Ornella Urso (Senior Research Analyst, IDC Retail Insights in Europe)

For a long time now, IT vendors and retailers have been discussing the role of physical stores as key enablers to help them improve real-time contextual customer experience. Current events are bringing stores under even more scrutiny as the pandemic changes the way customers shop.

In a recent call with reporters, Corie Barry, CEO of technology retailer Best Buy, described the store as a “powerful” asset for the next normal. “It’s not about less stores …” she said. “It’s probably about using stores differently and meeting the customer where they want to be met.”

The Store as a Hub of Services and Experiences

Today’s customers expect an interactive digital environment, so reimagining stores has become imperative for retailers. According to IDC’s 2020 Global Retail Innovation Survey, 46% of retailers have already implemented or are implementing contextualised consumer interactions in-store as part of their innovation strategy for physical stores.

To meet shoppers’ expectations, retailers need to digitally transform their store operations, fulfilment, in-store technologies (such as IoT, AR and robotics), automated and self-checkout systems, new delivery and pickup options, store associate technology enablement, and mobile commerce. Innovative trends are increasingly reshaping retail stores, with differences across retail subsegments.

Our recent IDC PeerScape: Practices to Enable Food and Grocery Retailers of the Future looks at food and grocery retailers’ key challenges and best practices. Retailers’ store operations need to be fully optimised to better respond to the challenges created by the COVID-19 pandemic.

This means investing in intelligent supply chains and collaborative ecosystems, as well as distributed order management and fulfilment. At the same time, we’re seeing greater implementation of automated self-checkout systems — self-serve commerce services that enable retailers to deliver frictionless and seamless purchasing experiences in the store, reducing waiting times or completely removing friction during checkout.

With the rapid growth in ecommerce, BOPIS and click-and-collect capabilities during the pandemic, stores are evolving into fulfilment hubs to better serve multiple delivery options and enhance online CX, while fostering collaboration with potential partners (such as Amazon Lockers, Nordstrom Local and Rent the Runway). More examples can be found in other retail subsegments, such as fashion and apparel, cosmetics and beauty:

  • Zara, for instance, introduced “Store mode” as part of its mobile app to enable customers to check inventory in store, book fitting rooms, self-checkout in store and generally improve the shopping experience in a socially distanced environment.
  • Sephora is investing in its “beauty advisors” (store associates) through training and providing them with in-store technology to help customers. “Stores are a powerful way to bring experiences to life for people,” said Mary Beth Laughton, Sephora EVP of Omni Retail, in an NRF “When they come into one of our stores, that’s when they can interact with our beauty advisors. They can get this really personal, amazing advice.”

A Glimpse Into the Future of Retail

With digital transformation accelerating, retailers need to redefine their business strategies to target their investments in the extended value chain to better meet customer and consumer requirements. They need to reconsider the strategies, programmes and use cases they are investing in, share success stories and develop new practices to enhance collaboration and innovation.

IDC’s European Retail Executive Digital Forum 2020, to be held on October 20, will look at retailers’ ability to proactively respond to the product, workforce, partner and operations needs that will shape the future of retail.

For more information, please contact Helena Chappell.