The Blessing and Burden of Technology

Is in-store digital integration merely “putting lipstick on the pig?”
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Posted April 17, 2017

I recently had the opportunity to co-host a “dinner and dialogue” event sponsored by Gensler, where we invited a small group of clients in the retail industry to share insights about the challenges facing retailers today, with regard to the built environment. Digital integration was top of mind for pretty much all who attended. It quickly became apparent, while viewed by upper management and marketing executives alike as a panacea for the ills of in-store retail allure, that digital proved a much greater burden for the in-store design teams.

On the heels of this evening, I was sitting in a client meeting discussing the design and planning of current and upcoming projects when our client declared that they were no longer going to support digital in store. I quickly looked up at him as if seeing the words fall from his lips would make them any different as they were repeated. The decision was made to remove digital from the planning of future stores, given the burden of cost to support from a content development and management side, as well as the not-insignificant financial impacts to construction budgets.

With these two events still weighing in my thoughts, I then read a recent interview with Farfetch’s Founder and CEO José Neves in “The Business of Fashion” about the impending debut of their “Store of the Future.” At the end of the article, I followed a link to another entitled “In-Store Tech, Sales Driver or Hype?” which explored the actual sales value of some of the recent technology integrations currently seen store environments at brands like Burberry and H&M. Both articles were intriguing, yet neither declaratively said go this way or that. No wonder retailers feel like Alice asking directions from the Cheshire Cat.

So then I started thinking, what would Marvin Traub say? If you don’t know who Marvin Traub was, please Google him. Pulling from The New York Times business section tribute to him at the time of his passing, the writer described him as ”the retailing impresario who transformed Bloomingdale’s from a stodgy Upper East Side family department store into a trendsetting international showcase of style and showmanship in the 1970s and ’80s.” I swear he was the person who, back in the ’70s, mind you, coined the phrase “retail theater.” If it wasn’t him, he certainly knew how to produce it.

Call me naïve, but I have concluded that everyone is overcomplicating this whole situation. What is required, quite simply, is a return to the basics. Yes, good old fashioned retailing – Marvin Traub style. Retail theater takes a lot of work, hard work. And you know what, it did back in the ’70s, too. I think we all have just forgotten how to do it. With the initial emergence of “brands” like Girbaud, Guess and Calvin Klein in the ‘80s, and then the near-hedonism of the go-go ’90s, retailers didn’t have to work that hard to move product in their stores. Our consumer-based economy continued to drive sales through the aughts, and it wasn’t until the Great Recession that all of sudden America woke up with a hangover from decades of indulgence and said, “It’s okay, I have enough stuff.”

Now let’s look at some facts. For the first time since the ’50s, a higher percentage of Americans now save more than they spend. But luckily, Americans remain addicted to spending, although now their spending has been tempered by value judgements. Americans, most especially young Americans (aka millennials), value the acquisition of experience over products. We all know this, no technology or data collection needed here. Now another little tidbit: 90 percent of all retail sales are still happening in store. It has been predicted that this number will only diminish to 80 percent by 2025. I thinking you may suspect by now where I’m going with this.

Ok bear with me, I’m going to detour here for a moment. I had the chance to visit Nadia Shouraboura’s technology incubator store, Hointer, in Seattle a few years ago. Now, I’m a shopper, and I enjoy the visceral embrace of a welcoming and immersive environment, which Hointer does not possess, exude or manifest in any way, shape or form.  Rather, it’s actually the anti-environment. But what it has in spades is a technology-infused inventory support system that facilitates an automated retail experience. No human sales associates needed. Hointer sprung to mind as I read the interview of Farfetch’s Neves and his description of the “Store of the Future.” He expressed the idea that the technology they are building with will allow staff to come out of the stockroom and onto the sales floor, so that they can spend their time engaging with the customer.

Re-enter technology integration. Where technology belongs is in the hands of the retail store employees, not the customers. Technology should not be used for entertainment, but rather, for providing information and value. More often than not, customers walk into stores knowing more about a store’s product offering and the characteristics of those products than the sales staff. That must change. Retailers must focus on educating their sales teams and empowering them with tools to understand and build relationships with their customers. Retailers must invest in managing not digital content, but a calendar of events that supports their product stories.

Speaking of Story, the much-lauded, editorial-based store just celebrated its fifth year anniversary by merchandising their store as a retrospective of their favorite product stories. I wandered in there last week for a look before it closed for a new store set up. I bought another Iris Apfel bracelet, as if I need another piece of jewelry. And the only technology in that store is the cash register – boom.

Kathleen Jordan, AIA, CID, LEED AP, is a principal in Gensler’s New York office, and a leader of its retail practice with over 24 years of experience across the United States and internationally. Jordan has led a broad range of retail design projects as both an outside consultant and as an in-house designer. She has led projects from merchandising and design development all the way through construction documentation and administration, and many of her projects have earned national and international design awards. Contact her at kathleen_jordan@gensler.com.