How to survive the radically different landscape for Food and Beverage retailers (hint: it’s all about the experience).
Recent years have seen a boom in service-based technology. Apps and websites like Uber, Taskrabbit, and Grubhub have taken over the market as time- and effort -saving tools for the modern consumer. Naturally, the advent of service-based tech has brought new challenges for traditional retailers―--and food and beverage retailers have been hit particularly hard. A proliferation of delivery-based apps and online grocery services have meant a radical new retail landscape for restaurants and grocery stores alike. Consumer expectations for food and beverage retailers are shifting towards an increasingly powerful duality between uber-convenience on the one hand, and hyper-experiential on the other.
Here, we take a look at some key areas that consumers expect when it comes to F&B retailing, and how retailers are meeting these demands.
First, let’s talk about convenience
As consumers become accustomed to the ease of online or app-based food shopping, grocery stores and quick-service restaurants will have to adjust to an increased demand for quick-and-easy food service solutions. This means an emphasis on prepared foods and meal kits―--take the “grocerant” trend―--as well as a focus on food delivery and pick-up sites. Whole Foods, for instance, has debuted a locker-based order pick-up system which includes, with refrigerated food lockers located near store entrances― so customers can order online and pick up in-store without having to navigate aisles or crowds. Restaurants, too, are beginning to focus on providing intuitive pick-up locations for online orders to ease customer transactions.
Convenience also means a streamlined store design with clear signage and informed staff. Trader Joe’s staff are encouraged to chat with customers about their products and provide suggestions based on consumer preferences. And, even at fast casual restaurants, servers are expected to be equipped with information about food preparation and source. In order to compete with online food services, grocery stores and restaurants alike will have to provide a comprehensive and intuitive shopping experience.
A Focus on Fun
What the online grocer can’t provide, though, is a personal, pleasurable, and fun dining or shopping experience. While grocery stores and restaurants should keep things streamlined and efficient, they certainly shouldn’t neglect the experience-based shopping experience that brings customers off their couch and into stores. This is, again, where the grocerant trend comes in―--more and more grocery stores are emphasizing a pleasant and even chic in-store dining experience for shoppers who want to grab a meal before picking up groceries, or even as a stand-alone as an independent dining experience. Some grocery stores have begun incorporating high-end coffee and even wine bars into stores to make for an enjoyable and unique shopping experience.
Meanwhile, restaurants need to focus on a pleasurable and engaging dining experience. More and more restaurants are providing a unique dining experience, from innovative plating, to more engaging and personable waitstaff. Even quick-service restaurants are featuring pleasant store design, including hip fixtures and art installations in order to appeal to the demands of the Instagram generation. Special events, too, can bring customers in, for everything from wine tastings to pasta-making lessons. Keeping it fresh and interesting will require providing what online services can’t―--a fun, personable dining experience.
The food and beverage retail landscape is changing rapidly. In order to keep up, retailers will have to think hard about what they can provide to keep customers interested. Both radical innovation and simple solutions will be key to moving forward with intuitive, quick, and fun food and beverage retail experiences.
Amazon just beat Best Buy for the top spot in Consumer Electronics Retail. What this means, and how retailers can adapt.
Perhaps the longest hold-out of the move from in-store to online retail has been in the consumer electronics sector. For the last decade, Best Buy has held out as the top consumer electronics retailer, despite a concurrent push towards online retail in most other retail categories. Signs would indicate that when it comes to consumer electronics, consumers still prefer an opportunity to see, test, and learn about products in person rather than wholly relying on online guides and reviews.
That is, until this year. Dealerscope’s Top 101 Consumer Electronics Retailers Report of 2018 found that online retail giant Amazon has officially beaten out Best Buy for the top spot in consumer electronics retail. And it’s been a long time coming--while Best Buy has held out in total sales, Amazon has seen significant growth in the last decade— while Best Buy’s growth remained relatively minimal. The convenience of online retail, as well as its increasing ubiquitousness, has meant a defeat for Best Buy and a victory for digitally native consumer electronics retailers.
What does this mean for brick-and-mortar stores? It could be a wakeup call. While there’s been a clear shift in preference for consumers in the last few years from physical to online retai, there’s been a marked increase in physical consumer electronics retailers--over ninety thousand stores operated by retailers according to Dealerscope’s list. Even the brick-and-mortar stalwarts are starting to fall to the digital era. What can stores learn to keep current in Amazon’s wake?
Explore New Category Solutions and Formats
Innovative consumer electronics retailers like b8ta and Soda Says are popping up across the country to fill a gap in consumer electronics retail. As Soda Says CEO Grace Gould stated, “you have these brands--Apple stores, Microsoft stores, Samsung stores--that sell a very limited number of products. And then you have big-box retailers like Best Buy. No one is doing an interesting lifestyle business within consumer electronics.”
By bringing a carefully curated product range to the floor and filling their stores and outposts with color and design detail, b8ta and Soda Says are providing an all-new consumer electronics experience that bucks the stuffy big-box stores and the impersonal online shop. B8ta has also brought it’s successful format to bigger department stores, with a shop-in-shop in Macy’s. It allows people to explore products they may not have found online, try them in-person, and be hand held through the experience by an informed, friendly sales associate. Formats like these can elevate the in-store experience and create a compelling reason to visit a store.
Consider New Store Design Solutions
It’s helpful for consumers to experience how the product will fit into their lifestyle or home environment.
For example, consider the complex product category of ‘Smart Home’. Browsing products sitting on a shelf, consumers may find it difficult to navigate the complex choices and even more difficult to understand how they all work together.
To solve this challenge, we recently created a ‘store-in-store’ experience for the Smart Home Category for PC Richard & Son,which placed products within a home-like environment within the store. This allows customers to imagine how each product would fit in their home environment. This context let them become more familiar with this complex category. The result? A doubling of saless.
Another example is the Sonos store in Soho, New York, which provides different lounge-room environments for customers to explore the Sonos sound system. Each booth features comfortable couches, or an office-like desk and chair, to allow the consumer to go on a journey to experience how the Sonos system could work if installed in their own home.
Using sound, light, space and carefully thought out design and display fixtures, you can create an environment that communicates so much more than just the benefits in a bulleted list or detailed illustration on a website.
Provide Omnichannel experiences
What makes online shopping so compelling? The ability to shop for the best price, read hundreds of reviews, study comparison charts, and then have the product delivered to your doorstep, all while sitting on your couch in your pajamas.
These are all factors that can be brought into the in-store experience (minus the pajamas!). Here is where retail technology such as interactive digital displays, and AR and VR have a role.
Consider replacing status pricing signage with digital options that can provide real-time price updates. These same digital displays could also allow customers to read through product reviews and comparison tables. If the customer wants the option of home delivery for bulky items, a store associate could arrange this at checkout. Worried about the checkout queue on a busy day? If each store associate is equipped with a tablet, they are easily able to check customers out throughout the store. Item not in stock? Customer’s should be able to order it for home delivery in-store.
New technologies such as AR and VR can also provide opportunities to help by making the shopper’s life easier within the store. For example, using AR, Topshop used motion sensing technology to create a virtual fitting room for customers in their Moscow store. By standing in front of the camera, customers could see how the item looked on their body without having to line up and wait to try things on.
In our design process, we often ask the question ‘“How can we bring this online benefit into the store” rather than seeing online retail as a separate channel with separate features. While retail channels (online, retail, mobile) are often managed separately, we prefer to think of the brand wholistically--and design to meet the customer where they are. They may start researching online (and statistics say they often do), but then visit a store to complete their purchase. And so we often ask the question “How can we help bridge the gap between the in-store and online experience? How can we meet the customer where they are or want to be?”
While no physical store can compete with the endless product options of the internet, it’s important to provide as many services as possible to remain competitive as consumer expectations change. Retail norms are changing--stores have to change with them, or get left behind.
Provide What Online Can’t
While it’s important to meet the expectations as set by online retail, the in-store experience is filled with opportunities to exceed them and delight and surprise customers.
One of the strengths of physical retail is the ability to make an event out of a shopping trip —- turn the store into a destination. How can you do this? You can borrow from other brands who are leading in experiential retailing.
Nike, for example, has a full size basketball court for consumers to experience their shoes on the court. They also run live events, and offer product customization on-site in the store. Sales associates are athletes themselves, and always speak from experience.
If you’re not already doing this, expand your product release strategy to include in-store only exclusive events. Organize special interest parties, or demonstration days. Anything that will work to bring customers off the couch and into the store. Make it a destination— - keep it relevant and interesting.
A final word. At In-Store Experience, we have a motto— - “Retail is not dying— - boring retail is!” Keeping things fresh, relevant, and staying on top of the latest trends gives us insight into what consumers expect. While the Amazons of the world are growing— - nothing can replace the power of the in-store experience.
Once again, Black Friday is upon us! Here are 5 interesting statistics around Black Friday and what they mean for retail.
We know retailers are always looking for ways to beat online competitors. We also can see that successful retailers are adapting a previously siloed strategy to now ensure that all their channels (physical, online, mobile) work together, delivering the shopper a blended experience, no matter where they decide to purchase. For physical retail in particular, there are some specific areas where technology and merchandising can play a key part in keeping the channel competitive and relevant. Some of the main areas where technology and merchandising can help include:
A Walmart in Rogers, Arkansas, is helping consumers avoid the queue by making every aisle the check-out aisle this holiday season. The store also offers in-store wayfinding through the Walmart App Shoppers can simply speak the name of the product they're looking for (for example, 'bedding') and the Walmart app will guide them there.
The recent opening of the 'House of Innovation 000' by Nike, is a great example of taking experiential retail to the next level. The 6 stories across more than 68,000 sq ft in New York offers many experiences that are both personal and responsive - two factors which are easier to deliver online, but Nike have managed to bring in-store. For example, with Shop The Look, shoppers can scan a code on an in-store mannequin, browse every item that the mannequin is dressed in, check to see if specific sizes are available in-store and then request for a store associate to send the items to a fitting room. The space features 'maker' studios where shoppers can personalize their shoes. And like the Walmart example above, you can also skip the lines and pay with the Nike app while you're in-store, or visit aNike Instant Checkout station located throughout the store where customers can bag their purchases themselves.
Nordstrom is investing in experiential retail by replacing inventory with activity in some stores. The Nordstrom Local concept that launched in LA invites customers to gather and socialize over glasses of wine or beer, get a manicure and meet with personal stylists. By identifying a factor that online shopping can't compete with, the retailer built luxurious dressing rooms where shoppers can try on outfits they ordered online and if the clothing doesn’t fit, a tailor is on hand to make the alterations on site.
Sephora introduced a Beauty Hub in-store - featuring technology that allow for precision color matching for foundation shades by scanning the shopper's face. There is also a Virtual Artist service where shoppers can test looks on an iPad or connected mirror equipped with thousands of looks. Though the retailer offers many self service options like this, they still also acknolwedge the importance of knowledagble associates instore for the optimial experience. In fact, Deborah Yeh, senior vice president of marketing and brand at Sephora, has stressed the importance of thinking about technology and store associates "in balance."
Amazon has opened a physical store in Soho, NY which is filled with products that are trusted -- they either are rated 4-stars and above, are top sellers, or are trending.
The company claims to have created a space which is a direct reflection of their customers - specifically catering to what they're buying and what they're 'loving'.
Starting with some of the most popular categories on Amazon.com, and layering on zones in the store for 'Most-Wished-For', 'Trending Around NYC', and 'Frequently bought together' - the space is designed to allow customers to discover products they love - and reflect Amazon's online shopping habits, but in a physical environment. There are even customer review cards to accompany products.
As Digiday pointed out,this is a look at how Amazon is shaping how the department store of the future looks like, where customers decide on inventory, not buyers - putting pressure on big-box retailers to curate selections based on customer feedback. The use of real data - and stocking products that will have guaranteed success is truly innovative.