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The BoF Professional Summit: What’s a Store For?

The role of physical retail has drastically changed in the past few years. BoF’s Imran Amed and retail futurist Doug Stephens are joined by a panel of experts to talk about the evolving purpose of stores.
Imran Amed, founder & CEO of The Business of Fashion and Andrew Keith, Managing Director of Selfridges, at the BoF Professional Summit. BoF.
Imran Amed, founder & CEO of The Business of Fashion and Andrew Keith, Managing Director of Selfridges, at the BoF Professional Summit. BoF.
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The purpose of stores has shifted.

Before the pandemic, retailers would buy media to drive consumers to stores and use them as distribution centres. Now, “we really and truly are leaving the industrial model of retail,” as retail futurist Doug Stephens put it, with the customer relationship starting at a store, which has become more than just a place to sell products.

Stephens was just one of several voices that joined Wednesday’s BoF Professional Summit, “What’s a Store For?” presented by Afterpay, which examined the purpose of physical retail in today’s world.

As vaccinations are on the rise and restrictions ease, store foot traffic has been climbing across the globe, suggesting physical stores coming back with a vengeance after a hard year. Coresight Research estimated up to 25,000 stores closed in 2020, the highest since it began tracking store closures in 2012. But, physical retail won’t return the same as before.

Using a framework from a case study by BoF correspondent Cathaleen Chen, “Tapping Into the Future of Physical Retail,” the Summit examined the role of the stores through four different lenses: store as brand billboard, store as a service touchpoint, store as community hub and store as immersive entertainment system.

Consumers and brands, emerging from a paradigm-shifting pandemic that further accelerated the shift to e-commerce, will dictate the future of brick and mortar retail, as changing preferences and priorities shape what purpose stores will serve going forward.

“It’s going to be a really fascinating 12 months. I think there are as many things now that we don’t know as we do know,” said Stephens. “I don’t think that we really understand the true condition of consumers right now.”

How Can Selfridges Future-Proof the Department Store?

Selfridges, which played host to the Summit, is an example of a retailer that has evolved the way it approaches retail — an ongoing process over the past few years — investing in a mix of pop-ups and experiences to draw consumers to the store.

“We’ve really put the customer at the heart of what we’ve created, and that means we want to strengthen the relationship with the customer by creating the magic that comes alive in the physical stores,” Selfridges Managing Director Andrew Keith told Amed in the day’s opening conversation.

Keith says Selfridges is crafting its future around the idea of creating a space where people want to spend time — not just to make a purchase.

The Store as a Brand Billboard

The lines between retail and experience are being blurred, and so are those between editorial and retail. Condé Nast’s Allure magazine, for example, is opening its first physical store this month, which will test the power of its content and pre-existing relationship with readers in driving sales. Editor-in-chief Michelle Lee said the Soho storefront will act as an experimental extension of its editorial content.

“The entire in-store shopping journey is really crafted to replicate the digital and the print experience,” she said.

Creating a physical space was a new exercise for the brand, which required thinking about not just operations and assortment, but how to incorporate the publication’s content and what type of product mix and placement suited its editorial structure.

The Store as Immersive Experience

Brands are increasingly thinking about their physical properties as places to provide experiences and entertainment, through opening cafes and restaurants, or outfitting their stores with games with the intent to encourage people to spend more time inside their brand ecosystem and amongst their products.

According to Krishna Nikhil, chief merchandising and marketing officer at Ssense, brands must evaluate what sort of programming works in a retail environment “because you’re not going to do it in the same way that a gallery or a museum does it,” he said.

Web Smith, founder of retail media company 2PM, added that product doesn’t need to dominate a store. He points to direct-to-consumer startup Rowing Blazers — whose flagship (which has since shuttered) was only stocked 30 to 40 percent with actual merchandise. The rest of the store showcased mementos and things that would inspire the customer to think about how Rowing Blazers’ products fit into their lives.

“What are the associated things: the moments, the history, the accessories that you were merchandising with — the history of the industry itself?” said Smith. “What are those things that you would associate with the sale of those products?”

The Store as a Service Touchpoint

Consumers experience brands in a variety of different mediums, often at the same time: they may be introduced to the brand on social media and make a purchase on its website, or they may browse in-store then buy online, or buy online then pick up in-store. The journey to a point of sale could start anywhere, which makes it all the more important that retailers harness the power of brick-and-mortar.

“Culturally, there [are] still too many silos inside what I would consider omnichannel retailers where online doesn’t see the benefit of stores and vice versa,” said Adam Levene, founder of digital customer service platform Hero.

Levene was joined by Elyse Walker, boutique and concept store owner, and Dan Schoening, Nordstrom Inc.’s vice president of business strategy and operations to discuss strategies for servicing customers in a way that creates a seamless, individualised experience between in-person and digital.

Walker pointed out the continued importance of the store associates in creating that environment. It’s all about building trust, she said, rather than just shooting for immediate conversions.

“If you pressure your sales team to hit certain numbers and it’s not authentic and it’s not organic, you might have a good day that day, but long term you hurt the potential of your business,” said Walker.

Community as Hub

Creating a social experience can be a differentiator for consumers. But to build community, retailers need to think about who specifically frequents their locations and what their motivations are.

Edison Chen, founder of fashion label Clot, said it’s important that customers don’t feel like they’re forced to make a transaction right when they walk into the store. Clot is only after like-minded customers engage with the brand, is it “time for us to translate that into a sale or into business in a clever way,” he said.

President of retail-focused real estate development company WS Development Samantha David agreed.

“When you bring in the right people who are passionate about an event or passionate about music or passionate about yoga — they share that energy and I know it feels like a crazy thing to say, but you actually feel it,” said David.

Using Consumer Data to Drive Retail Experiences

Nick Molnar, co-founder and co-chief executive of Afterpay, said for physical retail to grow, brands must utilise data to build stores that allow for seamless, easy transactions, like contactless payments.

Molnar says Afterpay’s platform, for example, plays off young consumers’ bias toward shopping with debit cards. Retailers need to incorporate payment solutions that cater to consumer preferences — particularly for Millennial and Gen Z shoppers — to get them into stores.

“As a retailer, I would be looking for partners that can just keep providing that clarity of channel because it’s blurring and we’ve been speaking about this for years, but it’s only going to get more, you know, more particular in a post-pandemic world,” said Molnar.

The Most Important Metric in Retail

Data is unquestionably king in retail. But, how to properly use data can be tricky, especially as metrics for success have changed: it’s no longer just about sales. On top of that, as Stephens points out, just because you can measure something, doesn’t mean you should.

So what metrics should retailers go after?

Alexei Agratchev, co-founder and chief executive of in-store analytics firm RetailNext, said the type of data stores will want to capture differs, and retailers should be “constantly investing in tools and processes to listen and respond to their customers.”

Jessica Couch and Brittany Hicks, co-founders of Fayetteville Road — a consulting firm which helps retailers understand niche markets and women of colour — pointed out that brands need to evolve to understand their consumer on a more dynamic and personal level and implement their findings so that they’re thinking about the in-store experience as part of the larger supply chain, where data collected in-store can be used to create a feedback loop that constantly optimises the customer experience.

“How often is this person coming into your store? Where are they coming from? What community are they a part of? How do you reach that community?” said Couch. “What are their sentiments about your brand and experience?”

WS Development is a partner in the BoF Professional Summit.

Selfridges Read Now

Related Articles:

Tapping Into the Future of Physical Retail — Download the Case Study

The Retail Footprint of the Future

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