By Lutz Dietzold.
Bricks-and-mortar retail is dead – long live bricks-and-mortar retail! News of the sector’s death may well be premature, and I am sick of hearing that the high street is doomed and that products will soon only ever be purchased online and flown around by drones. It goes without saying that digitisation and the pandemic are changing the retail sector. Digital advertising and social media are not only influencing the purchasing habits of millennials, but also those of baby boomers. But one thing has become clear in recent months: bricks-and-mortar retail remains an integral component of any effective omnichannel strategy.
A US study, for instance, indicated that the number of visitors to a website within a catchment area increases by 37 per cent when the brand opens a new shop. This facilitates the increasingly popular “click and collect” and “click and reserve” services, where items of clothing are ordered or reserved online before being tried on in-store. If the customer doesn’t like the garment, they don’t have the hassle of returning it by post. And this is just one small positive aspect of bricks-and-mortar retail.
An interplay of strengths to create a brand symphony
The challenge for the retailers of tomorrow is to intelligently combine online and offline. After all, each potential customer touchpoint offers its own set of benefits and should therefore be optimised and harnessed in its own way. The trick here is to orchestrate a consistent, cross-channel shopping experience. I regard the retailer as a conductor; with considerable virtuosity and knowledge of their customers, they ensure that brands maintain their profile across the entire customer journey, thereby sustainably bolstering trust in the brand. The opportunities at the various touchpoints are many and varied – and demand creativity on the part of retailers.!
Transforming the point of sale into a live experience
What are the origins of this great fear that bricks-and-mortar retail is on the brink of extinction? The e-commerce boom soon gave rise to the reproach that millennials and Generation Z only ever shop online. Although studies do show that the purchasing habits of younger generations are digitally based, they still want to make use of bricks-and-mortar outlets and test products in-store. However, expectations have evolved. For example, millennials want to receive customised real-time offers on their smartphones and use faster smartphone-based payment options. I can completely understand them; after all, who enjoys standing in a long queue?
Generation Z – for whom social responsibility and environmental awareness play a key role – prefer to spend money on experiences rather than material things. “Live marketing” is a buzzword that will help companies get ahead in the future. Offline touchpoints have to offer more than just product sales, as that can be done more quickly via an online shop. If I take the time to visit a real-world shop, I want to find out more about the products and try them out. This is especially relevant when it comes to non-intuitive products. I could watch hundreds of online tests and videos without finding an answer to my specific question or experiencing how a product feels to the touch. Shopping at bricks-and-mortar outlets has to increasingly evolve into an exciting blend of consumerism, entertainment and inspiration.
Generation Z – for whom social responsibility and environmental awareness play a key role – prefer to spend money on experiences rather than material things.
With this in mind, live experiences in the form of brand presentations – that connect with all the senses and enable real-word interaction with like-minded individuals – can be perfectly combined with social media. For example, a digital wall at the Nike flagship store in Paris, which is linked to installations in New York and Shanghai, makes it possible to connect with the global sporting community. Online and offline channels can go hand in hand. The individual customer journey determines the requirements and the time frame, meaning that omnichannel strategies can be tailored to all customer types and generations. Local platforms are a suitable option for smaller retailers who cannot maintain their own social media channels. Here, we are already witnessing excellent examples of retailers who have joined forces, the aim being to chart a course for the future together.
The marketplace of tomorrow
Marketplaces have been hugely important since ancient times, but a lot has changed since then. Whilst markets were, until recently, mostly frequented by tourists in search of local colour, markets around the world are now once again popular with the locals. More and more people are experiencing the need to buy regional goods. This is not only because they want to support local producers, but is also attributable to sustainability reasons and the fact that trust in local produce has grown following a series of scandals in the food industry.
In my opinion, however, the most exciting development are the efforts of long-established brands to develop multi-brand online/offline marketplaces. Why admit defeat to Amazon and Co when you are much more familiar with your own sector and country – and can offer far more bespoke services? This networking of brands is a win–win situation for all concerned, meaning for producers, retailers and, last but not least, end consumers. ROSE Bikes, a bicycle retailer from Bocholt, is showing how it’s done: established in 1907, the company is now being led into the new millennium by the founder’s great-granddaughter and her husband. ROSE is seeking to become a marketplace for all bike-related products and services. Eighty per cent of the firm’s revenue is already generated online – not just with its own brand, but also via other providers, who can sell their products on the platform in exchange for commission. Digital and bricks-and-mortar products/services meld together, revenue is increasing and there are already plans for expansion.
Whereas it used to be every brand for itself, coupled with fear of losing customers to the competition, today doors are being opened – brands are stronger together and can build distribution networks and marketplaces. With all this networking – online, offline, across brands – brands still need to ensure that they preserve their identity. I firmly believe that this is possible. There is a need for courage, creativity and new ideas – a challenge and opportunity for retailers and brands alike.
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Lutz Dietzold, CEO German Design Council
Lutz Dietzold (*1966) is CEO of the German Design Council. He studied art history, classical archaeology and German language and literature in Frankfurt. After working as a freelancer in the area of design communication for national and international clients, he was appointed as the managing director of the Deutscher Werkbund Hessen (German Association of Craftsmen in the federal state of Hesse) as well as the managing director of Design Zentrum Hessen (Hesse Design Centre), where he was responsible for the strategic reorientation of design promotion.
Seit 2011 ist er stellvertretender Vorsitzender der Stiftung Deutsches DesiIn 2011 he was appointed deputy chairman of the Stiftung Deutsches Design Museum (German Design Museum Foundation) and member of the advisory council of the Mia-Seeger-Stiftung (Mia Seeger Foundation). Mr. Dietzold publishes articles on a regular basis and gives national and international lectures on a variety of topics relating to design. He is also a member of numerous juries as well as of the project advisory board of the German Federal Ecodesign Award of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety.