South by Southwest
Retail Remix

Many current retail stores as we know them—with their uninspiring layouts and hermetically sealed user experiences—are brontosauruses.

Soon to replace them will be shops that are beautifully designed and filled with interactive experiences, said the speakers at a SXSW panel designed to glimpse what’s to come in the retail realm. Bonobos, for example, is an eCommerce-driven men’s apparel store with eight retail “guideshops”—places where you can make an appointment to go try on and order clothing with a “guide” who helps facilitate the visit. Rebecca Minkoff is a popular handbag purveyor about to open retail stores that will include such features as a “selfie station.”

This shift is taking place quickly. eCommerce represents only 8% of retail sales right now, but venerable brands such as Sears and RadioShack are closing stores—a fact that many e-commerce analysts attribute in part to the staid and stilted experiences the legacy businesses offer. There is less and less tolerance for such things; young people who make up Generation Z give websites an average of 6 seconds before bouncing out, so the idea is to capture them quickly with great site design—both digitally and in the physical world. Williams-Sonoma, for one, is shutting down stores but altering the ones that remain open so they become more experiential.

Zita Cassizzi, chief digital officer of TOMS, the socially conscious shoe brand with an innovative give-back model, said stores will increasingly be seen as places to bring community together—that soon, the commerce part of the experience will be something of a sidelight rather than center-stage.

Emily Lacivita, head of eCommerce at Rebecca Minkoff, said the handbag company soon to enter the brick-and-mortar is planning accordingly. Digital store windows will allow people to shop on mobile devices even in retail spaces. As for the “selfie stations” that will appear in every store: Even if the consumer doesn’t buy, visitors will upload their shots to their social media pages, and the experience therefore organically becomes part of Rebecca Minkoff marketing.

Of course business matters too, and purveyors are experimenting with new approaches. Bryan Wolff, CFO at Bonobos, said his business thinks in terms of the “endless aisle.” The guideshops do not have an inventory customers can take home; you try on the products and then order in-store, online, for delivery. There’s a business benefit: A normal store is about 3,000 square feet, while Bonobos’s guideshops are only around 900, so they can sell more SKUs than a real store can. For customers, it’s a case of “delayed satisfaction.”

No longer will mobile phones be considered the enemy. It’s true that 75% of consumers are on their phone while in the store, but 63% of them are on that brand’s site, and it’s a common misconception that they’re all comparing prices and looking for a better deal.

Still, the new wave of eCommerce practitioners are grappling with the boundaries of technology. When people walk in with phones in their pockets, how can retailers create better in-store experiences that aren’t creepy based on their access to data? One possibility: apps for geo-based experiences such as iBeacon, Apple’s innovative Bluetooth LE technology that allows two-way communication between devices.

Other intriguing questions remain. Can retailers capture “data” from store items left behind in changing rooms, to figure out why customers didn’t buy them? Are other such probing inquiries possible without trampling on consumers’ privacy? Answers, no doubt, are to come.

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