Let’s get physical
Chris Westlake, Managing Partner, Howell Penny
Since 2000, 75% of global retail sales growth has come from online channels. Sales through UK digital channels continue to grow at 10-15% a year, while UK in-store sales increase by around 2-3% a year.
Yet, instead of sounding the death knell for bricks-and-mortar stores, brands are still opening physical spaces. Even online-only brands like Amazon have introduced the much talked about Amazon Go format. And Argos says its physical stores are the battleground in their fight against the Amazon behemoth.
So, why is this happening? And what is the benefit of a physical presence?
Well, even though ecommerce is where the growth is, physical retail is where the value is. And this value is largely coming through the enhanced shopper experience and the added value the retailer gets as a result of more face-to-face interaction with their shoppers.
Know your shopper. Sell more.
Shoppers are busier and there are more demands on their time than ever. Social media platforms mean shoppers listen to their peers more than brands and block out messages they feel are irrelevant (or fake). Personal recommendations, either from people known or other people online, has become the most trusted form of marketing.
What’s all that got to do with physical retail space?
Well, it’s easier for brands with a physical space to engage shoppers in person, to create compelling experiences and communicate first hand the benefits of what they do and sell. And by doing this, encourage positive word of mouth and ultimately more sales.
Physical means visible
Also, savvy brands are using the physical space to boost their visibility. For the price of a static poster site, a brand can now rent a pop-up store, which has all the visibility of a poster as well as being interactive, immersive and revenue generating.
This increased visibility also helps them stay relevant and top of mind. In short, a physical presence builds recognition and familiarity. Stores help brands stand out and help build a shopper base. For example, when a brand has a café in a space or runs special events, existing shoppers often invite a friend to join them, introducing new potential shoppers and more sales.
Online channels are great at making a huge range of products easier to browse and shop. But experience is what sets a brand apart. The physical space can bring a brand to life in ways a website cannot rival. Look at Mercedes-Benz World at Brooklands. No digital experience can surpass the roar and smell of a C63 AMG at full tilt on one of their experience tracks.
Education and entertainment
Experience also influences more purchasing decisions than price. Gartner estimate that 53% of customer loyalty is driven by the sales experience.
The physical space can educate and reassure shoppers. In a store, they can chat to staff, ask questions about a product or service until they have all the answers. It also helps the brand understand who their shoppers are and how best to communicate with them.
The ability to create compelling, memorable shopper experiences is also one of the biggest benefits of the physical space. Staffing, lighting, scent, music all play their part but these can be hard to control in a third party environment. That’s why brands such as Dyson, Chanel, Samsung and Bose are opening up their own spaces.
Bricks and clicks
As shoppers spend more time online, some progressive brands like John Lewis are creating omnichannel retail ecosystems, making it effortless for customers to move between online and offline channels. More and more brands and retailers are increasingly seeing the store as one part of a holistic shopper journey.
Brands that engage offline and online in a frictionless way have been shown to be more profitable. However, the challenge is to understand shopper needs across all stages of the shopper journey and optimise that experience. By using data and research insight, smart marketers are tailoring experiences that are relevant, timely and engaging.
The shopper experience agency
So, physical really does matter a lot. And having an agency partner with diverse expertise to understand and develop appropriate strategies to use the physical space creatively and integrate it seamlessly with the digital experience is absolutely crucial.
Here at Howell Penny, our diverse team of retail strategists, conceptual creative, designers, UX, data and promotions experts have been working with challenger and iconic brands for more than 10 years to formulate and execute campaigns in this increasingly complex world.
We use a simple 5-step process to understand the shopping experience and recommend strategies, tactics, ideas and experiences to improve the shopper journey and sell more. We call this Sofa2SaleTM.
Give us a call for a chat and let’s get physical about your shopper experience strategy.
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