Introduction:
The proximity of retail outlets is a sales area that is frequented daily by shoppers who live in the area where it is located. It generally offers products or services intended for daily and regular consumption.
In France, according to INSEE, local retail outlets accounted for around 70% of all retail outlets in 2018. It is found in both urban and rural areas.
Today, it is the customer experience that makes the difference from the competition. A seamless, stress-free and convenient experience that keeps consumers coming back to the same brand or business. These characteristics will be the pillars of the entire retail industry. To put the customer 100% in the pocket, new strategies of conquest are being developed; companies now have simple analytical tools to deploy to better know their customers and their habits to integrate them into their local business.
A personalized and seamless shopping experience:
In recent years, retailers have adapted like never before in terms of technology, same-day delivery, in-store and out-of-store pick-up, BOPIS, and returns facilities. These facilities lead to a higher rate of customer retention. Many new customers acquired during the pandemic were retained and became regular customers a few years later.
Retailers have also moved to real-time inventory so that customers can see online whether a particular product is in stock, and locate it in the shop. The Gordon Brothers consultancy is thus prioritizing omnichannel, stock transparency, and customer convenience to maximize physical and digital resources.
As we can see, retailers need to be able to reach their customers at every touch point of their customer journey, and at every interaction they need to deliver value.
The goal is to achieve a seamless and personalized shopping experience. There is also a need to link all the channels that users interact on, such as email and social media.
Technological advances in retail:
Technological advances have increased the convenience of shopping through extended home delivery, virtual shopping, live streaming, and appointment-based shopping.
By 2020, contactless card payments have increased by 70%, and by mid-2020, 67% of retailers accept one or more forms of contactless payment. Over the last two years, the most popular credit cards have grown considerably (+30%) at the expense of cash use, which has been reduced by 20%.
In terms of flexibility, almost 90% of consumers say they spend more when brands offer them payment facilities, as this speeds up their purchasing decision.
Clienteling, the personalized experience that strengthens the relationship between the brand and the customer:
Clienteling is the set of personalised actions carried out in the physical shop to offer a personalised and convenient shopping experience. This marketing strategy establishes a close relationship between the customer and the in-store assistants. Through the collection of customers’ purchase data, their preferred products.
Despite living in a fast-paced and highly impersonal society, consumers miss the personal service they can find in local shops where they know each other personally.
Customer loyalty is fed by a cloud-based database that is accessible to any retailer. Therefore, no matter who serves the customer, their experience will be personalised and convenient.
This system has always been associated with the distribution of luxury goods such as Gucci, Louis Vuitton, etc. However, the fast-food giant ZARA has already equipped its sales staff with devices that know our history as users if we are registered and make it easier for us to find clothes in the physical shop, place an online order in the shop and receive it at home, etc.
Examples of convenience stores:
Convenience has always been the starting point for the shopping experience. It is still a key element for retailers today. However, what do we mean by convenience today?
Thanks to the collection and analysis of user data, retailers now know which products generate the most interest and sales. They also know where and when they prefer to buy them, and how often.
For this reason, the giant Amazon offers its users three types of physical shops to suit its customers:
- Amazon 4 Star has an extensive catalog of products with a rating of four stars or more. The location of the shop affects the catalog available, which is tailored to the needs and tastes of the surrounding communities.
- Amazon Books is Amazon’s bookstore. It offers a wide variety of products, both print and digital.
- Amazon Go is the grocery shop where you don’t need to check out because the shop’s technology automatically uploads everything you put in your cart to your Amazon account.
It is about rethinking the shopping experience and adapting it to the audience, the place, and the new shopping habits.
Physical retail space for key demographic groups:
Another example is the US DIY and home improvement retailer Big Bix Lowe’s. They have created a program called PRO with physical space in their shops for professionals who buy regularly. They offer benefits such as special packaging that is easy to transport, dedicated parking, an online request for special products to be picked up in this space, etc. In addition, the dedicated shop area is located at the entrance, which makes entry, and exit easier and faster.
Large retailers are experimenting with new shop typologies and user experiences with their key demographic groups. They are also doing this by using their own space or by opening smaller, more manageable and easier-to-set-up shops. In addition, they can have more shops in different locations, as the cost of opening these shops is much lower than the former maxi spaces of these retailers. Their small size allows them to adapt to the needs of each local community. If the initiative fails, it does so in a sustainable way, as the investment is controllable and quick. In this way, they also get to know the changing needs of their audience.
Big players in small, local spaces:
One sector that used to have large spaces to display its products was the automotive sector. Today, however, there are Tesla dealerships in shopping centers with only a few car models. They are looking for visibility and want to be in a busy pedestrian area. The concept is setting up showrooms where information about the cars is provided, but hardly anything is sold.
The future of retail:
The pandemics of recent years, along with the digitalization of many aspects of our lives, are changing shopping habits and the way the customer interacts with the brand. The future may be smaller shops that bring the brand closer to the customer, but with less space for consumers and larger internal spaces for delivery and click & collect. Perhaps a 24-hour collection system could provide regular sales at off-peak times. There are endless possibilities that will emerge over time.
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