With the store becoming less prominent, the need for huge floor spaces will change.
This much has been obvious for a while – companies like Borders have suffered and ultimately collapsed due to their hunger for vast physical footprints.
“Many stores are downsizing their footprints and are making their stores less relevant,” Stephens said.
If you operate in the physical store business, then don’t be surprised if you find yourself downsizing any time soon. Remember, the purpose of your store will be different – so the square footage isn’t going to be as necessary.
If the purpose of the store is diminishing, then what exactly is the purpose of a retail store at all?
Stephens said the function of the physical store is to deliver experiences, rather than products. Just look at an Apple store, or some of Net-A-Porter’s physical experiments. They’re based on experiences, rather than simply shipping product.
When people come to your store, they need to be able to create or experience something, rather than simply buy.
“It’s going to be about making something, experiencing a product or simply creating something. That could be with a computer, or even in more specialised shops, like building a bicycle,” he said.
Because retail stores are changing to more of an experiential purpose, the staff also need to change. No longer do bored staff have any use in a retail store. More knowledgeable and practical staff members are the way to go.
“The days of the clerk are over,” Stephens said. “We’re moving into a world where we’ll have fully animated or automated experiences.”
And speaking of automated experiences, they’re looking more and more likely. Stores like Hointer – a jeans shop in Seattle – are making the shopping experience much more automated. Customers at Hointer find the jeans they want, and they’re delivered to the dressing room via a large mechanical system.
While in the dressing room, the store’s robotics can automatically retrieve different sizes and bring them to you.
There are still people who work at the store, but fewer than any normal store of equivalent size. And they give fashion advice – they’re not just there to make sure no one steals anything.
We’re already seeing more of that happen here in Australia – stores like Country Road are experimenting with tablets for the in-store experience, while Shoes of Prey has established booths in David Jones locations so shoppers can use tablets to design their own product.
Businesses hear about big data all the time, but they probably don’t know what it is or how to use it properly. Retailers will be able to access more data than ever before in the future, and customers will be willing to give it to them – but Stephens said they have to be willing to provide something in return.
“Retail is going to become more of an inclusive data share, so customers will say: ‘I’m willing to give you information, but give me something in return.’
“You’ll need to give a better experience, and actually tailor the experience to the person.”
You need to think big.
Smaller retailers have a difficult time getting accustomed to the internet because they assume they’re too small to actually experiment with anything worthwhile. But that assumption is wrong – smaller companies have been able to do a lot with technology.
Stephens said because the industry is now becoming bigger, you need to think big as well.
“Your competitor isn’t down the street anymore. Your competitor is a 26-year-old living in his basement eradicating what you do,” he said.
“You need to think exponentially in terms of change.”
When it comes to the future of retail, you need to think big – or go home.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
