The Evolving Retail Climate



In today’s retail climate, shoppers are demanding an exceptional customer experience and with online shopping giving you access to virtually everything, retailers are pressured to design their stores to offer that experience. Not only can the design, location, and inventory of the store influence customer behavior, spending habits, and brand loyalty, retailers also have to engage the consumer with online experiences and be involved in social media to attract and keep customers.

Between 1999 and 2009, e-commerce grew by 400 percent; and with brands like Amazon and e-bay, one could assume that online sales are dominating. According to the U.S. Census, e-commerce only accounts for 9.9% of sales, however, most customers want the option to browse online. Brick and mortar stores are finding ways to bridge the gap of e-commerce and in store purchasing.

With current sales of U.S. brick & mortar at $3.9 trillion versus online shopping at $294 million, one would surmise that e-commerce is not an important factor. Offering the ability to browse online for merchandise, check prices, pick up in store, receive coupons, and read reviews, all impact the consumer’s decision to purchase. ₁In fact, 80 percent of shoppers want the ability to check online for product availability, and 57 percent are more likely to engage with location-based advertising

Social media also impacts consumer buying habits. ₁Twenty-five percent will consult social media before buying a gift; 62 percent share local deals with friends; and 85 percent of orders from social media sites come from Facebook. Social media can also be a forum for positive or negative customer experiences. More and more people are basing their decision to purchase on reviews from friends on Facebook, twitter, YouTube and websites such as TripAdvisor. In this viral world, poor customer service can spread rapidly. For example, when a passenger’s pricey guitar was broken on an United Airlines flight, he complained to airline employees and filed a claim. When United Airlines refused to pay up, he turned to YouTube. The video had more than 12.5 million views and led to widespread media attention. United Airlines quickly changed their decision and reimbursed him for his guitar.

There are several brands that have integrated the digital world with their brick and mortar stores. Starbucks was one of the first to offer free Wi-Fi and digital rewards. Sephora is testing a Fragrance Finder with an iPad app, and Nordstrom just introduced an app where you can design your own shoes and they also have a display in the store that showcases the most popular shoes pinned on Pinterest. With this new technology, and customers demanding to have interaction with the brands about how and what they buy, the future of retail should be evolving to attract and retain these engaged and tech savvy customers.

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