Since 2007, RSR has conducted an annual benchmark of the state and condition of the stores. This is one area that we hope to see improvement from previous years’ respondents. Many of us are disillusioned by how little the shopping experience in the real world has changed. The way we use our personal technology has drastically changed the digital experience. Stores remain boring, uninteresting, and dusty. We hope that our retail respondents will report some changes, but they are honest and have been telling us for years the same thing: “Nothing to see here.”
However, our 2019 report brought us the results we had hoped for. Retailers have big plans for their stores. Retail winners (those with sales that exceed the average) are planning major changes to their stores, as opposed to just 43 percent of the average or underperformers. Another 58 per cent of retailers are planning to open new stores within the next few years. 56 percent plan to open stores entirely in new markets and 52 percent plan to replace existing stores.
Since we began our annual Store Report, we haven’t seen such data.
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What’s even more interesting is the fact that many retailers believe that technology holds the key to making their stores work, both in new and old locations. According to a staggering 68 percent, technology gives them the competitive edge they need in order to remain relevant. This is up 20 percent over 2018. Retail Winners have a higher percentage. Retail Winners anticipate that their employees will be more involved in selling activities over the next two-years — almost twice the rate of their competitors — and 56% believe that technology is the key to their employees’ learning.
This data also informs us about many trends and the ones that retailers see as having immediate value. These topics include Amazon Go and “the cloud” store technology. The research reveals a direction story that we have long wanted to hear. Retailers had previously told us that traditional roles would be retained by stores, but they now see great opportunities to transform them. One of the most encouraging findings from the survey was that retailers recognize the importance of stores serving as fulfillment centers for online orders. In the past, online orders were viewed as a novelty. Now, retailers see this as a huge profit opportunity.
The New Age of Retail Tugs at Consumer Emotions
Today’s consumers are highly educated. Traditional hard selling doesn’t work as well today. Regardless of technology or immersion, shoppers are willing to open their wallets for an experience. Brands must adapt to the changing purchasing habits of consumers and follow their lead.
Toys”R”Us relaunched (fueled by TRU Kids Brands, its new parent company) is an example. After filing for bankruptcy in 2017, the toys brand has re-emerged. It has moved from its traditional retail model to new concept stores with b8ta. This software-powered retailer will allow parents and children to enjoy highly curated toys and games in a more intimate setting. It is also worth noting where the first stores will open. TRU usually has a standalone retail presence. However, this new format will be tested at mall locations.
Be a Destination
It’s a great way to make your products more accessible to consumers. Funko, a collectible company that is deeply connected to pop culture, has had success with its Seattle destination store. Here, fans can get first access to new products. The store is an experience in itself… there are surprises and delights around every corner. It also serves as a meeting place for fan clubs, events, and other activities. In Hollywood, Calif., a second location of 40,000 square feet is planned to open in the same year.
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According to License Global’s top five retail activations in 2018, Universal, which owns the “Jurassic Park”, movie franchises and licensed products, is another smart experiential retail activation. Jurassic Park Dinosaurs Roar is one of the latest projects. This is an excellent example of how to create a “store” that drives foot traffic. Walmart and AMC Theatres collaborated to bring new content to the game, including a Walmart-branded supply drop, photo filters, and other rewards. AMC Theatres could be visited by players for a specific time period to find AMC-branded capsules and incubators that have valuable in-game resources, such as dinosaur DNA. Universal managed to keep Jurassic goods relevant and fresh by utilizing experiential activations beyond the traditional retail space.
Today’s consumers are more willing to travel in search of the perfect Instagram photo. Social media is a low-cost form of marketing that offers retailers unlimited potential. There are thousands of brands competing to get consumer market share. Brands are organically promoted to new audiences by people who want to share their lives.
The Japanese-owned brand Line Friends, a character brand franchise, has had great success with experiential marketing. Line Friends recently opened a store in Hollywood, Calif. and attracted 18,000 people on its first day. Although the store featured only a handful of brand characters for photos, there were thousands of Instagrammable moments captured.
Similar to the FENTY Beauty line promotion, Rihanna invited customers to test her makeup line at a Madison Square Garden Pop-up in New York City. Rihanna’s faithful fans attended, and hundreds of people took photos and purchased her products.
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While traditional retail may still be around, boring retail is in decline.
Retail activations are the new way to engage with customers. This business model is proven to drive sales. It also gives brands the opportunity to partner with retailers to reach new audiences. It’s a great way to give shoppers reasons to interact with brands they like, especially in attractive and customized spaces.