Retail Reinvention

Innovative Projects Are Driving a Brick-and-Mortar Rebound

theEdge

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RS No. 9 Carnaby Street’s virtual tour

Retailers are amping up the tech innovation—making their first moves toward what they hope is a brick-and-mortar revival. As many as 10,000 stores in the United States alone could close by the end of this year, according to Coresight Research, but the global retail sector is expected to see a 7 percent annual growth rate through 2025, according to The Business Research Co.

To help bolster the industry, teams are forging an omnichannel approach to rethink the customer experience and push retail beyond post-pandemic survival mode. Delivering long-term change amid uncertainty requires project leaders to turn consumer demand for technology and e-commerce into a shopping transformation. Now teams must adapt with agility and fine-tune their risk registers to prevent history from repeating itself.

“Retail has always been about innovation and adapting in the face of change,” says Katherine Cullen, senior director of industry and consumer insights, National Retail Federation, Washington, D.C. During the pandemic, she noted, businesses of all sizes began focusing on social selling or launching video appointments to answer customer questions. Now teams are leading projects driven by fashion mainstays, rock music royalty and more to make bigger, bolder and—they hope—more lasting pivots.

The New Hybrid

When The Rolling Stones opened its first brick- and-mortar store—and the world’s first permanent retail space by a musical act—in September in London, the band partnered with Bravado, the merchandise and brand management arm of Universal Music Group. Together, they leaned into a hybrid shopping model for customers, combining physical and digital experiences.

To enhance the in-store experience at the RS No. 9 Carnaby Street store, the team integrates technology throughout—from 90-inch-wide (2.3-meter- wide) portrait screens that play video, including archival band footage, to two large, 3D-printed versions of the band’s iconic tongue logo. Two months after opening, the team launched an online companion to the store, featuring a 360-degree immersive shopping experience.

There’s plenty of motivation for teams to push out digital-first experiences. Only 55 percent of customers feel safe visiting a physical store, according to Deloitte surveys data published in February. However, some teams are creating more experiential projects to deliver heightened experiences that will increase brand affinity, attract a younger demographic and drive sales long after the pandemic subsides.

Knowing that many of its customers around the globe would be unable to shop in person, U.S. fashion company Ralph Lauren unveiled the RL Virtual Store Experience in November. Visitors can take virtual trips to iconic stores in Paris, Hong Kong, Moscow and other major cities. It also included a virtual gaming element.

“With the virtual store program, our goal was to reimagine the experience of walking into and shopping a Ralph Lauren retail store through an augmented reality experience,” David Lauren, chief innovation and branding officer, told Forbes.

Those plans were already in motion as the company sought to cultivate loyalty from younger, tech- savvy shoppers, but the pandemic created urgency to deliver those digital offerings, Lauren said.

“Our key business priorities are to win over a new generation and to place an emphasis on leading with digital,” he explained.

Retail Reboot

Retailers that already had invested in tech and omnichannel platforms prior to the pandemic had a strategic advantage, says Cullen. But both first movers and laggards will have to anticipate and adapt to even more coronavirus-driven shifts in retail as the supply chain transformation and wave of direct-to-consumer selling encroach on the status quo.

After Walmart launched pilots to revamp its stores with self-checkout kiosks, contactless payment, scan-and-go options, as well as other integrations with its mobile app, the big-box retailer was working on scaling those upgrades to 1,000 stores earlier this year.

“By creating a system that acknowledges our app navigation from beginning to end, we create an optimized omni experience for both customers and associates,” Janey Whiteside, executive vice president and chief customer officer at Walmart, said in a statement.

But retailers appear confident that in-person shopping will remain strong in a post-pandemic marketplace—and teams are launching initiatives in response. Other U.S. chains such as Tractor Supply Co. and Burlington went all in by opening more brick-and-mortar stores in 2020.

“COVID-19 has accelerated the trends we’ve seen over the past few years as retailers reimagine the customer experience, blending online and offline channels,” says Cullen. “Even prior to the coronavirus, consumers had embraced the change.”

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—Katherine Cullen, National Retail Federation, Washington, D.C.

Shopping List

Retailers are prioritizing these categories for investments in 2021:

88%

Digital acceleration

78%

Supply chain resilience

78%

Health and safety

72%

Cost structure realignment

Source: 2021 Retail Industry Outlook, Deloitte, 2021

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