Brick-and-mortar awakens opportunities to build human connection
By Melissa Gonzalez, CEO of The Lionesque Group and Principal at MG2
It’s no secret that consumer spend has shifted to online in 2020 as COVID-19 has transformed the retail environment and the way shoppers can comfortably purchase goods. The value and convenience offered by online retail are key factors in capturing consumer loyalty in a time when uncertainty has influenced priorities. But while this has become today's trend thanks to the pandemic, our collective yearning to get out and explore the retail world is only getting stronger. That's because physical retail offers so many things that online can't: The ability to create meaningful in-person partnerships. A place that provides the perfect fit. And spaces to experience and discover something new about yourself and the world around you.
When Retailers Become Meaningful Partners
Regardless of the category, there are key points of interaction that feed the desire of discovery on a human level in a way that online commerce never can. It’s the complement of physical, tactile immersion that drives engagement and customer lifetime value. Dick’s Sporting Goods, for example, may have found itself in a strategically favorable position with outdoor activities being favored during COVID-19. It’s their dedication to becoming the worldwide leader in golf swing analysis, however, that’s set them apart from their competition. Whether you’re a beginner or an avid golfer, Dick’s gives you the opportunity to meet with a PGA professional and have your golf swing analyzed in a live, in-store simulator. This unique, high-end experience allows shoppers to gain deeper knowledge around the best equipment fit to improve their performance, measuring individual insights such as foot pressure and stance width. Such an immersive encounter entrenches one into the brand at the deepest level: Dick’s is no longer just a retailer. They’re your golf partner.
This effort of making their customers' purchases as valuable as possible has been pivotal in differentiating Dick's Sporting Goods as a retailer. Their Q3 consolidated same-store sales in 2020 increased a record-setting 23.2%, and was on top of their 6% comp increase in the same period last year. Their brick-and-mortar stores were the key to this unprecedented growth and serve as the hub of the brand's industry leading omni-channel experience.
Source: Dick's Sporting Goods Q3 2020 earnings report
Finding the Perfect Fit
Beyond immersion there is the power of knowing where you can find that perfect fit, a challenge that is still being perfected in online retail. Enter direct-to-consumer companies like M.Gemi, Sarah Flint, and Margaux—all of which have opened stores focusing on the fit experience rather than inventory capacity. When The Lionesque Group opened M.Gemi’s first pop-up (which stayed open for two years versus the initially planned two months), customers gained confidence in shopping a brand they otherwise coveted online as they could touch and feel the product in order to find their perfect fit.
M.Gemi sold more heels, they saw the average cart size grow 50% larger than with customers that only shopped them online, and they saw those customers purchase again 1.5x weeks faster. M.Gemi took the power of fit on the road as well, bringing the M.Gemi Gelato truck to many Brookfield Properties locations where a wider audience of customers could try on shoes, taste gelato from Morano Gelato, and test drive a Fiat 124 Spider for a chance to win the convertible, all of which further built brand awareness and consumer loyalty. These are the types of experiences you can't replicate with an online transaction.
In-Person Experiences are Unparalleled
While community events have found their way into online forums, digital variations still don’t fully compensate for the impact of in-person gratification and joy. As a parent, when you take your child to CAMP for example, little compares to the emotions one experiences when hearing their child’s belly laughter brought on by Jimmy Fallon reading them a story. As a cycling enthusiast, the camaraderie of cheering on your favorite cycling team at Rapha is unmatched. At DVF’s flagship, it feels like a rite of passage to have the opportunity to meet Diane Von Furstenberg in real life and experience the wisdom that her mere presence embodies.
It’s the intangible and deeply sensorial moments that happen in a physical setting that create not just happiness, but true customer fandom. And the numbers follow suit, as we have seen with brands like CAMP who have witnessed over 40% of their transactions coming from repeat customers, and 56% of visitors making a purchase during a visit, as shared by its co-founder Ben Kaufman.
Source: U.S. Chamber of Commerce
Retailers Win With a One Channel Strategy
The ability to offer flexible fulfillment has been a significant driver of success for brands in 2020, but the brands that are truly leaning into the service of fulfillment are gaining points of loyalty with their customer base as they are investing into a “One Channel” strategy and becoming a destination of preference. Take Nordstrom Local for example, a brand that is deeply invested in the holistic experience of “buy online, pick up in-store”. It’s become a new customer touchpoint, especially to customers who know the pain points of not just ordering online, but also those of product returns.
These new small, fulfillment and service based retail locations are seen as “convenient service hubs” located in neighborhoods where Nordstrom customers live and work, providing personalized services such as order pickups, returns, alterations, and gift wrapping. The brand’s success is exemplified in early 2020 data, which shows that “customers who visit a Nordstrom Local spend 250 percent more and account for 30 percent of online order pickups in Los Angeles.”
Source: Nordstrom, “Q3 2020 Earnings Call”, 11/24/20
In-Person Shopping Opens Doors to Discovery
Retail conversions may be transactional moments, but the act of shopping is a therapeutic experience, one in which customers can escape into the story and lifestyle of a brand, and one where they often find themselves elated with each point of unexpected discovery. Enter: retail therapy/play. Take, for example, the luxury brand Tiffany & Co. and their pursuit to foster relationships with a wider demographic. Last year they launched what they dubbed “Style Studios,” a place where customers could escape into the Covent Garden, a space of interactive play. Everyday objects such as plant pots, pens, and straws were displayed in the signature “Tiffany blue” surrounding a personalization bar offering self-styling and a Tiffany fragrance vending machine. These are moments of escape into the soul of a brand, something that could only truly transpire during an in-person retail experience.
To sum it up - physical retail builds connection in a way online can't. This human connection is ultimately the key to the success of brick-and-mortar and remains the reason why in-person shopping is here to stay. It’s not about thinking of stores in isolation, but understanding the intangible ways in which brick-and-mortar drives deeper engagement and the role it plays in your overall consumer strategy. It’s a key touch point to deliver consumer-centric moments, those that are highly sensorial and become deeply rooted into one’s memory. It’s in these moments that brand evangelists are born and higher customer lifetime value is unlocked. For brands and retailers that take the opportunity to connect intimately with their customers, offer unique experiences, and truly show that they understand their clientele, they will more closely meet their customer’s needs and wants, and reap the rewards of loyalty and long-term growth potential.
CEO of The Lionesque Group and Principal & Shareholder at MG2
Continually pushing the boundaries of experiential retail, Melissa Gonzalez is an award-winning innovator, seasoned visionary, and brand storyteller. She is the CEO of The Lionesque Group, an MG2 company, pioneering the integration of physical environments and cutting-edge technologies to help companies such as Purple, Nordstrom, and Burrow foster foundational consumer engagement and evolve their offerings. In 2017 she led the invention of IRL, in real life, with the Brookfield Properties team as an early mover in creating turnkey retail platforms connecting real estate developers and leasing teams with some of the fastest-growing direct-to-consumer brands in the industry.
A passionate mentor and strategist, Melissa works hand-in-hand with clients to understand their greatest aspirations. She leads creative teams to deliver authentic solutions from concept to completion, helping clients achieve their ultimate vision. In 2020, her work with Burrow House was honored by Fast Company’s Innovation by Design for Retail Environments. In 2019 she was honored with ‘Women In Design’ award of the year by Contract Magazine and was recognized as one of LinkedIn and design:retail’s “Top 10 Retail Design Influencers of the Year”. When she’s not recording podcasts or dreaming-up innovative pop-up spaces, Melissa can be found seeking inspiration in unexpected places, like skydiving 10,000 feet above ground.