It’s been another rough year in the brick-and-mortar retail world, as retailers of all sizes search for answers to deal with Amazon’s online retail disruption and its burgeoning portfolio of physical stores.
At a three-day conference in Seattle called Future Stores, retailers from around the world are coming together to talk through many of these issues and share the hottest new trends throughout the industry. On Monday, every session was about adapting to and embracing the disruption from e-commerce.
Through a number of panels a couple of themes emerged. The retailers surviving and thriving today know their identity, execute it well and give customers an experience beyond the buying and selling of goods. These trends are occurring at every level, from small online startups expanding into brick-and-mortar all the way up to some of the biggest traditional retailers.
Take Dick’s Sporting Goods, for example. It’d be easy to just think of the company — which is expanding and opening new stores in the wake of the failure of one of its chief competitors, Sports Authority — as just another big box store. Dave Lammers, its vice president of retail technology, said Dick’s has made hay through what panelists called “value added services,” or things you can’t get when buying something on Amazon. That includes everything from custom fitting golf clubs, stringing tennis rackets, lessons in golf and archery and group activities for runners and bike riders.
Following a couple of acquisitions, Dick’s is ratcheting up some of its technology offerings. For example, the company recently launched a feature called Team Sports HQ, which lets little league-like teams set up websites and schedules, buy their equipment and sell things to fans all in one place.
This gives people “the ability to track teams and individual performance statistics from far away; if you have distant relatives that can’t make it to games, they can follow along,” Lammers said.
As Starbucks moves into a new era with CEO Kevin Johnson at the helm, it is embracing both technological changes impacting retail and creating experiences that can’t be replicated anywhere else. Starbucks is redesigning stores, giving employees tablets and adding new training to handle the increased popularity of its mobile ordering and payment services.
On the experience side of the equation is the Starbucks Reserve Roastery. There, customers can see the entire process of how the coffee gets made, as well as check out some premium drinks. The first opened in Seattle’s Capitol Hill Neighborhood in 2014 and another is on track to open in New York City in 2018, followed by a Chicago location in 2019. International locations are coming to Shanghai (later this year), Milan and Tokyo (2018).
Starbucks is also putting this experiential twist on one of its key acquisitions, Teavana. The tea company, which has two locations in the Seattle area, has been redesigning and opening new stores with changes like removing the cashier counter and giving customers more do-it-yourself opportunities.
“It’s really designed to do a couple of things: take away the barrier from the customer to the sales associate, or what we call, partner,” said Catherine McCabe, vice president of sales, operations, learning and development for Starbucks-owned Teavana. “It’s also been designed to get the get the customer and the partner to interact in a much more engaging way.”
Office supply retailer Staples has been trying to adapt to the changing retail landscape for years now. Earlier this year, Staples announced that it would close 70 of its remaining 1,600 stores this year. That comes after closing 48 stores last year, and a total of 350 closures over the last five years.
Jennifer O’Beirne, senior director of customer experience and merchandise marketing, said at the conference that Staples is far more than office supply seller, and the company is doing more to showcase that. Staples has professional resources for businesses small and large, and it is venturing into another of today’s hottest trends: co-working. O’Beirne said three Staples in the Boston area now have co-working locations in the stores, giving startups quick access to Staples’ supplies and services.
“The way we are all working today is different, and so Staples and the way we support the work that you do is also different,” O’Beirne said.
The above are all examples of companies refining their identities to compete in a changing retail landscape. Matt Marcotte, founder of consulting firm M2 Collaborative said Amazon has completely changed customer expectations in a lot of ways. It has become commonplace that people want quick turnaround shipping, as well as low prices and convenience. But that doesn’t work for all retailers.
Marcotte recalled a conversation with Francis Frei, the Harvard Business School professor recently tapped by Uber to help fix some of its culture problems. The lesson was for retailers was to stick to what they do best and not try and battle companies like Amazon on their turf.
“You can’t be good at everything,” Marcotte said. “She said there’s price, quality, speed. Pick two, you can’t have all three.”