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Retail

It’s about the brand, not about the store
By Bruce Dybvad

In 2011, boundaries continued to blur as resurgent retail inspired the industry with creativity and challenged traditional ways of doing business. As the store evolves into a fluid idea that serves the mobile, global customer in search of new experiences to share, the degree of complexity escalates for retail businesses. Brands are evaluating the role that their stores play and keeping their eyes on digital opportunities.

A coming crisis of relevance?
Is the concept of “store” obsolete? Now that consumers can shop the world anytime from anywhere, the expectation of having every need instantly satisfied is sky-high. Product searches begin “in the cloud,” largely unattached to a physical store of any kind. Shopping is not an isolated event. Like our lives, it now streams simultaneously online, with our thoughts and decisions publicly shared and reviewed by our personal networks.

This new flow of life has led to a different idea of what constitutes a store. People no longer distinguish between physical and virtual channels. Today, a retailer must think of itself as a moveable feast—an engaging entity with values, moods, and emotions, as well as commercial, social, and educational aspects.

For that reason, the idea of leading by brand—the values and meaning that define how a retailer does business—is a highly relevant business model that is stable yet adaptable to these fast-paced times.

Take, for example, the growing trend in online shopping for routine purchases. It challenges the monotonous chore of shopping the “center” of a store and questions the viability of millions of square feet in the grocery category alone. Retailers that fail to understand how this impacts shelves and categories may find their mall-based stores abandoned. In the same way, stores that fail to provide engaging experiences or easier-to-shop layouts may fall out of favor. No company can survive today without a burning desire to engage the customer—nor can it thrive without a strong point of view and passion. Without imagination and innovation, many stores are in danger of becoming rusty relics of the past.

Rethinking size
Last year, big-box vacancies shook retail real estate. Although these retailers won’t be disappearing entirely, consumers’ desire for easier shopping, inviting environments, and closer locations—not to mention the impact of multichannel shopping—is changing the shape of the store. In the U.S., Walmart, Target, Best Buy, and Gap, among others, have small concepts in the works or are adapting existing formats. Similarly, in Europe, brands like Carrefour continue to move beyond hypermarkets to alternate formats like Carrefour City. However, a smaller footprint is no magic bullet for retail. Stores need to be simultaneously optimized across the dimensions of brand, space, and finance.

Backlash and balance
Last year, the frenzy for apps, augmented realities, and the pressure to jump into social media had retailers madly assembling patchworks of digital tactics while the ground was still shifting. Now that brands have a greater understanding of the landscape through trial, error, and observation, they’ve gotten past the novelty of digital—such as Macy’s short-lived magic fitting-room mirrors—and are concentrating on what’s relevant. Many brands now have the self-awareness and confidence to say, “Maybe we don’t need to be on Facebook.” Surveys suggest that 70% of retailers use social networks for branding and marketing, but only 38% feel they add value and 56% feel it’s too early to gauge impact. Of the 30% of retailers that do not use social networking sites, 63% do not plan to start.

Apps have garnered a lot of attention, but despite all their promotion, few retailers have succeeded in developing truly useful offerings that engage consumers on an ongoing basis. Vitamin store GNC created a special feature for its app that reminds customers to take their supplements. Its barcode scanner, regimen reminder, and deal promotions keep customers interacting with the brand. To make the most of the mobile investment, promotion and functionality are key.

Just when you think you have retail all figured out, a wave of change rolls through the industry, upending paradigms and shaking up sleepy companies. According to Gary Hoover, entrepreneur and retail history buff, the single most important thing a retailer can do, even in the era of global retailing, is focus on the people and the merchandise. The basic premise of “right time, right price, and right customer” is timeless. The twist is that today, in the age of omni-channel retailing, it’s that much tougher with all the paths available to retailers for delivering value. Great retail brands will activate consumer engagement opportunities to fit customers’ wants and needs -- any way and anywhere they like.

For more retail insights, read our complete State of the Industry Report on www.interbranddesignforum.com.