Retail News: Brick and Mortar Business Model Is Innovating as Consumers’ Shopping Habits Evolve

December 10, 2018 Sarah Cavill

Swedish furniture superstore IKEA recently announced they are opening a store in Manhattan. This will be the first of 30 newly branded “IKEA Planning Studios” the company aims to open in cities around the world. With features that appeal to urban dwellers, like small spaces designed with furniture that fits, IKEA is making moves to broaden their market and retain relevancy at a time when retail continues to move online. Other brick and mortars are attempting similar innovations, with technology that appeals to digital-minded shoppers and outposts that are experiential destinations instead of just transactional. In a parallel development, online retailers are opening storefronts to diversify their customer bases.

Sephora, Lowe’s and Nike Go Digital at Retail Locations

Integrative shopping experiences at brick and mortar stores may include digital in-store options. At Sephora, the Sephora Virtual Artists (SVA), powered by the AR/AI startup Modiface, lets customers try out their favorite brands of makeup with a simple selfie snap. This in-store gadgetry is an attempt to compete with Amazon’s significant market share in the beauty industry.

Lowe's VR virtual reality

Other retailers trying similar tech-centered enticements include Lowe’s Holoroom, a virtual reality (VR) experience that allows customers to “live in” their custom designed rooms, and Nike’s Nike Live concept store, which uses customers’ data from online usage to select stock and offers additional digital experiences throughout the shopping experience.

Flashy tech has its place, but customers have also indicated “frictionless transactions,” similar to one-click shopping from the comfort of home, best enhances their storefront experiences. Tech-based frictionless transactions may also include sales associates that help with checkout from various spots in the store, self-checkout and pre-ordering.

Samsung Offers an Experience Instead of a Purchase

Not looking to buy? No problem. Stop by. Enjoy a cup of coffee. Spend time in a VR session. Gawk at the giant three-story screen. Samsung 837 in the heart of New York City, offers shoppers a chance to get to know the Samsung brand. In the process, consumers may enjoy a live performance, take in a family-friendly day of holiday activities and develop an affinity for the brand. The 55,000-foot flagship opened in 2016 and was described as a cultural playground and a “physical manifestation” of the Samsung brand. This is similar to ecommerce retailers opening brick and mortars for a cross-pollination approach that appeals to a diverse range of consumers.

eCommerce is Expanding with Retail Locations

Millennial shopping AdWeek

The appeal of unique, hands-on shopping experiences isn’t just for existing brick and mortars. While main street and mall stalwarts try innovations to grow sales, ecommerce businesses are diversifying into retail locations, in a move that experts are calling “showrooming.” These retailers understand that millennials, in particular, may translate their on-foot browsing to online buying, and they are implementing marketing strategies that drive sales in both storefront and online settings.

Eyeglass retailer Warby Parker was among the first online stores to open a storefront, and others have followed. Warby Parker CEO Neil Blumenthal says, “We think the presentation by retail experts of either or [offline/offline] is a false choice. It really is the intersection of the two... And we are trying to approach retail expansion in a very deliberate manner, where we are testing and learning.”

Pop-ups, flexible floor plans, short-term leases, unique locations and geo-targeting are among the many methods retailers – including toy stores – are using when approaching where, how and when to open brick and mortar stores.

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About the Author

Sarah Cavill

Sarah Cavill is a Marketing Communications Writer at Digital Media Solutions (DMS), the fastest growing independent agency focused on performance marketing. Since its inception, DMS has evolved into a full-service performance marketing company that services firms within highly complex and competitive industries including mortgage, education, insurance, consumer brands, automotive, jobs and careers. DMS has achieved incredible year-over-year growth, which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016 and 2017.

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