Will new ‘stores of the future’ produce results for retailers in the here and now?

Discussion
Image: HighStreet Collective
Oct 01, 2019
Adrian Weidmann

As in-store experiential innovation and customer experience (CX) becomes increasingly imperative for brick-and-mortar retail, so has the need for measurement and validating quantitative evidence. However, in today’s hyper-competitive market validating proof is often shrouded in unsubstantiated claims of commercial success or PR polish. This has resulted in a parade of technologies over the past decade that apparently all provide amazing and irrefutable returns on their investment.

Although “stores of the future” have become increasingly popular, many of them germinate from internal store proof-of-concept labs. These labs implement a wide range of technologies from mobile applications to robots and move emerging digital ideas from concept into consumer testbeds. The challenge, however, is that they are not real stores—staged shoppers are brought in to use and engage with these concepts while being observed or intercepted for questions. While still valuable, critical insights are missed due to the unnatural setting and prompted responses.  

Last June, Atlanta-based HighStreet Collective addressed this issue when it unveiled its Living Retail Lab. Years were spent scouting for a “perfect store” from a CX perspective to embed what they refer to as “innovation sprints.” The goal was to put technology into a natural habitat and test various strategic and creative approaches to understand the impact. Citizen Supply, a high traffic store in Atlanta’s Ponce City Market, became HighStreet’s public retail partner. Their journey was made public from the first sprint onward with updates and videos. 

“I’ve spent almost 20 years in this industry on countless projects that can never be discussed on a stage. Although proud of many, I’ve always wondered what could have been had we been able to get every lever of the experience as perfect as possible, and measure and optimize to be sure,” said Laura Davis-Taylor, HighStreet’s co-founder. “Finally, we can–and we’re doing it using ready to scale, financially and operationally prudent technology.” 

Last week, a similar idea was unveiled from McKinsey & Company with the announcement of the Modern Retail Collective at Mall of America. Like HighStreet, it is a store intended to assess shopper technologies in a real-world setting via a group of participating test partners. With this store, however, multiple, advanced technologies are employed. McKinsey owns the store and uses integrated analytics. Inspired by pop-ups, McKinsey is rotating experiments with a cohort of brands, the end goal being to pave the future of brick and mortar.

“We have the perspective that stores are here to stay, and there is a lot of opportunity to improve how they perform,” said Tiffany Burns, a partner at McKinsey. “And we see our clients navigating all the change and trying to understand what they can really do to improve the performance, which technology is valid, what will customers accept and like, and everyone is ‘throwing things at it.’”  

DISCUSSION QUESTIONS: What is the real definition of proof of concept in your mind? Do you think labs focused on real-world proof will motivate retailers to move faster with new customer experience concepts and technology implementations going forward?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Everything a retailer does is a 'lab' today. Nothing is static for very long."
"Shoppers complain about the lack of newness in stores and less than stellar customer service. We need to fix that first, don’t you think?"
"Experimentation leads to innovation. Europe and Asia have been proving that for literally decades with stores of the future pilots. This is all good."

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10 Comments on "Will new ‘stores of the future’ produce results for retailers in the here and now?"


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Ken Lonyai
BrainTrust

Proof of concept is very simple: put it in a real store in a regular market and compare same store sales. And of course, don’t create too many variables (changes) at once. That’s it. Anything else is some form of manipulation or delusion. All businesses need to do due dilligence about everything and new retail technologies needn’t be an exception.

Jeff Sward
BrainTrust

Exactly. Test it. Measure it. Scale it. Next case. With an extremely vigilant eye on what others are testing. If it’s not scalable, then what has been proven?

Christopher P. Ramey
BrainTrust

Like concept cars, it’s not always transparent what is being tested. “Proof of concept” is no longer singular.

The new definition of “proof of concept” is more likely closer to “proof of many concepts.” It’s too expensive to do otherwise.

Everything a retailer does is a “lab” today. Nothing is static for very long.

Ricardo Belmar
BrainTrust
I’ve rarely met a retailer’s “proof of concept” that wasn’t deemed a huge success! Right up until the point where they attempt to launch the newly tested experience at scale, at multiple stores. And that’s where the unseen challenges come into play. So long as these proofs of concept are kept in a staging area or hidden away in lab-like environments there’s no reliable way to understand how the new experience will be delivered consistently at scale across dozens, or hundreds, or even thousands of stores. I can think of many conversations with retailers where the idea of scaling hasn’t included “hidden” technology areas like infrastructure (network, back-end servers, Wi-Fi, etc.) that always catch them off guard in real-world store environments. Living testbeds like HighStreet’s Living Retail Lab and McKinsey’s Modern Retail Collective are a great way to prove out real-world implementations with live shoppers. It’s still not going to help identify scaling issues so long as they are implemented at a single location, but it’s a great start to getting things out of the… Read more »
David Weinand
BrainTrust

It comes down to culture and resources. The concept of a lab to test new technologies or merchandising strategies is a good one and it is far more valuable if done in a real world environment. These are only as valuable, however, as those in upper management deem them to be – by setting up a culture of test and learn and fail fast – while giving the teams enough resources to ensure their success. There are still too many retailers who do not have this culture and are just getting by and not taking chances.

Georganne Bender
BrainTrust

Your headline “Will new ‘stores of the future’ produce results in the here and now?” is the important question. We all hear the initial PR pitches about stores of the future but the follow up on how they are progressing is weak. Certainly, projects like the Living Retail Lab will help with real world results.

But in the midst of store of the future talk there are retailers who are not producing in the here and now. Shoppers complain about the lack of newness in stores and less than stellar customer service. We need to fix that first, don’t you think? Shoppers read the same headlines we do. If they are so turned off by what’s (not) happening in stores right now, what happens in the future won’t be as shiny.

Ralph Jacobson
BrainTrust

Experimentation leads to innovation. Europe and Asia have been proving that for literally decades with stores of the future pilots. This is all good.

Dave Bruno
BrainTrust

Real-world testing produces real-world results, and the Living Retail Lab is an excellent model for experimenting and – most importantly – documenting how shoppers respond. Combining a real-world test with speed to results is critical, and I admire the Living Retail Lab’s sprint methodology. It represents an excellent benchmark for how retailers will need to adapt and evolve!

Kenneth Leung
BrainTrust

I think labs are important; the key to any proof of concept is defining the criteria of success to include scalability within the resources of the retailer to deploy. We have seen a lot of one-off proof of concepts that work in the lab/pilot store, but are never broadly deployed because the capital resources needed to do so is not feasible.

Ken Morris
BrainTrust

I believe these non-retailer “stores of the future” are somewhat of a joke. Real retail innovation is incremental and driven from retailer labs and proof of concept initiatives. McKinsey isn’t a retailer, they don’t hire retailers and never will. I would leave innovation to the folks who live retail every day. They just need to become innovators, not followers.

wpDiscuz
Braintrust
"Everything a retailer does is a 'lab' today. Nothing is static for very long."
"Shoppers complain about the lack of newness in stores and less than stellar customer service. We need to fix that first, don’t you think?"
"Experimentation leads to innovation. Europe and Asia have been proving that for literally decades with stores of the future pilots. This is all good."

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