Brick-and-mortar retail’s most important renovation: The workforce

JULY 2018

Marcie Merriman, executive director in the Americas Advisory practice at Ernst & Young LLP and Retail Dive contributor.

Consumer Experience
Workforce
Brick & Mortar

Want a look at the future of brick-and-mortar retail? Stop by your local REI store.

There you will find associates who are passionate about the outdoors, who have used the gear the store offers and can tell you exactly what you need for your next skiing holiday or camping trip and exactly how to use it. Their employer picks up the tab for field trips and supplemental training, treats associates with respect, and pays them a living wage that signals management’s high regard for its workers and what they have to offer. No wonder those associates are so excited to get to work in the morning.

Operators of physical retail outlets might want to take notes on what REI is doing and apply its lessons to their own stores. Rather than devoting all their time and resources to building out their online capabilities and squeezing out costs, they might consider redirecting some of their focus to improving the physical retail experience for their customers and associates. Like REI, they could invest not just in capital projects, but in people with relevant expertise.

As consumer experiences evolve, so do the long-established rules of retail. For example, many retailers today continue to maintain roughly 80% of inventory in basics or items that consumers purchase on a consistent basis. The other 20% are the special, unique or limited-edition items – the things that can surprise and delight shoppers. But the 80/20 rule of the future looks much different. As technology advances and consumer expectations evolve, expect 80% of goods to be acquired autonomously. Consumers are already embracing the outsourcing of many retail experiences to analytics and smart devices — handing over the automation of hunting, negotiating, purchasing and delivering goods. Hitting 80% in the near future is not much of a stretch.

The other 20% is where consumers will expect to have fun with their shopping and purchases. These are the items they choose to be highly involved in acquiring, and their experience expectations will be off the charts. The new role of the store will be to enable these experiences through high-touch human interactions, made possible by passionate and knowledgeable associates.

 

For most senior retail executives, gearing up for the future of brick-and-mortar and the new 80/20 rule means venturing deep into unfamiliar territory. It means understanding why, in a world where just about any product or service is instantly available online, shoppers would bother to visit a physical location. It means recognizing that shoppers would make the trip because they need something more than what they find in the digital world: face-to-face contact, empathy and deep expertise. Whether they want to figure out how to hook up a smart home, what dress to wear to a formal dinner, or what to pack for that dream wilderness vacation, they want to talk to someone who can offer them more knowledge and personal understanding than they can find with a quick online search.

That sort of high-value, high-touch interaction just isn’t available at stores that treat their associates as fungible commodities and their stores as product-fulfillment centers.

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