Bricks-and-mortar fights back

One of the most troubling consequences of the rise of online shopping is the decline of customer footfall in bricks-and-mortar stores.

It’s a downward spiral: As customers opt to do more of their purchasing online and find fewer reasons to go to local shopping centres or specialty retailers, they are less likely to spontaneously decide to visit the shop next door on their way home, making it harder for stores to stay in business.

This trend will slowly affect almost every retailer in the market. According to data from ShopperTrak, a global retail index and barometer of consumer footfall trends, the number of in-store shoppers in Australia during December 2017 was 1.7 per cent lower than the year before, while January 2018 figures were down 10.7 per cent on the year prior.

As retailers such as Amazon enter Australia, shopping centres and retailers will need to be extra creative to draw customers into stores, according to a Monash University report “How Shopping Centres are Changing to Fight Online Shopping”.

The report suggests that the decrease in foot traffic is reflected in the retail industry’s profit margins, which have consistently declined since 2008-09, while profit margins for online retailers are roughly double that of bricks-and-mortar stores.

“All of this is causing tensions between retailers and shopping centres as customers increasingly shop online,” the report states. However, some retailers are defying the trend and coming up with creative ways to increase footfall. How? It just takes a little bit of theatre.

Fun and games draw a crowd

Giftware retailer Opus Design is no stranger to the theatre present in modern retail.

“Yes, we’re selling product, but a lot of people come to a retail store for pure entertainment purposes,” Opus Design chief executive Chris Tourgelis tells IRW.

“They want to be stimulated, they want to see what’s new, so we have to remember that that is also our obligation – it’s not just products on shelves.”

Opus creates opportunities like this through in-store activations, where customers can enter one of the retailer’s two Sydney stores and have a unique retail experience.

“[We had a] collaboration with a Swedish sock brand called Happy Socks… They came in and brought in [an] embossing machine and] could imprint your initials onto the socks for free,” Tourgelis explains.

While Opus still charged customers full price for the socks, the embossing process was free-of-charge and created a lot of buzz in the store, with customers lining up and taking an active interest in how the process worked.

“The more people [gathered] around, the more people were entering the store,” Tourgelis says, noting that on that day the team sold approximately 150 pairs of socks, or nearly $2500 worth, in the space of a few hours – on top of a regular day’s trade.

Tourgelis acknowledges a lot of retailers create buzz through discounting, but says this method does not create loyalty, since most customers will quickly switch to a competitor when they hold a sale, if all they are thinking about is price.

“By creating an experience and by creating a particular feeling and vibe it actually adds to your brand, and I think it creates loyalty over time,” Tourgelis says.

Mirror, mirror on the wall

Swimwear retailer Seafolly is attempting to draw customers to stores by addressing a particular pain point – the difficulty of shopping for bathing suits in a public place – through its “magic mirror” technology.

Launched earlier this week in the retailer’s Westfield Bondi Junction store, the technology creates an interactive shopping experience in the change rooms, offering additional product recommendations based on what the customer has brought into the room, as well as the ability to request different items or sizes for staff to retrieve for you through the mirror itself.

The technology pairs with RFID tags embedded into each piece of stock in the store, which are monitored by an overarching stock management system, allowing the technology to know where each item is at all times.

While not necessarily driving more foot traffic into the store, the technology has helped capitalise on each visit, increasing items per-conversion since its initial introduction into the store around 12 weeks ago, according to a Seafolly store associate.

“Seafolly is super excited to be first in this space,” Seafolly director of IT Nathan Alexander told guests at the launch event. According to Alexander, the technology creates more customer facing opportunities and turns the store into an experience, giving the sales team an opportunity to become more of a concierge service.

“The technology is [meant] to work with our sales team… [and] is really about augmenting that experience and creating a great experience for our customers,” Alexander says.

Try before you buy

Camera retailer Canon provides in-store experiences to extend the relationship with customers beyond the point of purchase. A specialty retailer may have trouble bringing in a substantial number of new customers, given its relatively niche offering. Canon circumvents this issue by offering photography classes, hands-on, with new cameras and lenses and general training which the firsttime buyer would find attractive.

“The first thing is introductory: getting to know your camera,” Canon’s director of Australia’s consumer imaging division, Jason McLean, says.

McLean explains that once a customer buys their first camera, the Canon Collective team can sit with them for an hour, or a couple of hours, and explain the camera and how to get what the customer wants out of it.

“That’s a really individual, hands-on [experience],” McLean says. “Once that’s done, they get invited to events at the store. There might be a macro-photography event, or it could be software management, or anything like that for people who have got their camera, know what they’re doing and are getting into it.”

This approach tells the customer that, unlike at other retailers, the service doesn’t stop when you purchase a product from Canon, and enables customers to try out various accessories without needing to buy them first.

“[We] might go and do a shoot at a local zoo, where you’re taking a telephoto lens… People get to try them without any risk of having
to buy it, and [as a result] we get a lot of sales,” McLean says.

“It sort of solidifies in their mind, ‘I’m going to invest and make the commitment, and buy this lens now that I know I can get use out
of it’.”

Ultimately, Canon has learned that in order for customers to get the most of these experiences, they need to feel comfortable enough to ask questions. As a result, the retailer tries to keep introductory and training courses to around six customers for every staff member, ensuring everyone gets the chance to speak up and learn.

“For these types of events, whether we do it at our site or with our retailers, the more that these things occur the better it is for the industry,” McLean says.

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