Traditional retailers' physical stores--something online-only retailers lack--need to be an asset, not a liability, by providing customers entertaining, exciting, emotionally engaging experiences: Nielsen

Cindy Allen

NEW YORK , January 10, 2014 (press release) –

Consumers lead busy lives and their time is becoming more limited and fragmented every day. So when it comes to shopping, they may not always be 100 percent focused or fully engaged in the task at hand. So in order to keep up with them, retailers are increasingly finding that they need to innovate in ways that make it easier and more convenient for their customers to get what they need and not miss a beat in the process.

Innovation can take many forms. While breakthroughs like cellular networking and seedless watermelons are tangible examples of innovation, there’s no denying the impact that advancements like multi-platform store formats and online shopping have had on the retail landscape. In fact, according ot the Continuous Innovation: The Key To Retail Success report, convenience may just be the most creative and energetic example of retail innovation.
Standing Out With Channel and Format

Channel and format are the stand-out examples of innovation in the retail space. U.K.-based Tesco PLC is one major retailer that has adapted its physical store offerings to meet customer demand for convenience. Notably, Tesco operates four different formats to ensure that its customers have quick and easy access to its offerings regardless of whether they live in dense metro areas or the outskirts of town. Even Walmart, whose superstore concept made it the largest retailer in the world, is testing two smaller formats—even though it continues to expand its traditional supermarket format in the U.S.

As a format in-and-of-itself, brick-and-mortar continues to maintain a strong footing with consumers, particularly as retailers diversify their available store configurations for specific customer needs, online is changing how shoppers interact with stores. This in turn has prompted stores to change in response. For example, many companies with notable physical footprints have capitalized on the influence that online retailing offers by touting “click & collect” options, whereby customers shop online and pick up their items at a nearby store. This innovation is quite powerful, as it improves convenience dramatically for shoppers who find it inconvenient to wait at home during broad delivery windows.

European retailers such as Carrefour and Auchan are particularly advanced in the click & collect arena. France-based Auchan, for example, offers a drive-through service with spacious collection points, allowing shoppers to collect pre-ordered baskets without leaving their cars. Visible from the road, the service is ultra-convenient and serves as a powerful advertisement. But these trends aren’t just popping up in Europe. In the U.S., drug retailer Walgreens offers shoppers a variety of in-store and curbside pick-up options.
Virtual Shops Deliver Real Convenience

Some innovations forge entirely new roads. The virtual supermarket, designed by Tesco and launched in South Korean subway stations in 2011, is one such example.

For Koreans, shopping is a much-dreaded task, so Tesco decided to offer them the convenience of browsing through displays of the same merchandise offered in its stores. To make purchases, consumers simply scan QR (quick response) codes of the items they wish to purchase and then click the send button on a smartphone app. Tesco then delivers the merchandise to the consumers shortly after they get home. The results speak for themselves: online sales increased by 130 percent and site registrations grew by 76 percent in just a few months.

By taking a dramatically unique step outside the box, Tesco, which later teamed up with Samsung to later open a more robust version of the virtual store concept in Seoul, debuted an experience that has since been mimicked by several other retail companies. Eighteen months later, Peapod (U.S.), Cold-Storage (Singapore), Woolworths (Australia) and Yihoudian (China) had created virtual platforms of their own.

Are there more convenience roads to explore? Of course. Recent offerings essentially make it easier for consumers to purchase and receive. Today’s tools, however, offer companies and brands insight into when consumers will need to replenish. The ability to make these types of predictions will likely put retailers with loyalty data in an advantageous position. Notably, we’ve already seen how Amazon walks people through the process of choosing goods, quantities and a delivery schedule on a “save, set and forget” basis. So brick-and-mortar” players will need to respond to stay competitive.

In today’s digital world, the one thing traditional retailers have that online operators don’t—physical stores—needs to be an asset rather than a liability. And those assets need to include entertaining, exciting, and emotionally engaging experiences.

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