Life After the Retail Apocalypse: Why Customer Experience Will Mark the Next Era


Since the start of the year, media can’t seem to get enough of what they’re dubbing the “Retail Apocalypse,” which describes the economic demise of major brick-and-mortars. This year alone, nine major retailers have closed their doors, liquidated, or filed for bankruptcy.

Experts are citing a number of causes disrupting the brick-and-mortar market, with increases in online and mobile shopping topping the list. Some are also blaming a saturated shopping mall market, in which the U.S. ranks highest at 23.5 GLA per capita.

But experts have also presented another cause of this seismic movement in the industry, which strikes me the most, maybe because so few are talking about it or because it’s the core of what I do for a living: create experiences.

Prior to 2007, retail was booming. Shopping—particularly in-store—was a favorite pastime for Americans. Shopoholics loved the experience of perusing hanging racks, scouring deals and making purchases. But once the Great Recession hit, Americans became much more cautious about how they spent their money. A new trend emerged in which Americans began moving away from buying things and moving toward buying experiences.

In fact in 2016, both the restaurant and travel industries set records, which gives us an indication of just how far consumer behaviors and expectations have shifted. According to the Federal Reserve Economic Data (FRED), “food services and drinking places” grew twice as fast as all other retail spending, and more money was spent in bars and restaurants than on groceries. Travel was no different, with 823 million travelers having flown domestically in the U.S. last year—the most in history!

For years, retailers have been warned about a looming apocalypse, encouraged to seek ways to transform to a customer experience that can transcend across the physical and digital worlds. Many of the retailers left today took heed and have created shopping experiences across the two worlds. However, some retailers have forgotten one key ingredient to make these platforms a success.

You guessed it. Experience.

To today’s consumer, shopping is about much more than going into a store or purchase an item online. It’s about what they experience while they do it. Is it personalized? Is it human-like? Is their engagement with the brand predictive?

While the term “apocalypse” implies a great disaster that gives birth to a new era, I don’t believe that in this instance brick-and-mortars are dead. Rather, this given moment in time is laying the foundation for the next era of retail that will be rooted in technology and seeded with connected data. This next era won’t be noted by things, and instead will be driven by experiences.

We’ve already begun to see a glimpse of how technology is transforming customer experience through emerging trends like beacons and connected devices. In some store locations, shoppers can now receive a heightened experience when personalized store coupons are sent to their phone while they’re in the given store. Or particular digital displays in the store will change in real-time, revealing information based on their past purchases or shopping behaviors. Similarly, connected devices can now push through contextual promotions that go beyond just general location to a brick-and-mortar, and incorporate complementing lifestyle offers.

In these two examples, technology is assisting consumers throughout the shopping journey, moving the needle beyond just selling goods, and toward an experience that’s personalized and interactive. It’s no surprise then why last year was the year of Conversational UIs.

Conversational UIs, commonly known as personal assistance devices (think Google Home or Amazon Echo) have the ability to connect a number of devices and offer assistance to users, ultimately creating a human-like experience. Retailers in particular have a real opportunity here to offer experiences that can bring the customer online or back in the store.

Consider the case of the United States Postal Service’s Informed Delivery service. Users who opt-in for the service receive an alert each day with images of mail that’s on its way to their mailbox.

Now imagine you’re a retailer. Your customer sees that morning that your seasonal catalogue is arriving, and that you’ve included an additional 10 percent off promo code with the image. This customer also owns a personal assistance device, so as soon as they walk in the door that evening, the device alerts them that they can take an additional 20 percent off in the store—with the nearest location being 3.4 miles away—and there’s a winter clearance running through the end of the week.

This isn’t some idealistic dream. It’s a reality that technology providers are working to make a near-term reality.

Consumers no longer simply crave the sleekest new sneakers or hottest new handbag. They desire the complete experience of discovery, consideration and purchase. We are in the very beginning of the Retail Apocalypse, but one that undoubtedly will recreate the wheel and evolve into a market driven by meaningful experiences.

Chris Hall, Vice President of Customer Engagement Solutions, Pitney Bowes

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