Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.
At some point, mature retailers in mature markets will not be able to drive enough growth to satisfy investors purely by opening new stores. But omnichannel retailing may hold the key to making existing stores more productive.
Here are just a few ways to drive revenue growth out of existing stores:
Store as physical touch point for online order pick-up and returns. A lot of retailers are doing this today, and even more are looking to do it in the future. The right balance has to be struck between ensuring that the store gets a shot at the incremental trip vs. annoying a customer by forcing them to trudge through the entire store to get their online order.
Store as local DC. I've heard retailers pushing back against landlord's rent hikes, saying, "You're not driving traffic to my location." If people don't come, then why should the retailer pay more? Well, it may be that retailers need to bring the products to where the traffic is — the home. If stores are considered more holistically as part of a supply network, it will enable the retailer to drive more overall customer value by being faster and more responsive to local shopper needs.
Store as call center. Store associates can gain a lot more interaction time with customers if they sometimes fill call center roles, which also helps them get better at customer service. Associates can also connect local callers to local resources. This is an invaluable way of building local relationships — relationships that translate into a greater willingness to come to the store to meet that helpful associate in person.
Store as customer service center. REI offers bicycle repair services and Best Buy provides the Geek Squad. I firmly believe every retailer can come up with services to accompany their products. Executing on this is not easy, but if you want to drive additional value out of existing stores, services are a great way to drive repeat visits as well as build that local relationship with the local consumer.
There are many more ways to rethink the store to drive more revenue. Some will require investments in order to generate a return. Some will take time. What's expected from store associates will have to change.
But the traditional brick & mortar way of thinking — "Marketing must drive traffic to my stores" — may have to be retired. Stores asking, "How do I utilize my store location more in order to drive sales?" have an opportunity to differentiate themselves. "Selling stuff" will always be the primary objective of a store, but how that store achieves that objective — omnichannel is changing that. For good.