With labor costs continuing to rise, automating warehouses is a perfect testing ground for autonomous vehicles and robots. Backrooms at large retail stores is the next testing environment. Automated kiosks have already made major inroads in quick service retail (QSR) where they are being deployed rapidly to replace counter help and associated labor costs. The cost benefit will drive the adoption.
Five Below is an excellent example of how much experiences matter. As Five Below demonstrates, even shoppers in the dollar category care about experiences. The unique mix of value and in-store fun combined with an assortment strategy that is highly relevant to their target shopper drives their success. There’s a lesson here for retailers in every category.
Investing in people is definitely the right thing to do. Retailers are under tremendous pressure to deliver exceptional customer experiences. Sure it can mean being creative and innovative with technology and store design, but that will only go so far if the people doing work in the stores are not highly engaged and motivated. From the recruiting process to day-to-day work, retailers should treat workers like they are their most important asset.
Customers are craving authentic, ever-changing experiences. In this context, velocity is key. There is no doubt that modular, more adaptable prototypes that are much more likely to succeed than traditional prototypes.
Smaller and local stores have proven to be more successful, especially when located in mixed-used environments. And customers love having access to exclusive, new, even time-limited experiences. It is hard to do in giant places. Nordstrom and Macy's are definitely setting the tone by scaling spaces down and accelerating their constant re-invention.