Stephan Schambach is the Founder and CEO of NewStore, a modular, mobile-first omnichannel cloud platform for retail brands worldwide.
Throughout my decades-long career in e-commerce, I’ve watched the industry transform from a fringe business model into a multi-trillion-dollar global machine. Although the steady rise of e-commerce led many to predict the pandemic would spell the end of physical stores once and for all, demand for in-person retail is higher now than it was in 2020.
Believe it or not, three-quarters of all U.S. retail sales are forecasted to occur offline this year. And paradoxically, the next evolution of e-commerce may make physical storefronts more durable. In fact, I founded my most recent business on the premise that the era of isolated online and brick-and-mortar retail strategies is over.
I believe that going forward, innovative brands will apply a digital perspective to in-person retail—and unify offerings to deliver an improved customer experience across all channels. Here are four predictions on how that is likely to look.
1. Physical stores will no longer be “stores.”
The original purpose for physical storefronts was, quite literally, storage. Retailers needed a way to “store” inventory in locations that were accessible to shoppers. Now, rising property leases have prompted some retailers to relocate to smaller footprints—and many are finding that having less inventory on hand isn’t a disadvantage.
Modern retail and inventory technologies enable retailers to stock the bulk of their inventory in cost-effective warehouses and ship it directly to customers—even customers who place “orders” in-store. What’s the point of having a physical footprint when most purchases will arrive by mail? Why will shoppers even go to stores? The answer is simple: branding.
Stores are increasingly becoming a marketing and customer service investment—a physical extension of the brand. You can see this in luxury fashion hubs like Paris or Milan. Customers can only glean so much information from a Gucci or Prada website. For the full experience, they have to see the architecture, touch the products and feel the scarcity factor. Expect mainstream retailers to find similar ways to set their stores apart in the next five years.
2. Hardware will disappear.
Beginning in the 2000s, the retail industry replaced much of its antiquated hardware with modern payment terminals, credit card readers, receipt printers and inventory-monitoring RFID antennas. Now, many retailers may leave these tools behind, as well.
This transformation is already beginning. Tap-to-pay technology enables businesses to offload their payment terminals. The proliferation of NFC and Bluetooth-powered payment options will also reduce the necessity of cash and plastic credit cards, as will capabilities like “buy now, pay later” (BNPL) financing, which began as an online-only payment option but is now common at physical retailers.
As e-commerce capabilities become feasible for stores, retailers can add through subtraction. By ridding themselves of excess hardware, they can free up valuable real estate to create unique, immersive shopping experiences.
3. Stores will operate through a single device.
The end result of retailers discarding outdated hardware is that stores will primarily operate through software. Eventually, this software might even run on augmented reality glasses, allowing store associates to assist customers hands-free without having to look down at a screen.
For now, retailers can use mobile devices as their primary control center. It’s already possible for store associates to service customers entirely from their phones. They can place orders for items not available in-store, check product inventory across locations, process returns, check customers out from anywhere in the store and remain available for assistance after customers leave the premises.
In addition to these customer-facing tasks, modern retail software digitizes and simplifies backroom tasks like inventory management and cycle counts, enabling store associates to more efficiently track stock accuracy and keep customers satisfied.
4. Mobile apps are the new loyalty card.
Mobile apps are already emerging as the most powerful tool brands have to cultivate loyalty. Established retailers have undervalued mobile apps for years—in 2021, only 33% of retail brands had apps in place. But many fail to offer benefits that shoppers want, such as real-time inventory, exclusive promotions and chat capabilities. By incorporating these features, apps can better serve as a bridge between in-person and digital shopping experiences—while rewarding loyal customers with the most personalized experiences.
For example, customers can scan QR codes in-store to gain access to more comprehensive product info and branded content online. And after they’ve made their selection, they can use an app to complete their purchase—in some cases, without the help of a store associate. This seamless back-and-forth between channels helps retailers unify their in-person and e-commerce experiences under the same umbrella.
Apps can also benefit customers in ways they don’t see on their phone screens. Retailers can use the data that apps gather to deliver better service. For example, if a customer places a BOPIS order through a mobile app, store associates can receive the fulfillment request in real time and prepare it for the shopper’s arrival. Once there, the associates can be ready with the order when the customer steps in the door and suggest related products they might enjoy.
The channel conflict is over.
Look back years—decades, even—and you’ll find headlines heralding the rise of e-commerce and the decline of physical retail. But I believe it’s now clear that one is not destined to overthrow the other. Innovative retailers can lead the way by connecting traditional retail and e-commerce capabilities to offer customers greater control and flexibility over how they shop. In the future, the store’s potential as a marketing asset and value driver can finally come to fruition.
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