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Amazon Shows How Brick-and-Mortar Can Make a Digital Comeback

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Amazon’s recent decision to open large department-store-like locations might come as a surprise to some, especially given all the pandemic-fueled chatter around digital-first and online shopping.

Behind this decision is an omnichannel strategy that begins to see in-person shopping as an extension of the company’s digital channels. In other words, Amazon is embracing a hybrid in-person, online shopping model, where in-person shopping is considered its own channel.

Amazon’s goal is to fuse the online and in-person shopping experience together. Customers still want in-person shopping experiences, but they also want to enjoy the same customer experience that is offered online.

These stores will primarily sell clothing, household goods, and electronics. The reason? Despite the options available online, customers still want to try on apparel, test out furniture, and see how tech works before making a purchase.

As to what this means for other retailers, they will need to think through how to integrate their digital and physical presences seamlessly, so that both experiences are providing value to customers. With so many delivery options available for online shoppers, visiting a store  in-person must be a worthwhile time investment. If new retail innovations aren’t driving value, then they are probably not worth it.

There’s no question that we are living in a digital-first world. But that doesn’t mean retailers shouldn’t be thinking about how virtual experiences can bolster in-person shopping, and vice versa.

Two birds, one stone

The pandemic has left many shoppers hesitant about returning to in-person shopping. This means retailers need to think about how to give their customers more “bang for their buck” upon visiting a store.

Saks Fifth and WeWork are joining forces to do just that: offer co-working spaces in department stores. Shoppers will be able to work and shop in a single visit, which is a cool experience if you need to accomplish multiple tasks in a single outing. In our new remote work environments, customers might be more interested in taking a few work calls from the mall, where they need to purchase a dress for a friend’s wedding.

As retailers like Saks Fifth experiment with new in-store experiences, they will need to evaluate how these new initiatives impact revenue for in-store shoppers to see if the investment paid off.

Offer in-person experiences that can’t be replicated online

Retailers can assume that shoppers will, at the very least, begin their shopping experience by browsing online. For items that require more personalization like sporting or home goods, the in-store experience of trying out equipment or furniture will continue to remain important.

This is why brands are focusing on building a culture around the in-store experience.

Dicks Sporting Goods, for instance, is opening a new store format and brand called “Public Lands.” Stores will be 50,000 square feet in the Midwest and focus on hiking, camping, and biking, with experiential components like a rock climbing wall and turf. This is a great way for customers to test products before making a purchase, while also enjoying a hobby without going too far from home

Similarly, IKEA is testing out a new store model that is more focused on the experience. Instead of their traditional maze format, Ikea will invite customers to “hang out” in rooms so they can experience the furniture and goods in a “real life” scenario. Add in some WiFi or meatballs and you’ve got yourself a very pleasant afternoon outside of your home.

For retailers like Dicks Sporting Goods and IKEA, measuring the success of their in-store experiences means seeing which items people prefer to purchase in-person vs. online. By seeing what sells better in-person, retailers can ensure they have the best selection of items on the shelves.

Create virtual experiences that build on the in-person ones

Perhaps most importantly, retailers should be thinking about how their digital tools can enhance, not replace, in-person shopping. Brands are turning to immersive tech such as AR, VR, and other virtual solutions to bring elements of the in-person experience to consumer devices.

Amazon, for instance, has a feature on the app that makes whole outfit recommendations based on recent apparel purchases. Other retailers are following suit by launching virtual stylists or live support. Best Buy is setting up virtual stores in their distribution centers so customers can connect with a “live store assistant” to demo products from a chat feature online, or by scanning a barcode in store.

While new tech is splashy and cool, it’s important that brands measure if and how these immersive technologies actually enhance the customer experience. Is VR driving new customers, bigger sales, or spotlighting different products? Customer behaviors like these need to be measured to show true impact and ROI.

For retailers, the answer is clear: modernizing and digitizing the in-person shopping experience is the next frontier for shopping.

Elissa Quinby is senior director of retail insights at Quantum Metric. As a go-to-market and industry lead, Quinby provides expertise that supports retailers’ ability to optimize the digital customer experience. Prior to joining Quantum Metric, she spent seven years with Amazon Retail holding roles across multiple verticals and various functions.

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