Banking was the first sector to radically change the designs of physical locations to adapt to a landscape where digital tech — electronic transactions, ATMs and other online services — make the branch quasi-obsolete.
It’s a shift we’re seeing in other areas – pop-up stores and other temporary spaces like the 2D stores popping up all over the world after Tesco’s Subway Store last year proved that the idea, as well as being a brilliant retail strategy, can also generate significant buzz.
A new type of brick-and-mortar apparel retail experience is coming … slowly. Like banking, it is a reaction to the cannibalization done by internet technologies. What is interesting is that brick-and-mortar is, at this moment, doing this by emulating the internet paradigm.
The first example is storytelling. In the social media era, storytelling has become a paradigm: telling your brand’s story, the customer’s story, the story of the design and fabrication process.
And now there’s a store designed around storytelling. PSFK recently profiled STORY, “a retail space that has the point of view of a magazine, changes like a gallery and sells things like a store.” I wrote about it before, when it was called A Startup Store. It’s basically taking the gallery idea – constantly shifting, curated themes – and draping itself in a self-conscious web 2 vocabulary. The concept is interesting, and it will be fun to watch if the concept catches on. At the same time, hopefully the time when everyone is trying to talk like a social-media guru will soon end.
The second trend is data. There have been a handful of apps trickling out that put customers’ purchase history into the hands of store associates — this really accelerated with the first-gen iPad. In theory, this makes any chain more like a neighborhood store, with associates knowing your preferences. While this has mainly been the space for app companies, large retailers are beginning to get in the game.
Neiman Marcus’ new NM Service iPhone app provides sales associates with real-time data on in-store customers. While featuring many standard mobile retail functions, it also allows customers and sales-persons a relationship more like e-commerce than the mall. “The app provides associates with easy access to informative details such as your Neiman Marcus store and NeimanMarcus.com purchase history. When you “check in” to NM Service, sales associates are notified of your arrival and are provided with a Facebook photograph so that you can be easily recognized.”
Like STORY when it was called A Startup Store (back when it was in beta, natch), NM Service is basically replicating online paradigms in the offline world.This is the first step in changing design — right now the physical is playing catch-up with the internet.
In fashion, the change will come when people stop returning clothes
As long as buying clothes online has such high return rates – up to 40% of clothes bought online are returned – this is going to keep traditional brick-and-mortar apparel retail much as it is right now.
According to the oft-quoted stat, only 7% of clothing in the US is bought online. Compare that with 61% of books purchased online, and you can see why Macy’s still has those big-old stores and Borders doesn’t. This is one of the main reasons fashion retail has been able to resist online shopping better than many other sectors.
Which explains why so much effort is spent attacking this pain point.
The big story in the last 18 months has been the plethora of companies trying to attack the fitting room experience. Indeed, so many companies launched virtual fitting rooms that I stopped writing about the space while writing about technology for PPR. There are so many companies working towards this that it’s only a matter of a few years until a viable solution is found.
Once you start dropping those return rates, fashion retail is going to have some of the same problems attracting customers to brick-and-mortar that other sectors have already experienced. The fitting room has been a blessing and a curse for the industry — it has survived where others have fallen, but at the same time, it left brands comparatively slow on the e-commerce uptake. But in the next 3-5 years, someone should have solved the return problem … and that’s when the fun really begins.
When you work in Silicon Valley, every vacant space is a victory. Virgin Megastore is gone? Great, that means the digital distribution of movies and music has won. Borders is gone? Awesome, the internet is the place to shop for books!
The flip side to this is that cities need brick-and-mortar. SF’s Union Square is the perfect example. As the city’s main retail district, it is a dynamic public space when stores are open. When the stores close, it’s a ghost town. Cities need stuff to make the humans flow around it. Stores will always play a vital role — hopefully a more interesting one, as well.
(STORY image: PSFK)