May 16, 2017 Dan O'Shea

Beyond Omnichannel: Remaking Retail Stores into Digital Operations

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Retailers sometimes bat around the term “omnichannel" as if it were just another marketing catchphrase.  To really meet the demands of consumers these days,  it's important to communicate in a unified way across shopping channels -- brick-and-mortar, ecommerce and mobile channels. This has been a key focus of retailer initiatives in particular. But it’s not enough.

What retailers need to do is transform their store operations—top to bottom—into digital businesses. But how? The answer may lie as much in how they run their stores as in the customer-facing technologies they adopt. The focus, ultimately, is to create an experience that mirrors the kinds of personalization and control that consumers have become accustomed to when they shop online.

Expectation of Expertise and Excitement

In an omnichannel world, consumers expect to find every detail about a product along with expert opinions available in a single Google search. Barry Givens, director for digital retail at managed services and consulting firm Avanade believes home sound system company Sonos accomplishes this by making an immersive music experience its main focus. “You go into that store and you become enmeshed in a total sensory music experience. You can listen to music through various specialized devices while  the people who work there educate and entertain you," he says. “When was the last time you went to the grocery store and talked to an associate who was passionate about food?"

Best Buy is also jumping on the expertise bandwagon. In an interview with Fortune, the company's CEO Hubert Joly explained how he sees the rapid change in consumer technology as an opportunity for Best Buy to keep consumers coming into brick-and-mortar locations. In stores, they can find knowledgeable experts to help them use and understand the latest tech products. Joly wants to establish Best Buy not only as a place to find a variety of tech products, but also where consumers go to master their new tech. Through its 2012 Renew Blue initiative for store improvement, Best Buy vowed to "implement rigorous training and coaching" for its associates. For starters, this included expanding the services offered by its on-site tech expert team, Geek Squad, to consist of more than just laptop repair expertise. Now, Geek Squad helps shoppers set up and understand new tech products like wearables — an offering consumers can't get from shopping on Best Buy's ecommerce competitors like Amazon.

Customization Takes Priority

Digital business has also raised the bar when it comes to customization. Consumers want to be co-collaborators on products with brands and thanks to technology, such as 3D printers, this type of collaboration and rapid customization is a growing reality for brick-and-mortars.

In a very recent example of this, Adidas partnered with the 3D printing startup Carbon to create 3D printed shoes and sweaters. While the shoes will be printed in their new futuristic factory in Germany, Adidas already tested a 3D print station in a pop-up store that allowed customers to design and produce their own sweaters, taking them from concept to ready-to-wear in just a few hours.

In creating this kind of experience, retailers are essentially recreating the customization that many online experiences provide, but in physical stores. Brands also believe this in-store product customization concept will help them drive sales and shorten the production time of new designs.

Adopt Design Thinking

If retailers are struggling to jump-start their digital transformation strategies, they might try “design thinking," the creative process strategy professional designers rely on. “For retailers, design thinking would involve not thinking about technology, but thinking about what they're customers want," Givens says. “In an age when you can buy things so conveniently online, why do customers need to come to your store, and what do they need to do there?"

The answer in the case of a Sonos store might be that customers want to hear music through Sonos speakers and talk to associates who are as passionate about sound quality and music as they are. In the New York City Sonos store, for example, customers can enter an enclosed living-room-type space custom-wired by Sonos, and use the Sonos app to play and control the music of their choice while in that space.

In the case of another retailer, the answer may be different. Consumers in a Nike store may want to try on shoes, and then try them out on a basketball court or a treadmill, and may want to have them laser-engraved to add a touch of personalization. All of which are available in Nike's first revamped experiential store.

Infusing the in-store experience with technology like 3D printers and targeted experiences are a part of the transition into digital retail, but these methods aren't the only way to establish this new digital-first strategy. At its core, digital business is about making the experience consistent for consumers throughout all channels. And this begins with the knowledge of what consumers want, not necessarily the latest and greatest technology.

Published by Dan O'Shea May 16, 2017
Dan O'Shea