by: Chris Prins & Jeff Hainer, Colliers International West Michigan
The chore of waiting in a long department store line can now be accomplished with the touch of the screen of a smartphone. Sears, Macy’s, JC Penney and other department stores were able to stick with proven concepts and succeed for decades, but the immergence of online shopping has created the ease for consumers to obtain the same products without having to step foot in a store. These alternative concepts have affected retail, but the need for physical stores is still so important for retailers.
One sector within the retail landscape that has remained quite consistent, even with the emergence of the internet, has been the restaurant industry. Concepts like Chipotle, Five Guys Burgers & Fries, Panda Express, Chick-fil-A, and others, continue to expand. They are able to learn from the large department stores, embracing the need to utilize technology and connect with their customers. Almost every national restaurant has an application for their customers to remain in constant contact with their brand. The need for physical locations is not only for a place to eat and shop, but is also a strong marketing opportunity. Many of these retailers have established a social media presence utilizing outlets such as Twitter, Facebook, Snapchat, and Instagram. Even local restaurant concepts within the community realize the importance of social media and have begun following some of these national brands.
Retailers are now becoming aware of how important the in-store experience is. Shoppers crave a great experience from the moment they walk into the store. Virtual Reality (VR) is one of the newest fads that retailers have begun to use in stores, allowing customers to try out products, even if the product isn’t physically in the store. Nike’s New York SoHo store allows the consumers to play basketball, soccer, and other sports through VR, which is just one way in which a retailer has improved their in-store experience.
Today, 90 percent of retail sales still come from physical stores. The 10 percent of sales occurring on the internet has been a growing share, but in many cases, consumers still want to touch the product. Many companies employ both means of shopping. Using multiple channels to target consumers is called “omni-channeling”. This is a trend we see growing.
Shipt has begun to affect the grocery store industry as a delivery service, but many consumers still want to shop within the store. In a recent survey, most millennials (81 percent) reported that they prefer the in-store shopping experience as opposed to shopping online for groceries. As the generation shift continues to take shape, the retailers will have become much more aware of how Millennials and Gen Z shop and what their shopping habits consist of, and so the development of concepts like Shipt will continue to enter the market.
Technology is continuously growing and it is unknown what the next concept or craze will be, but those retailers who do not adapt take an enormous risk of being left behind. The use of technology can either propel a retailer to the top of their respected category, or leave them far behind with an empty storefront.