It’s more than a store – Changing the mentality towards your store space

We still hang on to our central mission as a retailer that our stores are simply there to “sell stuff”.  But as consumers change their shopping habits and seek experiences and solutions, this central mission is fast becoming old-fashioned and doomed to failure.

It’s time to let go of this dominant selling mission in your physical store space and start thinking about what value you can create for your consumers. I recently read an article in the Harvard Business Review, featuring Ron Johnson ex Senior VP Retail of Apple and now CEO of J.C Penney. Commenting on the existence of the physical store space Johnson remarks, “It’s got to help people enrich their lives. If the store fulfils a specific product need, it’s not creating new types of value for the consumer. It’s transacting”. 

Business ‘fitness’ in the physical store space does indeed require you to have a value-creation mind-set and this will most likely mean re-imagining your entire thinking towards your store space.

Like a majority of retailers have done in the past, you have most likely started with the products you sell rather than your consumer. 

Now, you need to look at how you can holistically create value throughout your consumers’ entire shopping mission in your store. 

• What experience do you want to give them?
• When they enter, what problem are they looking to solve?
• Can they test products and become comfortable with them? 
• Is there a place they can experience the store environment and hang out to discuss, try and interact with the brand?
• Can they try on clothing and see themselves photographed in them?
• Can you solve their gifting needs?
• When they’ve made their decision, what’s next as part of your value-creation proposition? Do you gift wrap and offer to send them a reminder when the gift occasion is due again? 
• Can they become part of a “test drive innovation” community?
• Can they take part in a store-based occasion that uses what they purchased? If necessary, where can they receive some personal training on their product choice? 
• Can you fix their products for them?
• How do you want them to feel when they leave your store?

Retailers with value-creation mindsets are true challenger brands and provide customers with an experience that takes them way beyond the “me, too” feeling customers are currently experiencing in so many shopping centres.  Indeed, consumers face a myriad of multi-channel transactional-based shopping choices right now. 

If you give them just the opportunity to browse products in your store with the flick of a hand, when they can browse your same inventory online with the flick of a mouse, you haven’t yet initiated your value-creation mindset.

If you’ve integrated your offer into multi-channel, your e-commerce website is the perfect retail space to rely on a transactional-based strategy and initiate price competition as well as promoting convenience.

However, this is not a value-creation mindset – rather it fulfils a need for this particular environment. 

The important thing is to get business ‘fit’ recognising the two different roles of your physical and virtual store space and integrating them in the right way. 

There is a certain public perception that there’s been a dramatic shift in purchase behaviour from physical to virtual.  This is in fact quite the opposite. Harvard reported in December that only about 9% of US retail sales are online today. What is growing, however, is the physical retailers’ extension into the multi-channel retail space. 

There is no evidence to support the hypothesis that as one grows, the other declines due to cannibalisation, forcing the decline of the physical store space like some old fashioned battle.

Physical stores remain the main point of contact with customers and as Ron Johnson so rightly summed it up, “The only way to really build a relationship is face-to face. That’s human nature. That gets at the essence of what retail stores have to be about”.

So for ‘fit’ retailing, welcome to the world of value-creation and the strategic integration of the physical and virtual retailing space.

Happy ‘Fit’ Retailing

Brian Walker is Managing Director of Australasia’s leading retail consultancy, the Retail Doctor Group.

Retail Doctor Group® is holding the next Fit for Business Breakfast in its popular sell-out series. The new events, to be held in Sydney on 28th February and Melbourne on 2nd March, will focus on WHAT’S IN-STORE FOR THE FUTURE OF RETAIL.

The event will outline first-to-market exclusive research based on neuro-scientific consumer studies to help retailers understand how to fulfil real consumer needs.  Together with winning examples from Ebeltoft’s latest Global Retail Innovation Study, the breakfast will detail practical solutions for implementation to move retail businesses forward.

Guest Speaker Stuart Machin, Store Development & Operations Director, Coles Group / Wesfarmers Australia will be presenting how consumer knowledge has helped build a leading brand and business as well as sharing the Coles ‘Turnaround Strategy’, its consumer path to purchase and new channels and formats as well as their vertical integration.

Bookings can be made at www.retaildoctor.com.au/events or contact 02 9460 2882 Email. events@retaildoctor.com.au