McKinsey & Company has opened its first brick-and-mortar retail store in the Mall of America near Minneapolis, which includes Elevé Cosmetics, Kendra Scott, ThirdLove and type:A Deodorant. The nearly 3,000-square-foot concept, called Modern Retail Collective, is designed to serve as both a retail store and a learning lab — a place where brands can test new technology and learn what resonates with their customers prior to implementing at scale.
“For the first wave, we wanted to pick a couple of brands that we thought were going to have an integrated experience for the customer,” said Tiffany Burns, Partner in McKinsey’s Atlanta office and leader of the consultancy’s retail stores practice in North America. “If you think about the store as it is today, with the combination of jewelry, intimates and beauty products throughout the store, it’s targeted towards a younger female demographic.”
“On that screen, the shopper can design the bracelet on their own versus waiting behind people in line,” Burns said in an interview with Retail TouchPoints. “You can design it yourself with unlimited combinations and metal types, colors and texture, and then have it shipped to you. It was a feature Kendra Scott already has in its stores but we basically took it and created the next generation of it.”
Mobile Product Access, Data Collection, Smart Mirrors Spearhead In-Store Tech
Solutions deployed throughout the store include:
- Interactive mobile hotspots throughout the store designed to provide customers with single-tap access to product details, including reviews, and allow them to add to their virtual baskets as they go;
- Smart mirrors with extended product catalogs and fit predictor software, allowing customers to try on items outside the fitting room;
- Integrated cloud infrastructure capturing cutting-edge data across the customer journey, turning the store into a data collection hub; and
- Payment options including RFID, mobile checkout and cryptocurrency capabilities designed to support faster purchases.
Participating technology partners include Microsoft, Square, RetailNext, Zebra Technologies, Chatter Research, Compass Marketing, ComQi, FaceCake, Farfetch, Flexa, MSM Solutions and Smartrac.
The technology augments the “learning lab” experience and empowers both McKinsey and the brands to discover more about shopper habits both within and outside the store. The concept and its data collection feel similar to b8ta, which focuses on getting shoppers to try out new tech products in its stores, giving its up-and-coming e-Commerce partners access to massive troves of data. The company, which recently opened a store in New York City’s Hudson Yards, can test everything from pricing to capture rates and dwell times, helping brands get a feel for how their products perform in a live setting.
“Everybody’s seeing the pressure and trying to figure out ‘How do I drive more people into my brick-and-mortar store?’ and ‘How do I make sure when they’re there that I deliver a new customer experience that makes them want to stay there, spend time and engage with the product so that they ultimately buy more?’” Burns said. “The traffic equation and then the in-store experience to get you to buy more stuff is what everyone’s trying to figure out on the revenue side of things. That’s why with these experiences, we’re aiming to track what customers do throughout their journey and which of those things are analytically proven to show that people buy more.”
McKinsey Store Journey: From Internal Lab To Serving Customers
Burns noted that McKinsey talked to approximately 30 retailers about potentially being involved in the store. The majority were elated with the idea, largely because of the difficulty they’ve experienced navigating a sometimes overwhelming technology space where new platforms are launched frequently. Additionally, retailers that wanted to trial these technologies didn’t want to disrupt their own stores yet, and felt they may not have had the right people internally to prepare the integration.
The McKinsey team initially planned on building an internal lab to test how the technologies would integrate in a retail environment, but various retail partners suggested that they create a customer-facing lab in a freestanding store.
“A lot of our clients are having a challenge trying to navigate all the potential technology and different customer experience opportunities out there and trying to figure out what really works, what really makes sense in their business context, where they should be thinking about retail investments and where the business case makes sense,” Burns said.
McKinsey says it will need at least 10 full-time store associates within the store. In early 2020, McKinsey will welcome new retail and technology participants, with each rotation of participants anticipated to last three to four months. McKinsey is forecasting that the Modern Retail Collective will remain open for at least 12 to 18 months.