If you work in retail or consumer industries, you’re well aware of the challenge that ecommerce is creating for brick and mortar stores. Sears, Kmart, Macy’s, JC Penney, and many more brands have announced the shutting of stores this year in response to this pressure.
But on the flip side, online-first businesses like Amazon, Birchbox and Warby Parker are buying and opening new physical locations. How is it that these companies can be successful with brick and mortar stores while traditional brands are closing up shop? They understand the importance of using the physical store location as a key piece of an omnichannel strategy: an experience center.
"I don't think retail is dead. Mediocre retail experiences are dead," said Neil Blumenthal, CEO of Warby Parker, in an interview with the Wall Street Journal.
"I don't think retail is dead. Mediocre retail experiences are dead." —Neil Blumenthal, CEO, Warby Parker
Bobbi Brown and Lord & Taylor agree. The pair have partnered up to launch justBOBBI, a set of concept shops (experience centers) at select store locations. These justBOBBI shops will include beauty, apparel, wellness and lifestyle products that will be updated monthly with on-trend seasonal items.
What are experience centers?
An experience center is a physical location that bridges the gap between ecommerce and traditional retail. It allows the consumer to research and shop in a variety of channels while adding additional value over an online-only transaction. The brands that do this most successfully create in-store experiences that are complementary to and integrate with their digital presence (True Religion does this well).
Why do experience centers work?
While ecommerce is an attractive and growing channel for consumer purchases, physical store locations like the justBOBBI concept shops have some unique advantages over online retailers at specific spots in the buyer’s journey. These include:
1. Identifying which products they may want to purchase
At this point, the consumer is determining which product(s) to consider to solve for her particular need. Brick and mortar stores have the advantage here because they are able to provide problem solving experts. justBOBBI can provide knowledgeable associates to guide a shopper toward the wellness supplements that best fit her lifestyle, for example, or the beauty products that address her skincare challenges.
2. Choosing which product to buy
For some products, it’s important for consumers to be able to check them out—to experience them—before deciding what to purchase. In fact, 86% of shoppers say they like experience centers where they can test out products. justBOBBI’s in-store shoppers can test out a lip color, see how a blazer fits, or smell one of Bobbi’s newest creations, the Stan Smith candle designed for the inn she and her husband are renovating.
Customers are more likely to buy an item when the prospect of returning it seems easy and convenient. Repackaging and mailing an item back seems cumbersome, which is why retailers with a physical location have an advantage at this step in the journey.
How do brands benefit?
Omnichannel shoppers have a 30 percent higher lifetime value for retailers than their single-channel counterparts. This alone makes physical experience centers an important piece of any retail or consumer strategy. Scott Neslin, Ph.D., explains that initiating a relationship with an engaging purchase at a brick and mortar store is an important first step to creating long-term, high-value customers.
For consumer brands, creating experience centers brings the benefit of direct interaction with and access to the retailer’s customers, rather than relying solely on distributers to push product. Retailers benefit from providing a unique, interactive and useful in-store experience that helps buyers along in their journey—and sets the brand apart to keep customers coming back for more.
Both retailers and consumer brands benefit from access to additional consumer data that can be used to fuel growth. For example, Birchbox says the stores they have opened are a kind of a lab, providing data that drives decisions in digital and subscription marketing.
Bobbi Brown explains, “There was such a new shift in our industry, and I believe that things have to be done differently.” She’s right. Traditional brick and mortar brands must adapt to the changing retail landscape, and consumer brands need to extend experiences beyond the browser to attract and retain the most valuable customers. Experience centers like justBOBBI are a great place to start.
About the Author
Karen, Harte Hanks CEO, has an experienced track record for winning, and she knows our business inside and out. Not only has Karen been a director of Harte Hanks since 2009, she also brings nearly 15 years of COO and president experience in the telecom, cloud and managed services industries in both consumer and business segments, stemming from her time at CenturyLink, Inc. During her tenure, she was instrumental in leading the company’s transformation from a local telephone business to an industry leader in advanced communications services, and driving revenue growth from $1.5 billion to more than $18 billion. Karen has a proven track record of successfully growing a company both organically and through acquisitions (she’s overseen 15 of them) and in navigating a business through shifts in industry dynamics. In addition to serving on the board of Harte Hanks, Karen also sits on the board of Entergy Corporation, a Fortune 500 electric utilities company.More Content by Karen Puckett