• Laura Wrigley

Merchandising the 'Store of the Future'

Updated: Sep 4, 2019

We are the music-makers and we are the dreamers of dreams.

This might be a line of poetry by Arthur O’Shaunessy (or a line from Willy Wonka and the Chocolate Factory if you’re a child of the 1970s!), but it feels like an apt statement for retail today – particularly in the store environment.


There’s been a lot of talk about the ‘Store of the Future’ and its all-encompassing functions, but there have been fewer discussions about what this means strategically for retail brands. Channel integration has not just changed customer expectations; it’s changed deliverables, and this is highly evident when it comes to merchandising.


Daring to dream


One of the store’s most poignant developments in recent years has been assuming the role of experience curator. Although it is first and foremost a place to buy items (in most cases, at least), the need to surprise and delight customers along the way has increased in importance, especially as the store must reflect the retailer’s brand and offering beyond those four walls.


This has fundamentally reshaped the way that retailers approach merchandising in the bricks-and-mortar space. Analyst McKinsey has described merchants as making the transition “from quarterbacks to category owners”, as structured playbooks, tight category focuses and specific outcomes have been replaced by agile processes, overall performance and holistic experiences.


In many stores, the aisles are now augmented with technology that enables shoppers to understand product ranges in greater depth before committing to purchases. It’s something One iota is helping to enhance with the launch of our RFID-enabled experience table app, which gives customers the power to digitally explore content related to in-store products.

But more widely embraced at this point in time is the capacity for consumers to explore products that aren’t available for them to physically touch at the shelf-edge. Brands like HUGO BOSS are implementing interactive technology that creates endless aisle availability, extending ranges and out-of-stock items to capitalise on every sales opportunity.


Not only is this good for their bottom line, it increases customer engagement and satisfaction as well – everyone gets the outcome they desire, and nobody goes away empty-handed.

Backing up big promises


But while shelf-edge augmentation is enabling customers to explore their wants and dreams, increased channel integration poses an important question for retailers: how to manage stock effectively in this omni-channel environment.


In the 'Store of the Future', merchandising is not just visual; customers have a growing expectation that they can choose and buy in any channel. And this can only be executed smoothly if retailers have a transparent, accurate understanding of stock availability, and the operational agility to manage the increasingly complex web of ways in which shoppers can complete their purchase.


Accenture’s retail operating model leader, Courtney Spitz, summed the challenge up perfectly in a 2018 report, where she noted that success “requires time, supporting capabilities and collaborating with ecosystem partners who can help retailers compete in an integrated marketplace where making a purchase is just a tap, or even a look, away.”


In short, there is absolutely no point in spending money on impressive visual merchandising technology, if you can’t get the product to the customer once they’ve decided they want to purchase it – or if that particular transaction is to the detriment of sales in other locations and channels.


Merchandising as a ‘phygital’ experience


As the 'Store of the Future' takes shape, merchandising will further transform into a simultaneously physical and digital experience, and it’s up to retailers to find the right technology platform that will enable them to deliver on their promises to the customer.


Embracing this opportunity sooner rather than later will breathe new life into established market players, but also giving newer or younger, digital-savvy retailers a quicker rise to fame. A good example of this is womenswear label Madewell, which is emerging from the shadows of its sister brand J Crew by investing in digital merchandising functionality. “We’re looking for ways to improve the experience in stores to make it feel like one experience for the customer because she is our best customer...” Madewell CEO, Libby Wadle, recently told Marie Claire. “...the one that shops in our stores and on our website.”


Madewell’s reference to ‘one experience’ hits the nail on the head. Stock availability needs to work seamlessly in all channels – and it’s only through store investment and innovation that retailers will be able to truly deliver omni-channel merchandising capabilities.

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