about retina scanning to complete online orders instead of using credit cards, for example, digital natives said, “I’d try that.”

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When it comes to mobile purchases, 51 percent of digital natives are into it, compared to 15 percent of digital immigrants. Sixty-five percent of natives like buy online, pick up in store services, while 49 percent of immigrants use it. Beacon technology sits well with 43 percent of natives, compared to 19 percent of immigrants, and 55 percent of natives think a showroom concept for stores is a good idea, while only 28 percent of immigrants do.

“If you have a young consumer you could definitely do a showroom store. Try it out,” Peterson said, stressing the need for retailers to test things quickly and see what works.

Here’s who’s getting experience and retail tech right

Retailers thinking so far outside the box that their actions are almost challenging to comprehend are the ones leading the way in what’s next for retail.

Amazon has filed for (and won) multiple patents that give people pause, including a distribution center that floats in the sky and sends drones down to deliver packages within minutes.

And companies like Barber & Parlour in London’s Shoreditch neighborhood are reimaging experience entirely. The “barber shop” offers grooming options for men and women, a kitchen that functions as an all-day hangout with food, cocktails and pressed juices, and a cinema customers can pop into and catch a flick. Add to all that, visitors can buy home goods, leather goods and gifts and accessories at Barber & Parlour’s shop.

At Eatsa, the restaurant concept has been completely revised. There are no lines and no cashiers. Customers order what they want from an in-store iPad, pay for it, and then it appears in a personalized cubby with their name on it.

When it comes to changing a store, Peterson said Nike has the right idea among apparel retailers. At its new 55,000-square-foot New York store in Soho, customers can play basketball on a miniature court. Cameras surround the court to capture the shopper’s action from various angles and creates a little video of the shopper’s performance, which can be sent to them and shared on social media. For some consumers, Nike knows the majority of their purchasing will be done online, so it’s using the time the shopper is in store to create a relationship.

To change the workplace, Volcom built an in-store skate park for its employees to use on their lunch breaks, and Amazon is testing a 30-hour workweek.

To change the mall, shopping centers like Boxpark, also in London’s Shoreditch neighborhood, are creating a unique shopping experience with a pop-up mall made entirely out of refitted shipping containers. The mall’s goal was to fuse modern street food concepts with local and global brands for a one-of-a-kind buying and dining destination, and so far it has been successful.

“We have to be more open than we’re open now,” Peterson said. “We have to be faster. We have to fail fast and change things fast.”

What it really boils down to, Peterson said, is service. Service will have to change if shoppers are going to get excited about shopping again. What’s more, retail technology will have to come out of the back offices and into the store fronts in a way that improves the service offering for customers, and ideally, in a way that’s fun and convenient.

“They [digital natives] are after service. And there’s a void there. It’s easy. It’s an open market,” Peterson said. “Someone once told me all great changes are preceded by chaos. I believe that.”