The Tech in the Brick-and-Mortar Experiment

Simon Eskow Retail Articles Leave a Comment

Big retailers continue on their brick-and-mortar experiment to win over customers. From one perspective, the big disruption to retail isn’t an Amazon. Nor is it eCommerce in general. Customer behavior now dictates retail behavior. Consequently, big retailers rationalize their physical space not to flog products but to engage. Showrooms, experiential spaces, and other retail experiments no longer chase after volumes of POS transactions. They endear their brand to their customer by catering to buying patterns. Hence, technology becomes more important in the ongoing brick-and-mortar experiment.

Showrooms Point the Way in the Brick-and-Mortar Experiment

Showrooms turn out to be the simplest, most straightforward proposition in the brick-and-mortar experiment. Because they to demonstrate a brand without selling at volume, they don’t need to carry a ton of stock. Showrooms assume the purchase and fulfillment happen elsewhere. Thus, showrooms require less real estate than traditional retail to meet their goals.

Nordstrom’s Brick-and-Mortar Experiment

The upscale retail chain, Nordstrom, will open its first Nordstrom Local in Los Angeles later this year. They brand it as a fashion “concept store”, but at heart it’s a showroom with frills. Customers can enjoy a drink, get a manicure and size-up clothes. If a customer buys at Local, Nordstrom pulls the item from another location. Consequently, Local will be the fraction of the size of a typical Nordstrom store.

Tech Makes it Possible

News stories imply that Nordstrom’s announcement prompted a drop in the company’s shares. Apparently, if that’s the case, they don’t understand customers as well as Nordstrom. Local offers the options that have become commonplace in the brick-and-mortar experiment. Customers can get same-day home delivery of purchases made before a certain time. And they can order online for in-store pickup. News doesn’t explain the technology behind it. However, Local’s eCommerce, in-store pickup, and branch routing features show that tailoring to customer behavior requires the right technology.

Brick-and-Mortar Relies on Tech to Manage Inventory

Many big US retailers plan to increase their technology investment this year to adjust to consumer behavior. Nearly 60% of 150 surveyed retail executives made it a top investment priority. Half of them point to eCommerce as the most important trend they face, while a quarter is concerned with managing their supply chains. Presumably, companies must first figure out how to manage inventory for online and in-store orders as they continue their brick-and-mortar experiment.

Whatever brick-and-mortar experiment a retailer undertakes, the goal will be perfect fulfillment across all channels. This requires technology that gives retailers complete supply chain visibility and control to complete orders no matter how their customers make a purchase.


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