The first half of 2019 confirmed that the retail apocalypse many industry experts once predicted is not on the horizon. Instead, we’re in the midst of the next phase of a “retail renaissance,” where customer experience reigns supreme. This shift is evidenced by the creation of innovative store experiences, retailers teaming up with direct-to-consumer (D2C) brands, even better buy online/pick up in-store (BOPIS) incentives and one-day or same-day delivery.
Retailers want to make the most of their brick-and-mortar presence while creating unique and memorable customer experiences. For example, Nordstrom recently announced plans to expand Local, its service-centered stores that offer amenities such as online order pickup, tailoring and manicures to drive foot traffic and enrich the in-store customer experience. This strategic concept will likely continue to be leveraged by retailers as the year goes on.
Another approach retailers are taking is partnering with their competitors or other retailers to streamline returns and deliveries, and to improve upon other key processes. Amazon has teamed up with Kohl’s to allow its customers to return products purchased on their marketplace at more than 1,000 Kohl’s locations. Through the partnership, Amazon is strengthening its Achilles heel, expanding its brick-and-mortar presence and leveraging Kohl’s stores to sell its own private label clothing, groceries and household products. Other retailers like Walgreens have jumped on this trend by letting shoppers return their online purchases from their competitors at their brick-and-mortar locations.
What’s more, D2C brands — which have exploded in popularity over the past few years — are now disrupting the traditional retail scene by partnering with retail powerhouses like Target to test the waters before breaking ground on their own physical store locations. For example, a few of the trendiest D2C brands, like Harry’s, Casper and Quip, all have found homes in Target. While D2C brands continue to gain steam, we will likely continue to see them pop up in other retailers’ stores because it’s a win, win, win scenario: the traditional retailer has the opportunity to offer a highly sought-after brand to its customers; the digitally native brand is exposed to new consumers; and the customer gets a great experience.
Perfecting the BOPIS method is going to become critical for retailers trying to maximize their physical footprint without needing to open more brick-and-mortar locations. By working together and allowing customers the freedom and convenience to buy items through one retailer and pick up from another, traditional retailers may finally put the “retail apocalypse” behind them.
As the holidays approach, retailers will likely set their sights on another aspect of the customer experience — delivery. Amazon and Walmart have been going head to head in the race to win fastest delivery, with both announcing (within a month of each other) free same-day delivery.
Recognizing how critical customer experience has become, many major retailers and D2C brands have launched new strategies in an attempt to solidify their consumer bases by connecting directly with them to maintain brand loyalty. To compete in this new phase of the “retail renaissance,” all of them will need to think creatively about how they can improve overall customer experience. It will be interesting to see what new strategic partnerships emerge, as they will likely lead to increased in-store foot traffic, brand loyalty and sales.
Erik Morton is CommerceHub’s Senior Vice President of Product & Strategy. He has over 15+ years of entrepreneurial experience in e-Commerce (12 years) and edTech SaaS (3 years). His entire career has focused on building and launching new software products. This cross-functional experience has led to a knowledge base that spans technology, finance, strategy, operations and marketing. Morton has written production code, managed cloud-infrastructure, streamlined and automated invoicing and payments, built financial models and investor decks and published articles in industry outlets.