SAG_Twitter_Social_banner_store_880x440px_en_Aug21This is a guest blog by Written by Andrew Busby, retail writer, influencer and keynote speaker.

This pandemic has had many effects on retail, from closing stores to a rapid shift to online and completely new customer behavior. But one – perhaps unexpected - thing it has shined a light on is the absolute importance of maintaining a robust store estate.

At first glance, that might not be obvious. According to McKinsey, during 2020, it took just 90 days for ecommerce penetration to increase from 16% to 33%. In other words, growth equivalent to the previous ten years.

However, in his new book, Retail Recovery, retail author Mark Pilkington said: “Online takes the strain of the transaction to allow the stores to focus on the secret sauce.”

But perversely, that secret sauce might be in supporting the online operation. It is generally less expensive to fulfil from stores as it is from a centralized distribution center. Which in turn raises another key trend: Today, if you want to serve your customer, you need to go to where your customer is.

Seismic shifts are occurring where the store will be the ultimate incarnation of your brand. Digital is tightly woven into every aspect of the business, and digitally enabled, the secret will be knowing which channel to push and when.

The future’s bright

So, what does all this mean for the future of the store? You could be forgiven if you think the outlook is bleak, but in reality the contrary is true.

It has been clear for years that, in many countries, retail has become over-spaced and that a reduction in overall square footage was inevitable. But this shouldn’t be interpreted as a sign of distress. It is more a sign of pruning to allow for future growth. And that means digital growth.

One positive outcome from the global pandemic is that the CIO is now far better placed to influence the CEO than ever before. After all, the CIOs got the business through the crisis, and the CEO recognizes this.

According to Gartner, in its 2021 CIO agenda report: “CIOs have been trying for years to convince senior business leaders to modernize and take full advantage of technology. Now, many roadblocks have been removed, and the majority of boards are prioritizing these initiatives.”

And this is where trusted technology partners come in. Intimately understanding the challenges now facing retailers, they are perfectly placed to support this much-needed digital enablement of stores, integrating technologies such as the Internet of Things (IoT) and robotic process automation (RPA) with existing systems and processes.

The store is dead, long live the store

Long gone are the days of transactional store selling, measuring sales per square foot and other, now irrelevant, metrics. Stores will assume new roles, either becoming fulfilment hubs or experience centers. Perhaps the most exciting incarnation of the latter is opening at Westfield London in late September.

Situ Live claims to be: “The place to discover and choose the latest and best innovative products designed to make life better.” It will carry no inventory and you can’t purchase direct from there either. But what it does provide is a means to interact and try all kinds of different brands and products in live theatre settings.

Suddenly, rows and rows of static rails and shelving will be rendered obsolete. But one ingredient which stores of all types require more than ever is great customer service. And this means equipping store staff with the means to deliver it.

Rather than becoming an outpost of the business, weighing it down and preventing digital progress, the store is set to become the hub of the brand and of the customer experience. As Boxpark boss Roger Wade once famously said: “Online [shopping] is like watching fireworks on TV.”

Having a great app and a super sleek and agile front end is all very well, but now, more than ever, without an equally digitally enabled store estate to support it and showcase the brand, all the digital enablement in the world cannot create the unique human interaction that stores provide.

Call it engagement, interaction or theatre, the secret sauce of any retailer lies in the physical. And long may that continue.

Click below to see how Software AG can smooth your path to digitalization.

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