Let’s Take This Offline: Reimagining the Retail Customer Experience

Written by Maeve Daniels

Perhaps it time to turn our laments away from the bricks-and-mortar of retailers past and embrace the technology driving retailers’ future.

We are in the midst of an apocalypse. Yet, gone are the disgruntled zombies of our imaginations—replaced instead by online retailers wielding digital channels against the unassuming brick-and-mortar shops of the world. Indeed, this war of worlds has prompted a sea-change in consumer shopping habits, driving conventional stores to move their strategic focuses increasingly online. This piece is not about that battle, however.

So far, speculation as to the future of retail has focused on the apparent unidirectionality of the shift from store to site. Yet, such an emphasis excludes other phenomena occurring in the market—namely, the shift from online to offline. Offering customers a unique opportunity to ‘taste and see’ products before the point of purchase, the advent of online retailers to the traditional store setting can be said to be driven by considerations of efficiency. The proverbial “Achilles’ Heel” to the e-commerce boom is the high rate of returns of online purchases, estimated by Forbes to be between 25 and 40%. Despite incurring greater fixed costs in the form of physical storespace, retailers can rest easier with the increased certainty of customer satisfaction, driving further sales and higher profit margins. Hometown giant Amazon has already announced its plan to open five pop-up shops in Whole Foods nationwide, turning to a new venue in which to market its proprietary products such as the Kindle, the Echo, and the Dot.

Online-only retailers, savvy as to the array of sheer possibilities that technology has to offer, have turned to the physical storespace as a forum for testing customer behavior and preference. This year, Chinese online shopping giant Alibaba—far from cash-strapped, reporting over $3.4 billion in free cash flow in Q3 2017—installed over 60 digitally-equipped pop-up stores as part of its Singles’ Day promotions in order to introduce business-to-consumer technologies such as augmented reality and mobile payment systems. (Such an effort must have paid off, with the company reporting $25.3 billion in gross merchandising volume over the holiday alone.) In local news, Millennial favorite Reformation recently opened its first technology-enabled boutique on the East Coast, less than 10 minutes away from Tisch Hall, granting customers autonomy over their shopping experiences to fill a “magic wardrobe” with the swipes of a few fingers, choose the appropriate mood lighting to try on the pieces in said wardrobe, and even connect their own devices to ensure enchanting tunes throughout the process.

Such approaches not only capitalize upon customers’ direct feedback in stores, but capture the power of customer-centric experiences in the purchase process. More powerful, however, are the capabilities of “perception and cognition” identified by MIT researchers Erik Brynjolfsson and Andrew McAfee that increased integration of artificial intelligence lends to retailers, allowing them direct feedback mechanisms through which to dynamically adapt to changing consumer preferences.

Perhaps it time to turn our laments away from the bricks-and-mortar of retailers past and embrace the technology driving retailers’ future. In this way, perhaps retailers will be able to know consumers better than they know themselves.