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Brick-and-mortar 2.0: What's next for retail stores

February 4, 2022

Retail stores underwent dramatic changes in the last two years. Jeff Bradbury, Senior Marketing Director at Hughes Network Systems, discusses next steps in the increased digitalization of retail stores and trends that are reshaping the shopper experience.

Key takeaways:

  • Stores remain the hub of the brand experience but they must offer the same digital enablement as other channels.
  • Automation and AI are being integrated into stores at an accelerated rate.
  • Associates that are better trained and equipped with digital tools are increasingly empowered to provide a differentiated customer experience.


Judith Aquino: Welcome to the CX Pod, I’m Judith Aquino. We all know that retail customer expectations have significantly over changed the past two years. Stores either closed or became more closely connected with digital experiences and customers have become accustomed to convenient pickups and fast delivery.

So, how will retailers continue to meet or even exceed those higher expectations moving forward? I spoke with Jeff Bradbury, Senior Marketing Director at Hughes Network Systems, a satellite Internet service provider, about the digitalization of retail stores and the trends that he predicts will shape customer experiences.

So, let's start by talking about what's going on now with brick-and-mortar stores, since at the start of the pandemic, most retailers shifted their focus to e-commerce. Now that we're nearly two years in, I'm wondering is the priority still for brick-and-mortar stores to support e-commerce, or are retailers looking to incorporate digital experiences into brick-and-mortar stores.

Jeff Bradbury: You know my sense is the stores are still central to what brands are trying to do. Stores remain the hub of the brand experience, it is the one place where you should and can get the fullest expression of the brand experience that they're trying to give to their customers.

And, ideally, it would be equally digitally driven right, so the idea of you know, of a next product next best product recommendation, knowing what's in your basket, knowing your purchase history, frictionless check out, knowing your locations for where you want to have things fulfilled to multiple fulfillment options, multiple payment options right.

All of those things should happen in the store and have the same digital enablement you would have in any other channel right, so I think the store remains the hub of where you can get that greatest brand experience and have the most intimate and immersive relationship with a customer. So I think the stores are not going away.

What's interesting is the stores are developing this sort of bifurcated capability set.

One capability set is where the store becomes a core element of transactional activity, including fulfillment so it's the store as an extension of that broader e-commerce or digital activity that we've come to know, over the last couple of years so well.

I want you to think about things like store-based fulfillment initiatives, curbside pickup, buy online pick up in store, accelerated exchange and customer service issues, whatever.

That is becoming a lot of what the customer expectation is being based on and that store experience with the transaction needs to be as seamless and as fulfilling as the customer choosing to do that transaction through some other channel, primarily some other e-commerce digital channel.

But that's all a part of the story, and while a lot of work has been done there over the last two years, to improve the store’s ability to match and to integrate into that transactional digital experience, the other part of that store experience that we're seeing really stand out is that is that immersive brand promise fulfillment.

Where somebody can get into the store and have that deeper connection with the brand. Have somebody help them, have somebody make recommendations to move them through a discovery and selection process in a more holistic way that brings that customer into a broader buying arrangement.

Those transactional things I need. One thing I buy, one thing I leave, I need three or four things, I buy those things I leave. That second set is really about somebody walking into the store and wanting to find something special or something unique right maybe it's a Christmas event and they want to buy gifts for the family.

And so they're buying many things, and in some cases those things may be related to each other, so having somebody in the store, the store associate makes a big difference. You know, having the store know that about me and be able to make suggestions or recommendations, based on things I've bought before.

So that's why I say bifurcated. The store really does have to be able to do both very well, it has to do all the things digital does and deliver that seamless digital experience that allows me to do efficient and seamless transactions and I need to do that highly immersive high touch deeply intimate relationship with the customer to give them that greatest brand experience.

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JA: Right and given that we saw so many store closures in 2020 and early 2021, does this make it easier for the remaining stores to be able to deliver that type of experience that you just described?

JB: So first good question I would need to really put my head down and do some do some research on this, but I did see a stat the other day that said, store count for 2021 broke a million stores and it will kind of come back on par in terms of total stores out there.

Now I don't recall off the top of my head what that stat counted or didn't count so I don't want to say that that's a particular answer I want to stake this response to, but I'm saying it's interesting that within some counts anyway, stores seem to have made something of a comeback.

But to your point, I do think there is something happening at the store level that is allowing particular brands to find a sweet spot for themselves and I don't know if it's purely about competition and well, a bunch of stores close as they kind of have to go to the remaining stores I think it's there may be some of that, but I think there's also an element of the stores that have gotten it right have gotten digital fairly right and they've made that transition to doing digital in the store well.

And because digital's going well in the store, you're finding a place where people have a reason to go to the store and I think we all know, when people go to the store average tickets go up. Very average sales go up because they're in a place where they can do more, and they can get more engagement and they can find a reason to buy that next thing, so I think stores are doing well.

The remaining stores are doing well, because they're finding a way both to transact better and they're also finding a way for that in store experience to be more valuable and more desirable right.

JA: And I'd like to ask you also about in terms of the specific technologies that stores are investing in, what are your predictions for how will retailers integrate more AI, machine learning, and automation?

JB: So I was just thinking about this earlier, so I had like three thoughts in my head at the same time and usually I can handle two. I added a third one in and suddenly just get bogged down um, but I want to see a big difference, let me get to the AI answer in a moment, because right AI means so much to so many different places and it applies everywhere so that's a really sort of special case I'll come back and talk about AI in a moment.

I have seen as you know, a bunch of things here at NRF this year that sort of I don't want to say surprised me, but the intensity and the volume that I've seen has been sort of a predictor of where things are going. So, for instance you know, last time we did NRF, two years ago, I think I saw one robot demonstration and maybe one or two other companies that were there, but you know they didn't have a live demo.

I must have counted at least 10 on the floor live robot demonstrations this year. Wow so clearly robotics is an area that's getting a lot of attention and a lot of focus. I'm not talking about robots that interact with people. That's a bit in the future, but I am talking about this integration of micro fulfillment from the stores and making store selection transaction and fulfillment more efficient, which ultimately leads to things that you can do for your customers that maybe you can't do now.

So I do think these robot demonstrations specifically around micro fulfillment are creating very, very small high density fulfillment centers in a store completely automated in two cases where you could do a lot of micro fulfillment in a fairly small footprint in a store.

So, so I think that was sort of interesting and I think that's sort of a place where I expect to see more things happen in that area. More things where you're going to find a way where some of these automation technologies, especially in the sense of fulfillment and tracking and being able to get product into customers’ hands more conveniently and more quickly, will come to the forefront.

I think that automation piece; you never have you know perfect inventory visibility and be able to automate your selection, picking, packaging, and filament and do that, all in the store at the point of contact and have the product, you know pleasantly packaged and ready for that customer at the moment they choose to leave the store.

Or ship some things and have other things given to the customer or hold all the things and whatever put them in the car when the customer drives around for like curbside or whatever I think that's coming to the forefront.

And then the third thing I thought was really interesting was associate enablement devices and again, this is an area I think is had a large Renaissance over the last year, is this idea that the associate on the floor is now becoming a higher value player.

Asset in the relationship, exactly, higher value asset and so we're doing more, we're seeing more companies where businesses put more emphasis on how you get that associate to operate at that next level of value right whether that's a tool, where they do that digital interaction.

And instead of the screen asking the person what they need, you have an associate doing that interaction and that person is you know working through their handheld device to bring all of that content.

Next, you know the next product recommendation and background, what's in their cart and what their buying history is what the preferences are—all being done in a way that supported by the associate which I think is fantastic.

So I think those three things about you know with regards to the interaction and how it's working to drive that customer experience and fulfill the customer’s expectations are all working together to kind of make that a sort of interesting area I'm keeping an eye on.

In terms of what's happening in retail in terms of how you deliver that customer experience, I mentioned, I held AI off to the side for just a second AI it's happening everywhere and seeing AI and we're seeing AI and merchandising management we're seeing AI and facial recognition.

I've mentioned the screen being able to sense somebody’s mood whether they're looking at the screen and you know whether they're excited, quizzical, or whatever. Right, so you have AI and this conversational thing when you ask the screen something or you ask a key or something and it understands your voice, and you know responds to you in a natural language sort of way. So AI is everywhere and it could do a million things just to get whatever you can imagine.

That being said, I think what's interesting is AI has really hit its stride in the last you know, two, three years in the retail environment. I think it's just a combination of the maturing of the industry, the maturing of the technology, the maturing of the expert base to apply AI right and seeing lots of businesses, lots of brands have done this right in the last three or four years.

We took what was a sort of a data science team that was like you know, a handful of people that did kind of weird mathematical analytics off to the side and those teams had exploded and you're seeing data scientists aligned to cross functional teams all over the place. Or their line of marketing teams use AI to do better marketing and targeting and conversion, they're aligned to sales teams to do better store management and graphic design and customer engagement and customer funneling and all the things you do there.

AI is in the warehouse, right, where do you put your inventory, how do you maintain it, how do you store your robotics, go get it pick and pack and ship it and it's everywhere, and so I guess what I would say about AI is it's kind of the secret sauce that is being sprinkled through everything but in relative terms. It's a force multiplier.

JA: Well Jeff, thank you so much for all these insights this has been incredibly helpful.