Store closings. Bankruptcies. There seems to be a black cloud hanging over the retail world. Is there a silver lining? Reports of store closings from major retailers like Macy’s, Wal-Mart, and Kohl’s, a bankruptcy announcement from Sports Authority, and reports of seriously declining sales from other major retailers, including Sears, indicate volatility in the retail sector. However, other retailers, like J.C. Penney’s, are breaking through the clouds with omnichannel strategies that bring together the digital and physical retail worlds. Even Amazon is entering the omnichannel world by opening physical locations.
According to Fortune, J.C. Penney’s CEO Marvin Ellison had a change of heart. Originally intending to close many stores, Ellison recognized that physical locations impact the retailer’s omnichannel strategy.
- Same-day pick-up of online purchases increases sales and creates opportunity for more purchases during the pick-up visit to the store.
- Physical locations impact brand awareness. Decreased online sales in areas where stores had been recently closed were attributed to a decline in brand awareness caused by the removal of the physical location.
Omnichannel strategies improve customer service, reduce costs and provide data on shoppers, including shopper path engagement, traffic and conversion.
- According to FierceRetail and ChainStoreage, part of the omnichannel strategy for Macy’s, Levi’s, Target and Murdoch’s Ranch & Home Supply includes using cloud-based inventory accuracy programs to improve customer service. Customers find exactly the item they want (color, size, etc) on-shelf when they visit the store. Inventory accuracy programs also reduce costs associated with inaccurate inventory counts.
- Customers of Rock/Creek, a Tennessee outdoor outfitter, value the retailer’s free Wi-Fi because it allows them to research products in-store without using their data plans. The National Retail Federation reports that the free Wi-Fi benefits Rock/Creek as well. Customers sign in using their Facebook accounts, which allows the retailer to collect data, including pages visited while in-store. Rock/Creek provides this data to companies hosting in-store events, increasing the value of co-marketing strategies for Rock/Creek.
Should your omnichannel strategy include inventory accuracy programs? Should your physical locations be showrooms or pick-up spots? Understanding the role of the physical space and how it complements and enhances the online retail world helps retailers determine the most effective number, location, and size of stores and also what kind of technology should be integrated into the space. Common roles of physical stores used in omnichannel strategies include:
- Showroom to display products and offer demos. Items then ordered online and shipped.
- Pick-up location for products ordered online.
- Brand adventure: a place for customers to connect, build relationships, try products, play, and experience the brand.
Once the omnichannel strategy is in place, the physical space must adapt to the new plan.
- Redesign retail fixtures and shelving to accommodate for the move from merchandising to interactive use. Fixtures need to accommodate interactive technology with attention to security, use and appearance (for example, hiding wiring).
- Increase the efficiency of online-order pick-up with clear and direct signage to pick-up areas.
- For brand-experience stores, install appropriate seating, like benches or upholstered pieces.
- Redesign shelving to increase the efficiency of locating products and of the purchase process.
- When an omnichannel strategy calls for reducing store size, redesign space for customer and staff traffic to ensure customers and staff can find products quickly and easily.
Find your silver lining among the black clouds covering the retail sector with your own omnichannel strategy. Indulge your customers with the best of both your digital and physical retail channels.← Back to all articles