Why Retail-Apocalypse Is Affecting You

You’re invited to AW2020, Advertising Week’s digital event, September 29-October 8 to help work through solutions to some of the advertising and marketing industry’s biggest problems. From climbing unemployment to racial inequality and an unclear future, now is the time, more than ever, to think and work together. Register to learn more.



Share this post

Retail-apocalypse is not a new headline, and with exceptions like high-demand and limited-supply pop-up shops, the majority of physical retail experiences are not worth our time. As a monetization game designer with three top-100 grossing apps, I am perplexed why brands believe the cure to their dismal sales lies in making their own app or posting pictures on social media. Spoiler alert: nobody cares about your app and your posts are bordering spam.

I believe we need to let die the misconception that our holy grail solutions to revive enthusiasm for in-store shopping involve overhauling a store with iPads to replace clothing racks or applying next level technology like artificial intelligence and smart voice technology to an overall experience. Until we perfect the integration of digital technologies into a commerce experience, we should learn from where we failed in how we approached designing the core online-to-offline consumer experience. As our day-to-day lives become increasingly digital, to create a strong online-to-offline experience, we must redesign the physical retail experience around delivering utility that mutually benefits the consumer, retailer, and brand.

A Bullet-Proof Online-to-Offline Experience Means Millions In Sales The First Hour

Legendary makeup artist Pat McGrath’s launches is one of my favorite examples of delivering utility (something that adds beneficial value to your life) in physical retail stores to consumers, retailer, and brand. McGrath started her own line of makeup in 2015 with a focus on limited time products that reflect her extraordinary runway aesthetic. Her recent release, a lipstick collection, was available only via her web store on July 19th. Like her previous launches, it sold out immediately and with no known date for re-release. The next and last launch phase makes the lipsticks available exclusively through mass beauty retailer Sephora (online and select stores) on July 29th.

Digital experiences designed with a holistic viewpoint that respects the end-to-end shopping experience from iPhone to clothing rack are the ones that perform well. This means having a point-of-view and/or lifestyle people want realized.

Though Pat McGrath does not currently have a brick and mortar store, Sephora is about as ubiquitous as Starbucks. Sephora was also perceptive enough to secure a partnership with McGrath, giving McGrath’s launches “pop-ups” inside major Sephora locations. Leading up to the release, the product hype was marketed digitally through content that constantly and consistently primed fans to be excited, entertained, and engaged for weeks. McGrath’s Instagram teased fans daily with visually engaging content that included color swatches, video tutorials, and glossy behind-the-scenes sneak-peeks.

Those like myself, who are willing to brave crowded spaces to spend upwards of $100 on eyeshadow and lipstick, do so because the utility we acquire goes beyond wanting to wear a luxurious product. We make time to go to a physical store to interact with the products, engage with makeup artists for application tips, and to potentially buy a coveted product that is not only beautiful but also limited in stock and time – what Park Avenue calls exclusivity marketing!

A Lucrative Cycle

The cycle begins by Pat McGrath establishing a digital experience that drives traffic to a local Sephora, which delivers utility through an on-site experience, which then funnels people back to McGrath’s digital channel or Sephora’s digital channel – where social proofing and organic, user-generated content reinforces a deeper buy-in to the brand’s narrative. The execution is perfect.

Digital experiences designed with a holistic viewpoint that respects the end-to-end shopping experience from iPhone to clothing rack are the ones that perform well. This means having a point-of-view and/or lifestyle people want realized. Cosmetic manufacturer Benefit’s core narrative is the “perfect brow to reveal your prettiest self.” The company has over 2,000 counters in 30 countries, and, like any modern company that sells a product, they maintain a digital presence which reminds consumers of their narrative. Benefit’s Brow Genie is a personalized digital experience that acts as a bridge to their in-store Brow Bar, where waxers are trained in “unique brow mapping.” The Brow Bar is an incentive to visit Benefit’s boutiques and counters, and, because the Brow Bar is built into their retail locations, it doubles as an opportunity to introduce people to other products. Of course, the store visit doesn’t end there; you loop back to their online channel to continue the Benefit experience – possessing the “perfect brow.” By building on their narrative, Benefit’s retail sales were expected to surpass their targeted $100 million within the first six months of launching its brow-centric sets.

Nike Knows How to Optimize Digital and Physical Experiences

Curating the right “vibe” in the digital sphere makes a brand’s aesthetic aspirational, but brick-and-mortar has the advantage of being a hub for social interaction. Nike continues to thrive because they understand that experiences that connect the physical and the digital are what triggers human connection – not flashy, stand-alone tech gimmicks that are trending today and forgotten tomorrow. In 2016, Nike opened a massive retail space in NYC that features a mini indoor basketball court and soccer enclosure, as well as a treadmill that simulates runs in various locations. The store itself is an event, merging “the place to be” with Nike products. Nike has vast resources, yet they chose to invest in a brick and mortar space because they understand in-store experiences with worthwhile utility are an integral factor in maintaining brand relevance. In a Forbes column, Steven Dennis argued, “Without a compelling store footprint, a brand’s relevance will likely decline and its e-commerce business almost certainly will falter,” because, “store productivity numbers, taken in isolation, no longer get at the heart of a brand’s overall performance in an omnichannel world.

Any Brand Can ‘Just Do It’ Like Nike

Nike has the advantage of being one of the world’s largest corporations, with massive online and offline reach, but any brand can galvanize brick-and-mortar hubs to serve their respective communities. Founded by Ronnie Fieg, Kith (as in Scottish phrase “kith and kin”) opened its first store in 2011 and has since morphed from sneaker empire to trendsetting fashion brand. Like Pat McGrath’s cosmetic line, Kith’s product launches are exclusive and limited. Despite high-volume domestic and global e-commerce sales, Kith’s Flatbush Avenue store in Brooklyn underwent a $2 million renovation in 2015. A key part of that expansion was Kith Treats, a cereal and ice cream bar. In a profile Jian Deleon wrote about Kith for Business of Fashion, Fieg explained, “Some kids can’t afford to buy an article of clothing every other week or every month, so they can leave with a taste.” The branded spoons and shoebox-styled bowls are all very instagrammable marketing, but Kith Treats leans into the community aspect of giving people a physical space to hang with their friends and family. Deleon noted that Kith’s teenage customers often stay for a few hours rather than browsing and leaving. That positive in-store experience carries over to online engagement, then back to the store to repeat that social experience.

The Key: Utility

Mary Meeker’s yearly market research revealed that, “Retail store closings may break a 20-year record, and e-commerce growth is accelerating 15% Y/Y growth.” Based on these numbers, some major offline retailers are making an aggressive shift into the online to online business model. However, current retail innovators have demonstrated through their investments in physical spaces that operating solely online is not enough to flourish. Digital content presents an aspiration that we want to be “in” on, but an offline store has the potential to a give people an experience that feels exclusive but is not exclusive.

Smart retailers recognize the decline in brick and mortar retail is not because of e-commerce. Consumers are evolving and becoming more digitally savvy as time passes. Thriving retailers also know humans can be resistant to abrupt change. We live in a time where everything from our music to our clothes to our food are mash-ups of the traditional and the new, and it would be short-sighted to believe that our relationship with retail cannot successfully apply this concept. To restart the online-to-offline flywheel, your online content should be designed to promote offline traffic that delivers increasing marginal utility to the consumer. No one wants to feel like they wasted their time: Make the effort to deliver utility, and the people will cycle back in return.


Share this post