Newsflash: The "Store of the Future" Is a Recipe for Failure

Mass retail is struggling.  Many of the iconic brands that are anchor tenants for the biggest and best malls are announcing layoffs and shuttering stores. Luxury retail is getting squeezed because of uncertainty in markets such as Russia, China and Brazil. The rise of Amazon and niche online players continues to dilute the remaining available market share. Retailers are under assault at every angle.

Commerce leaders are desperately competing to keep up with profitable industry giants that continue to redefine the shopping experience. For example, Target dedicated an entire team to its "Store of the Future" project, which aimed to put the retailer in direct competition with Amazon's forthcoming cashier-free Go stores. Target's "Store of the Future" was going to look more like a showroom, and would employ a team of robots to pick up items and bring them to customers at checkout. After a disappointing holiday season, the project was cancelled before it could ever see the light of day.

Target isn't the only retailer looking to deploy "the next big thing" in retail. While the company's intentions may be good, commerce leaders must come to terms with the state of ecommerce. The "Store of the Future" is meaningless if you're not delivering on your customers' needs today.  Customers want to easily locate a product and purchase it via the channel of their choosing, for the fastest receipt possible. Today's challenge is not about out-innovating the other brands – it's about helping customers discover, purchase and receive the products they want with as little  friction as possible.

Instead of focusing on magic mirrors or robots, retailers need to focus on the more technically advanced resource they have in each store - well-trained, empowered employees. They need technology and data that solves specific high-level goals rather than gimmicks, and they need executives who define very specific use-cases and solve for them, rather than boil the ocean.

According to Marshall Fisher, professor of Operations and Information Management at the University of Pennsylvania's Wharton School, the key source of competitive advantage in retail is better trained and managed front-line workers. The goal here should be to provide an ongoing benefit; gimmicks simply can't replace what a good store employee can do. Let's face it, retailers already have the best tool for personalized in-store experiences – their employees, and they're paying these people $12/hour.

For retailers to truly realize the benefits of their in-store associates, they need to provide them with a 360-degree view of the customer. Using historical purchase data is one way to accomplish this. For instance, an employee could look at the customer's past purchases at the point of sale and make a recommendation for a product that may also be a fit.

Technology and data are foundational to all of this, and 2017 should be the year that retailers stop and think about what they're trying to accomplish with them.  It's time for retailers to ask themselves, "what will actually benefit my customers?" and, "what will make them want to shop with me, and not with someone else?"

The Starbucks app is a great example of this. For customers, it is an easy way to pay and earn points for free drinks. For the Starbucks marketing team, it is a data collection machine. It is how they learn where you buy, when you buy and what you buy. They know what you buy when you travel, what you buy when you're home and the discounts you need to be incentivized to buy more. Knowing all of this allows them to deliver personalized communications to each customer and operate more efficiently as an organization.

Many overlook that Amazon's technical innovations have been devised to achieve one high-level goal – to provide the largest selection of products and deliver those products as fast as possible.  Amazon's drones, airplanes and robots have all been implemented to service this singular goal. They weren't meant to impress simply for the sake of innovation.

In a world where Amazon exists, how can the physical store be a valuable part of the customer journey? It all comes down to understanding what the biggest points of friction are for your customers. It's not rocket science – and you don't need robots to achieve these goals.  Retailers simply need to understand their customers, their shopping journeys and the pain points they face along the way. Data provides this information, if it offers a collective view of customer's cross-channel experiences. Only when marketers are armed with current and holistic customer data can they begin to address today's customer needs through better online and in-store experiences – and begin to think about the "Store of the Future."

Jared Blank is senior vice president of data analysis for Bluecore, a decisioning platform for commerce.
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