Power of the Store Location: How Pop-Ups and Grocery Are Changing the Retail Landscape
Shopping has become so easy these days even a parrot can make a grocery list. Rocco, the African grey parrot, did so with the help of Alexa. Whether the list was made by you or your pet, the ease of shopping has reached new heights. Over the last few years, we’ve seen large retailers innovate for the overall shopping experience, making shopping more enjoyable and seamless for consumers. However, grocery seem to be the last sector within retail to update its shopping experience.
Additionally, the rise in pop-up shops for brands has proven to be both successful and exciting. Nordstrom announced last winter that it would bring men’s skiwear pop-up shops to New York City and Seattle. Spirit Halloween is taking over the costume industry by storm. It seems like pop-ups are here to stay, leaving brick-and-mortar stores with another competitor.
The Rise of Grocery Store Innovation
Grocery has been one of the last industries to tackle omnichannel. For years, grocery retailers have relied on location and convenience to maintain their customer base. However, the expansion of offerings and selection at services like Amazon Fresh and Peapod has caused other grocers to step up their game.
According to a study by eMarketer, one in five adults will use an app to purchase groceries in 2019. Grocery retailers are quickly blurring the line between in-store and online with buy online, pick up in-store (BOPIS); apps; and delivery services. Grocers will also focus on assisting customers with artificial intelligence. Amazon.com's Alexa and Google Home are our new grocery list, social media serves as a recipe book, and smartphones are how we clip coupons. The Amazons of the world thought that brick-and-mortar shoppers would jump to online only, but the human aspect of touch, vision, smell and experience enhances many shoppers' experiences and keeps them coming to stores to make purchase decisions. That’s being enhanced with both mobile and online interactivity.
Grocery stores are merging with quick-serve restaurants, banks, pharmacies and more to compete with the convenience that Amazon and Walmart always offered. For example, Whole Foods is home to various artisan restaurants and ready-made meals, while Harris Teeter boasts bars inside its stores.
Grocery shopping is set to become an interactive journey. We will see seamless customer experiences across online and offline.
The Store Isn’t Dead, It’s Evolving
Last year, we saw the demise of Toys"R"Us and the rise of many digitally native vertical brands (DNVBs). However, in the midst of an apparent “retail apocalypse,” Ross Stores recently announced plans to open 100 stores. DNVBs made appearances in brick-and-mortar in 2018, like Harry’s in Target and ColourPop in Ulta. Amazon even launched a catalog ahead of the holidays, effectively utilizing the shift of the in-store resurgence into its online platform.
A resurgence of retail shopping is coming, and with an added focus on unified commerce. Retailers are creating new ways to get people excited to shop in-store again. Target, Whole Foods, and Walmart weave the convenience of mobile shopping with fast delivery services, and DNVBs now offer BOPIS. Recently, we’ve seen new concepts from retailers, including Target, which is investing in the store experience, and Nordstrom, with its service-focused concept with no inventory called Nordstrom Local. The Nordstrom Local stores bring forth the convenient services of online purchasing, in-store pickup, alterations, and manicure appointments. Brick-and-mortar is here to stay. In fact, there will be even more new ways to shop in 2019.
Boston Retail Partners reports that by 2020, 81 percent of all retailers will deploy unified commerce platforms to include supporting commerce across the enterprise’s stores, mobile users, and the web. Therefore, throughout 2019, we should expect to see investments from retailers to meet that timeline.
With retail giants implementing unified commerce already, how can one stand out? It’s no secret that shoppers have an endless amount of options, so retailers must invest in creating a customer experience that's positive and seamless. Continued improvements to BOPIS, pricing, in-store pickup, convenience and communication are keys to success this year.
It’s clear that online and in-store should not be used alone, but together within a multichannel platform. Furthermore, we should expect to see even bigger strides toward more.
Seasonal Pop-Ups Are Changing Holiday Shopping
They say when one door closes, another Spirit Halloween opens. Brands are using pop-up shops to re-evaluate potential investments in brick-and-mortar. What once seemed like a gimmick is now a smart way to maximize profit and minimize overhead costs.
Spirit Halloween, a specialty costume store that only operates between August through early November, opened more than 1,300 stores this past season. The rest of the year, the nation’s No. 1 Halloween store is nowhere to be found. Surprisingly, this business model has worked for Spirit Halloween for 35 years.
While Spirit Halloween and other seasonal pop-ups have been able to thrive during the hit on brick-and-mortar, what we will see more of is partnerships with online brands and enterprise retailers.
Macy’s announced that it will dedicate store space for brands to use on a month-to-month basis, according to CNBC. "The Market @ Macy’s" will provide a marketplace environment within existing store locations. Since it gives customers the ever-changing feeling of discovery and curiosity, these partnerships, either short or long term will be popping up everywhere.
Macy’s isn’t alone in the concept, however. Saks has launched "the Wellery" in limited stores. The upscale department store chain is dedicating a section of its stores to wellness classes and services for their customers to enjoy. Kohl’s has expressed interest in partnering with convenience and grocery stores to add to its real estate portfolio. Brands testing pop-ups have seen success, so it’s no surprise that retailers of all sizes are trying them on for size.
Retail brands have realized the power that remains in physical store locations, even though they need to be adapted for changing consumer behaviors. We will see more pop-ups appear, changed formats, and adjusted spaces integrated into many different retail categories. Pop-ups are no longer just a holiday fad.
The continued innovations in retail will bring forth more pop-ups on every corner and exciting grocery lists. Both will arrive with different executions practices, but they have every opportunity to achieve success.
Andy Ballard is CEO of Wiser Solutions, Inc. Wiser’s SaaS technology integrates the workflow of multichannel brands and retailers to provide actionable insights with unmatched speed, scale and accuracy.