The ever-changing store: Taking an agile, customer-centric approach to format redesign
Many retailers believe—rightly—that format redesign is often too risky, takes too long, and costs too much. There’s a better way.
The role of the store has changed. With customers increasingly shifting their spending online, it’s not enough for a brick-and-mortar store to be just a transactional venue. Instead, it now must serve as a brand-building environment in which customers can have special, in-person experiences that can’t be replicated in digital channels. To keep their stores relevant, retailers need to make the most of physical stores’ built-in sensory advantages over e-commerce—they need to tout the experience of touching, smelling, and trying on products, and they must ensure that the in-store experience is enjoyable and convenient. Otherwise, customers simply won’t bother making the trip.
In most cases, creating a distinctively compelling customer experience will require retailers to redesign their store formats. And there’s no time to lose; competitors are moving fast. Even companies that started as pure-play online retailers—such as Amazon, eyeglasses retailer Warby Parker, sneaker brand Allbirds, and luggage company Away—are opening brick-and-mortar stores so that they, too, can offer sensory experiences. So, for traditional retailers, the pressure is on; the time to invest in format redesign is now.
Yet many retailers still only refresh their store formats in three- to five-year cycles. That’s an eternity in today’s world, where consumer demands and behavior are changing rapidly. Furthermore, traditional format redesign is a costly, multiyear effort that involves overhauling several departments or even the entire store. It carries significant risk, because retailers have no guarantee that the redesign, once it’s complete, will generate the desired results. It could turn out to be a tremendous waste of time and money. McKinsey – Read more…