The days of separating offline and online are over – and that also goes for retail. Successful brands are already providing their customers with a compelling brand experience, regardless of the touchpoint.
The branch of Macy’s on New York’s 34th Street is said to be America’s largest department store. At least for the time being. Jeff Bezos, founder and front man at
Amazon, the world’s largest online retailer, is looking to change that. The Internet giant is opening its first brick-and-mortar store in time for this year’s holiday shopping season – and ironically, it’s just a stone’s throw from Macy’s. It isn’t clear whether Bezos will expand on this experimental move and, if so, how he would do that. But he is certainly reflecting a trend: the radical division of physical and digital retail is a thing of the past. Successful brands are increasingly developing into omnipresent product providers – regardless of the channel.
“People will always want to touch, feel, and try on certain items and it is impossible to replicate that online.” – Dave Gilboa, CEO Warby Parker
With the idea of merging online and offline retail in an intelligent way, Bezos finds himself in good company internationally. The German mail-order company
Zalando has just opened its first brick-and-mortar store in Frankfurt. Zalando has been experimenting for some time with its own outlet store in Berlin, where it offers leftover stock, b-stock products, and items from the previous season that it has been unable to sell in its e-commerce shop. With this development, CEO Robert Gentz is attempting to combat the high rate of returned items that has been plaguing the e-commerce company since its foundation in 2008. It appears that the physical aspect of shopping is something people – even digital natives – cannot do without. It’s an experience shared by Dave Gilboa, CEO and founder of Warby Parker. The New York lifestyle label has been designing, manufacturing, and selling fashionable prescription glasses in its online store since 2010. Business is booming – not least because of the interactive “ try on feature” integrated into its web site. Nevertheless, now even Warby Parker considers a brick-and-mortar branch to be an important part of its business. “People will always want to touch, feel, and try on certain items and it is impossible to replicate that online,” says Gilboa, backing up his decision to open a 2,500-square-foot flag-ship store in New York’s SoHo neighborhood. “When we launched Warby Parker, we intended to be a purely online business, but we realized the biggest challenge to selling glasses online is getting the fit right.” What’s missing in digital shopping is, quite simply, the feel of the brand and product, the social factor of making a purchase, and the direct experience of picking up a product and taking it home with you.
A compelling shopping experience, regardless of the channel
Since 2012, Burberry has been showing the industry how the strengths of offering products in a physical space can be combined with digital features to create an all-encompassing shopping experience. This has made the British luxury brand into something of a role model for holistic omni-channel solutions. “Everything we do on burberry.com is reflected in Regent Street 121,” says Chief Creative Officer Christopher Bailey, summing up the strategy. It takes a great deal of technical effort to connect hardware and software with physical sales installations in a way that’s profitable, but this work is rewarded with enthusiastic customers and a clear competitive edge. It appears that the fashion industry has generally understood the idea that a sales strategy across all channels adds value. Paula Reed, Creative Director at mytheresa.com, speaks of a “money-can’t-buy experience” that the premium fashion vendor guarantees its select group of clientele – above all with exclusive offline events. In practice, this means the following: if Victoria Beckham designs handbags for mytheresa.com, they are presented in the Munich store – in the presence, of course, of the famous designer herself and to the delight of 60 hand-picked customers. A virtual brand that you can touch, with star-appeal guaranteed.
“It really doesn’t matter what percentage of sales are online – as long as customers are buying products from Media Markt.” – Wolfgang Kirsch, CEO Media-Saturn Germany
However, the hedonists from extravagant luxury brands aren’t the only ones to recognize the benefits of a compelling brand experience with maximum customer focus. Even down-to-earth retail concerns like the
REWE Group, for instance, have recently started to focus their strategy on their own e-commerce shop and grocery delivery service. It’s a further demonstration of how retail chains in all areas are no longer thinking about the “where” but rather about the “how” when it comes to selling their products. Wolfgang Kirsch, head of Media-Saturn, takes a clear stance in this respect: “It really doesn’t matter what percentage of sales are online,” he says, “as long as customers are buying products from Media Markt.” This is one of the main reasons why Media Markt is also showing all the signs of incorporating digital features into its brick-and-mortar stores, including drive-in counters where customers can pick up previously ordered products, or interactive smartphone assistants.
That digital sales assistants in the form of smartphone apps not only improve a customer’s shopping experience, but also create additional sales potential, is evident at
Walmart. Users of the Walmart app can compare their shopping lists with what is in stock at their local branch and, if it looks like any products are out of stock, can have them delivered directly to their homes. The result: app users make two additional visits per month and spend 40 percent more than those who don’t use the app. The only thing missing is a standard micropayment system that is brand and provider-independent and that, as far as possible, works around the world. Digital payment systems like Google’s “ Wallet” or “ PayPal” have been trying to create such a standard for years, albeit to no avail. The launch of Apple’s “ Pay” could be the turning point. Included as standard on newer Apple devices, there is a good chance of the payment system reaching a critical mass of users and therefore being accepted, in the medium term, by stores around the globe as an alternative to credit cards. Should Apple, contrary to expectations, not succeed here, Jeff Bezos could once again have an ace up his sleeve with his recently launched “ Amazon Wallet” payment system.
Text: Bastian Steineck
Illustration: Fabian Simon, grasundsterne
Translation: Toby Skingsley