Traditional brick-and-mortar retail is having a turbulent ride in the digital age. Last year, several notable businesses felt the pinch – with brands like Sears and Toys R Us closing some or all of their doors nationwide. Many other companies are reducing their physical footprints in major metro areas.
The effect of online shopping on traditional retail is undeniable. In fact, Forrester Research estimates that digital shopping influences 53% of purchase decisions. The online experience – where information is accessible, ratings are ubiquitous and price-shopping is simple – is shaping customer expectations.
This movement isn't unique to retail. The real estate industry has also been affected by the digital wave over the past decade. The National Association of Realtors reports that half of homebuyers find the home they eventually purchase online. However, when Sotheby's International Realty commissioned research by Forrester, we found that 94% of consumers still use agents to complete their purchase.
The agent remains the center of the transaction and a trusted resource that technology can't replace, but the way customers are finding their way to that service is changing. Concurrently, many businesses are realizing that they can make more out of the spaces they have, even when the economy requires them to reduce their physical footprints.
The data points in two directions. Brick-and-mortar will continue to provide an important customer connection point for high-touch, high-service businesses. At the same time, digital shopping trends will demand that brick-and-mortar businesses integrate heightened digital and personalized experiences. The key to business success lies in both elevating the digital experience and enhancing the personal touch.
Anticipating consumers' digital needs
As businesses roll out new technologies to better connect with customers on a digital level, they shouldn't lose focus on what matters most: their customers. Innovative technologies will be useless if they don't fulfill the true needs and desires of customers. The goal should be to enhance the customer experience, not replace it.
When it comes to high-touch, high-service businesses, people still value relationships. You'll certainly find brokerages that are moving away from brick-and-mortar locations, but physical spaces still deliver significant value. Clients still want to meet the salespeople they'll be working with on one of the biggest purchase decisions of their lives.
We know that technology can still be part of that experience. Apps play an important role in establishing customer connections – especially with the emerging affluent consumer – but they can't provide that human touch. Therefore, instead of sticking to the big showroom model that can't compete with the ease of scrolling, we build our physical spaces around interactive technology that can complement face-to-face encounters and stellar service.
Avoiding trendiness doesn't mean ignoring trends. We know that many of our customers are coming to us first through digital channels, and it would be foolish to ignore their experiences. We watch these trends and stay digitally active by building intuitive platforms through which our agents can connect with our clients.
The best of both worlds
There are plenty of companies outside of real estate that are incorporating digital solutions in a way that puts people first. These trailblazers can serve as inspiration for companies looking to expand their digital offerings while supporting their physical locations.
Just look at the Nike House of Innovation, which enhances the customer experience through interactive tools. Shoppers at this flagship store can use their phones to "scan to try." By scanning a QR code, customers can reserve selected styles and sizes that will await their pickup in a designated location or changing room. If customers decide they want to buy the products, they can skip the checkout line altogether by completing the purchase from their phone.
Taking these ideas one step further, brands like Neiman Marcus leverage augmented reality to offer virtual changing rooms. The smart mirror-equipped rooms enable customers to see multiple styles or colors of an outfit – from every angle – without trying on more than one set of clothes.
In both cases, brands are combining the best of the online and physical shopping worlds to enrich the customer experience. What does your brand do well, and how can you remove customer pain points through a digital solution? Making the most of digital connection points can earn you more rewarding in-person interactions.
Finding your synergy
Businesses in real estate, retail, and beyond are finding ways to adapt and thrive by combining brick-and-mortar with digital. And while it may feel like the next digital disruption is right around the corner, your company can prepare by following these four guidelines.
1. Challenge everything so you don't get left behind.
What are your assumptions about your brand, your customers, or your business model? Whatever they are, question them.
For instance, M.M.LaFleur, a stylish clothing brand, shunned the traditional department store model for an inventory-free showroom. Customers visit with stylists, try on sample garments, and eventually order selections, which will be shipped directly to them. I'm not saying you need to create a showroom brand. But this kind of out-of-the-box thinking will open the creative floodgates for your company.
Pay close attention to the trends adopted by friends and family members. If you see that they're starting to shop at a certain store, read on a new platform or use a new piece of technology, ask yourself whether these things could be incorporated into your business in some way.
This is easy for me to remember when I observe my 19-year-old son's digital world. It's primarily visual. He and his peers rely on images, video and even emojis much more than text when they communicate. The customers of tomorrow will exchange information in ways that are totally unique to them. Businesses need to be aware of how their customers are choosing to engage with branded content in order to remain relevant and trusted.
When Google approached us about creating an AR app, we jumped in, knowing it would provide enormous value to our customers and agents. We laid the groundwork in requiring high-resolution photography from agents so they could use this tool in real-time. Virtual staging enables an agent to stand in a home and help buyers imagine how they could make that home their own.
Nothing is too sacred to challenge. In any area of your company, especially those related to your physical spaces, ask yourself: "What would happen if I approached this differently?"
2. Think critically because your customers will.
One wonderful aspect of the digital wave is that it sets you free from business traditions. Gone are the days when you had to have a brick-and-mortar presence simply because you were supposed to. (Conversely, you don't have to avoid it simply because everyone else is trending toward digital.)
Think critically about the design of your space. If you're going to have a physical location, what should the guest experience be? What kind of aesthetic and layout will facilitate that experience? What does an office provide that the digital space cannot?
In real estate, I've seen great examples of fresh, modern concepts that feel relevant to today's clients. Whether offices incorporate wine and coffee bars or other innovative aspects, these concepts serve clients' needs and are far from traditional. Apply the same fresh thinking to your own brick-and-mortar space.
3. Hire well.
Good people aren't a passing trend, and when it comes to adopting a people-centric mindset, your employees should come first. They're the ones who will be interacting most often with your customers. It's vital that you have the right people in place.
Be thorough in vetting potential hires. Take the extra time needed to find the best fits. And once you have them, let them do what you hired them to do: think creatively and continue shaping the customer experience – digital or physical. Investigate their ability to do just that during your interview process.
I like to start interviews with a simple request: "Tell me your story." It's a prompt that allows interviewees to choose how they'll respond. You can learn a lot about people from how they choose to tell their stories. Do they point only to the lines on their resume, or do they explain their motivations, failures and the interesting twists in their careers?
If you can see that they've been willing to take risks and make changes for the better, they're likely to be able to take initiative and improve these integrated customer experiences.
4. Be authentic.
Most consumers can recognize inauthenticity a mile away. They want to do business with people and brands that know who they are and stay true to their heritage and strengths. When you chase digital trends in the name of relevancy, your customers will feel it – it will come across as awkward and insincere.
Before you consider your new space or digital strategy, think about your brand identity, your customers and your audience. Build your online and physical spaces around that. If a piece of technology doesn't fit, it's better to skip it, even if it means taking a more traditional approach.
Bleak predictions for brick-and-mortar businesses are constantly cropping up. But forward-thinking brands will find ways to forge new paths forward, ones that incorporate the best of digital and physical spaces. The customer experiences of the future will benefit from a balanced blend.