Watch the recap of "How D2C Brands Are Defining The Future of Retail," the latest in BrainStation’s Digital Leadership Event Series.
When we talk about user experience (UX) in the context of shopping, we usually refer to the digital sphere, where UX Designers help to ideate, test, tweak and optimize every element of websites, apps and other products to ensure users will have the best-possible end-to-end eCommerce experience.
But the same principles that have made UX Design such a crucial part in online shopping – that good design puts people first, blends eye-catching esthetics with an unwavering commitment to usability, and is backed by rigorous research and testing – are having a transformative effect on brick-and-mortar retail, too.
It’s worth pointing out just how important that is. U.S. Census data showed that eCommerce sales comprised 11.2 percent of total sales in the third quarter of 2019. So while eCommerce continues to take on a larger role in the overall retail landscape, it’s clear the vast majority of purchases are still being made in person at physical stores.
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“The reality is, the store is still the foundation of retailing,” observed BRP, a retail management consultancy, in its 2019 Special Report: The Future Store. “It is where the tactile and sensory experience comes together for the consumer.”
And companies adopting UX principles for all customer interactions – online or otherwise – are thriving; research by SAP, Siegel+Gale and Shift Thinking found that today’s top brands treat their customers as users, not buyers.
In fact, the world’s top companies are getting quite creative in how they apply UX design concepts to optimize the experience of the people coming through their stores. Read on for a few of the ways UX has impacted retail.
Invasion of the Pop-Ups
Although we’ve pointed out that most shoppers are still making purchases in person, a store’s online presence is still crucial. Data shows that 63 percent of shopping occasions begin online, but the lines between the experience of shopping online and in-person are getting blurrier and blurrier as companies focus more attention on user experience.
One example of how that’s manifested? More online retailers are pushing to establish physical spaces, if even for a short time in the form of pop-ups.
Digital retailers like M.Gemi, Casper, and Allbirds have used pop-ups to introduce new products, to allow potential customers an up-close look at their products, and to generally create buzz and real-world visibility for their brands. Beauty startup Glossier has gone all-in on pop-ups, generating major media attention last year with six-to-eight week stints in cities including London, Seattle, and Miami. Clothing retailer Everlane, meanwhile, opened a few physical stores that don’t actually hold any stock so that potential customers could try on their wares before completing their purchase online (with free shipping).
Online retailers that open brick-and-mortar locations report a five- to eight-fold increase in sales. But more than that, they also help to establish a relationship with customers and help potential buyers get a better feel for their products.
“Stores serve as showrooms that drive customers online,” wrote Steven Dennis in a Forbes op-ed warning Wall Street firms against closing too many physical stores. “Stores serve as fulfillment points for eCommerce operations. Stores are billboards for a retail brand.”
Beyond online retailers looking to establish a physical presence – and perhaps a closer relationship with customers – the pop-up is also being used by established brands to lure shoppers in with one-of-a-kind experiences.
Muji opened a pop-up apartment in London to introduce its new home and clothing collections, inviting customers to masterclass workshops on topics including storage, Japanese beauty tutorials, and Instagram photography, while in New York the brand offered up a DIY essential oil bar and an embroidery service.
Well-established department stores, meanwhile, are increasingly bringing customers back by partnering with in-demand brands for splashy pop-ups. The first four floors of Bloomingdale’s locations in New York, L.A. and San Francisco feature the Carousel, a 1,500-square-foot “pop-in” with fresh designs and merchandise produced every two months.
These pop-ups rarely just offer products; they instead try to bring other experiential benefits to not just bring customers through their doors, but also create a deeper connection to their brand.
“One of our big focuses is to create these ever-changing and very exciting elements to continue to drive customers to our stores,” said Justin Berkowitz, Men’s Fashion Director for Bloomingdale’s. “I really think that for the future of retail, (it’s important to make) brick-and-mortar a place where the customer really wants to come.”
Using VR and AR to Improve the Shopping Experience
There’s at least one advantage brick-and-mortar stores have that can’t be replicated on the web or your phone: the opportunity to showcase innovative new tech installations.
And many companies are understandably rushing to load their flagship stores with innovative new tools that most shoppers have likely never seen before.
But the tech isn’t just about wowing guests with cool gimmicks – in fact, it’s all oriented around providing the best possible user experience.
For instance, how many of us really enjoy the process of dragging piles of clothing back to a cramped changeroom to see what fits? Well, Bloomingdales, Nordstrom, and Selfridges have all partnered with 3D-body-scanning companies to help customers find the right fit without the changeroom headaches. A customer can get scanned in-store and the software then compares the measurements with the exact dimensions of the clothes on offer.
Retailers are doing impressive things with augmented reality, too. Consider Ikea Place, an augmented reality app that allows shoppers to choose one of the furniture giant’s colorfully named products and drop it into their own home to see how it looks before buying.
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Adidas, meanwhile, used AR to deepen the connection between its customers and its products. The shoe company’s Parley collection of shoes is made from plastic trash collected from remote beaches and coastal communities. The company installed AR displays in its retail stores that – with a snap of a photo from a customer – would physically show how the shoes on the shelf in front of them were created from recycled materials.
Conscientious shoe brand TOMS used virtual reality to similarly help customers to understand the brand’s social impact. The company’s 360-degree Virtual Giving Trip lets potential customers see the impact of TOMS’ one-for-one business model by allowing them to virtually travel around the world and experience first-hand what it’s like to give a pair of TOMS shoes to a child in need.
Finally, some companies are using the latest tech to both pamper their guests and give them all the benefits of shopping online in their brick-and-mortar locations.
Rebecca Minkoff’s “connected” stores offer a range of impressive tech tricks to help ensure the best possible customer experience (they’re also smartly collecting data on which items are taken to the fitting room and whether those garments are then bought or left behind). The company’s sprawling Soho store features interactive screens that look like mirrors when they’re not activated. If shoppers give them a tap, they can browse company-curated lookbooks or order a free coffee or a glass of champagne.
Further, RFID tags recognize all the items brought into the fitting room, and shoppers can then pull up screens showcasing the clothes styled in various ways, or browse other available size or colors.
The technology – powered by eBay – led to sales tripling at that store.
“People have focused on organizing stores around products, but our vision is organizing stores around customers,” said David Geisinger, eBay’s Head of Retail and Mobile Innovation. “Customers are demanding more experience, more engagement, and the feeling and the activity of shopping is more important than it used to be.”
An Experience You Can’t Have at Home
Since online shopping is generally the most convenient option, many brands are working overtime to make sure that a visit to their store is worth the time and effort.
More and more, retailers are offering experiences and services that extend far beyond their central product offerings.
Consider the recreational apparel company Outdoor Voices, which has stores and pop-ups in cities around the U.S., none of which feel alike, instead reflecting their local environments. The brand’s San Francisco location pulls out all the stops, with a tearoom, in-store yoga classes, and meet-ups for jogging or dog-walking.
“We think of each store as a resource for recreation, and each needs to flex locally based on both the area and what type of activities people like to do there,” said Founder and CEO Tyler Haney.
Other companies have opted to invest in at least one landmark location that serves to make people excited about their brand. Reinforcing the company’s connection to skateboarding culture, House of Vans London, for instance, is a 30,000 square-foot space that spans an art gallery, an artist incubator space, a cinema, a live music venue, a café and bars, a skater-built concrete bowl, mini-ramp, and street course.
Even Apple has in recent years refreshed its stores to provide an even better experience for customers. In 2016, Angela Ahrendts, the company’s Senior Vice President of Retail, unveiled innovations that included a tree-lined Genius Grove (replacing the Genius Bar), the introduction of “Creative Pros” offering specialized advice on a range of artistic topics, and a new program where customers would have the opportunity to attend sessions and community events within the Apple space.
“It’s funny, we actually don’t call them ‘stores’ anymore. We call them ‘town squares’ because they’re gathering places for 500 million people who visit us every year,” Ahrendts said. “We view our stores as a modern-day town square, where visitors come to shop, be inspired, learn or connect with others in their community.”
In the world of eCommerce, brands are increasingly focused on trying to anticipate what you want and when you want it. According to the Boston Consulting Group, companies that use advanced personalization methods can realize an improvement of 20 percent or greater in their net promoter scores, while seeing incremental revenue growth of 10 percent or more.
Of course, the flow of data available online makes it easy to know everything about the people browsing your web products. You don’t have that same treasure trove of background information about the people physically browsing your store, but that’s not stopping brands from getting creative about personalizing brick-and-mortar shopping experiences.
One effective method? Loyalty programs. According to BCG’s numbers, 130 million Americans are now members of a restaurant loyalty program, more than twice as many as in 2015. More than two-thirds of diners are members of at least one such program, and a quarter belong to three or more. BCG’s numbers show that restaurant companies with “well-defined, strategically executed” loyalty programs can boost incremental revenues by 10 to 15 percent.
Let’s look at Starbucks, whose loyalty program is hailed as an industry leader. Starbucks tailors messages and offers to its members based on their past ordering habits. Haven’t had a latte for a few days? Starbucks might lure you in the door with a half-price offer, or by enticing you with bonus stars.
It’s been a huge success. According to Starbucks’ 2019 third-quarter results, active Starbucks Rewards Membership in the U.S. increased 14 percent year-over-year to 17.2 million users.
“They have made massive investments and made progress on personalization, ahead of what I would say other restaurant brands to date have been able to accomplish,” said Mary Martin, a Partner at BCG.
Other companies are tapping into apps to personalize their brick-and-mortar stores. If you walk into a Best Buy, for example, the app will enter “local store” mode with relevant push notifications, while Nike app users at its midtown Manhattan flagship can tap into advice from one-on-one stylists or create customized products.
Even those companies that aren’t yet able to leverage technology to offer a personalized in-store experience in real-time can do more to cater to their customers. The same data that provides such valuable insights about a store’s online users can be leveraged to create an in-store experience that appeals to its unique customer base.
“Something that we’re focused a lot on right now is using all of this data, and feedback, and information to personalize experiences,” said Mary Anne Savoie, Director of Customer Experience at Mejuri.
“It’s no longer ‘who is our target market?’ but ‘who are our customers?’ Each persona deserves to be communicated to uniquely.”
Technology has also allowed retailers to take personalization to the next level by creating customized gear on the spot. The Nike By You Studio uses augmented reality, object tracking, and projection systems to allow users to make custom kicks they can pick up just an hour later, while luxury handbag brand launched the Coach Create design-it-yourself experience at its New York flagship.
Meanwhile, Ministry of Supply permanently installed a pricey 3D-knitter in its Boston flagship to allow customers to design and create their own blazers (and other wares) on demand. Ministry of Supply Co-Founder Aman Advani said that giving people the option to customize products isn’t just about generating sales, but more about the overall experience.
“These stores transform into places where you go to learn more about the brand, to help create your product, to understand who is behind the product, to connect with the person who your online inquiry was answered by,” he said.
“They become much more beacons of the brand and much less just transactional retail machine.”
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