The Physicality of the Internet (Retail)
Recently I read a really interesting blog post at one of my favorite blogs, the one from a company called Arcadis (check here). What I like about this blog is that all kinds of professionals from this big development company create entries according to their different type of expertise and the result is a fully diverse source of information that is just really enjoyable to read. Going back to the post from Kostas Koultzis, the Head of Client Service, he’s talking about the future of retail and how millenials actually behave differently to what is commonly believed when it comes to the way they buy stuff.
What I found most interesting was the part when the author wrote “In fact, even 75% of millennial purchases continue to be made in physical stores, resulting in retailers investing heavily in expensive property portfolios”. Meaning that millenials actually enjoy buying from physical stores more than from the Internet, which I did not expect, especially as I personally buy a lot from this source. What he then argues is that we don’t actually do this for the product itself but were seeking the experience provided by these places, something entirely different to how previous generations behaved and a value that the Internet just wont catch up easily.
We can get any range of products in a couple of days and even hours at the comfort of our homes, at a better price through the internet, so why do we still decide to go to stores? Well, because the experience is what retailers are focused now, at least the good ones, take for example the use of a simple product like coffee and analyze how many hip coffee shops are being popularized today in your city, is not the product, is the way they make you feel, the status and the experience they deliver, the added value has become the real product of these stores and the main product has become the added value paradoxically.
The author then sais that for retailers to be able to compete and remain justifiable, they have to integrate the internet into this experience so the upcoming generation still follows this trend the same way, retailers must think how to keep up with a generation of people that where born using the internet.
¨The major missing link for retailers is connecting with customers, especially millennials and GenZ, when they are close to and whilst they are in the stores themselves. They can deliver real time information and personalized offers that enhance their customer journeys, but how can retail property react to digitization?¨
¨GenZ have more time to spend in stores so retailers need to create spaces that they find attractive. A digital screen will not impress them, but tailored content on that screen will. Therefore incorporating the design of the digital content into the property strategy is key to creating a space that will keep the customer in store for more time, and ultimately spend more money.¨
I agree with the author in this, new types of spaces need to be incorporated into retail stores since the new generation is busier but with a lot more flexibility, enabling them to work and spend time in this kind of places; creating new opportunities for companies to take advantage of if they develop the right environments, ones that take advantage of this generation natural instinct of the use of internet. How do you think spaces will change over time? Or how do you think our buying behaviors will develop?
Microsoft's take on the subject here.