Let’s Get Physical: Legacy Brands and D-to-C Need to Learn Their ‘PHD’ for Retail Success

This article was first published on Women in Retail.

Michelle Fenstermaker, Strategy Director at FITCH

If it were the plot of a movie, it would be a dark comedy. On one side you have physical retailers and the myriad of bankruptcies forcing stores to close nationwide, while simultaneously you have traditional online brands desperately looking to open physical manifestations of their online presence. Each one wants what the other has, with neither seemingly knowing what to do with it once they get it.

Traditional brick-and-mortar retailers have been focused on how to remove any friction in the customer experience, but what they haven’t been able to successfully do is create an experience that people want to spend time in. The bitter pill for them is physical brick-and-mortar can never be more convenient than online. That proverbial ship has sailed. What legacy retailers need to focus on is creating an experience that draws customers in and makes them want to put down their iPad, get off their couch, and come to your store.

However, part of the problem for legacy brands is their hesitancy to get away from a one-size-fits-all mentality that has clouded them operationally. They’re often not willing to explore different retail formats and expressions because they’re operationally driven — sacrificing customer-centricity for operational excellence, which isn’t necessarily what the customer wants.

Case in point is our work for those with brick-and-mortar spaces, but that operate in the service sector (think car rental companies and banks). They came to us looking to start thinking more like retailers. They wisely understood that operationally and logistically they could meet the functional needs of their customers, but their in-store experience was completely archaic and would cause them to be irrelevant in the very near future. Frequency equals relevancy. How many times have you been to a bank this year?

Conversely, online brands come to retail with a different set of challenges. Casper, Warby Parker, Rent the Runway, even Amazon.com all have conjured physical expressions of their online brand. Why? Because they realize that as human beings there’s a “tangibility” that we can’t underestimate. Of course, many have the bonus of not looking at their retail space as a revenue generator (at least not initially), but rather a brand-building exercise where the goal is generating positive impressions and customer sentiment, not necessarily profits.

Still, D-to-C isn’t immune from the same issues that traditional brick-and-mortar retailers face today. You need to give people an experience that’s worth getting in their car and driving to. Even Amazon, the retailer everyone benchmarks against, doesn’t capture the humanness of the brand that we see in its broadcast advertising shining through in its retail stores.

But fear not, there’s a typical Hollywood happy ending coming in the third act. The solution for both protagonists — traditional retailers and D-to-C brands — is that they need to get their PHD:

• Physical (Immersive, Immediate, Tactile): Consumers want to be able to go to the store and actually feel like it was time well spent and were inspired in some way. It’s hard to be inspired by an app. The retail space is your stage, so make the most of it.
• Human (Empathetic, Approachable, Kind): Simply be more empathetic to the needs of the customer. They can browse merchandise online, but in-store is where human connections are made. That’s what makes getting off the couch and coming to the store worth it.
• Digital (Infinite, Interactive, Storytelling): Facial mapping technology can recognize regular customers and alert sales associates (and provide him/her with a list of that customer’s recent purchases). Heat mapping can show you what aisles customers gravitate toward. These are just some of the technologies that stores can use to improve customer experience. The most successful retailers are using data efficiently.

By viewing stores as an activity, not just a place, retailers can exploit that sweet spot between physical and digital. By doing so, they create a road map for the future of legacy retail.