Retail
Chronicles
Monthly Newsletter | Volume 6 | Issue 8 | September 2021
CONTENTS 03
TECHNOLOGICAL INNOVATIONS IN MORTAR STORES
BRICK
&
Brick and mortar stores are now going digital. use of smartphones, digital payments, use of AR and VR, being some of the major transformations.
06
10
Akshita Kulshreshtha | Aayush Ghildiyal | Raghav Khandelwal | Harsh Gupta |
JUNIOR DESIGN TEAM Abhishek Jain | Hrishikant Mane | Mansi Vora | Ruttwik Bowlekar | Yash Bhojwani | Yuti Talati |
SENIOR DESIGN TEAM
E-COMMERCE TO BRICK AND MORTAR STORE
Nilesh Agarwal | Prachi Sharma | Prashant Sihag | Shivani Kunkolienkar | Sneha Patel |
Customers are moving from online to offline for a more realistic experience.
EDITOR
TOP VISUAL MERCHANDISING PRACTICES: RETAIL INDUSTRY Creating a Visually appealing store has always been one of the key and strategic activities for a retailer, like using pictures of products, artwork.
13
WRITERS
CHALLENGES FACED BY BRICK AND MORTAR STORES Brick and mortar stores compete with a world of e-commerce where everything is available and the tip of your finger accessible from anywhere in the world.
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PODCASTS
19
INTERESTING CROSSWORD
Riya Shah
TECHNOLOGICAL INNOVATIONS IN BRICK & MORTAR STORES
Akshita Kulshreshtha - MBA RM Retail Chronicles | Page 03
September, 2021
Brick and Mortar stores were the bread and butter for most Retail Businesses till 2020. However, as the Pandemic hit, it took away a large share of sales done by these stores. The resources were then reallocated to online sale channels, and the entire picture for a retailer had changed. Needless to say, technology had a huge role to play in it.
interests and then lead them to the choice of their products.
Now, there is a ray of hope for physical stores. The world is finally opening with new norms. But the consumer is now habitual of technology. There is a world of technological innovations that have taken place in these past two years. How could the Retail Industry have been left behind in this case?
Hellman’s Mayonnaise installed tablets on their carts. These tablets would scan the products inside the customer’s grocery cart to suggest them recipes. With tablets, customers get meaningful experiences that enable them to make the right buying choices.
Over the last two years, there is also a host of technological developments that have taken place for the physical stores in the Retail Industry. Let us have a look at some of them: 1. Use Of Tablets One thing that was already in use when the Pandemic hit was touchscreens. Be it Kiosks or Payment Booths. Touchscreen tablets come in handy in all the Brickand-Mortar stores. In some stores, Tablets are used to capture customers' Retail Chronicles | Page 04
There are some apparel stores that use 3-D body models that help customers decide the correct fit for themselves. Custom Apparel in New York is one such store that uses a 3-D scanner to customize clothing for its customers.
2. Augmented Reality and Virtual Reality AR is probably one piece of technology that has the potential to change the entire shopping experience for offline shoppers. There are several furniture stores that have been using AR technology to market their furniture. This technology helps the customers visualize how a piece of furniture would look like inside their homes. Virtual Reality, on the other hand, gives a different kind of shopping experience. Topshop, in its latest stint, live-streamed September, 2021
the London Fashion Week customers with the help of VR.
to
their
3. USE OF SMARTPHONES QR code scanners are an effective way to use Technology in Brick-and-Mortar stores. There are a lot of stores that use QR codes for enabling payments, access vouchers, etc. Several stores use smartphone-coded tags to allow customers to select variants of products. E.g. in apparel stores, these codes can be used to choose the size and color of an item. There are many stores that use *Social Proof* to showcase their top products. Nordstrom is a brand that showcases its top pinned items in its stores. 4. Location-Based Services Geo-location services match a customers’ interests with the products available in nearby locations to show them special offers. This kind of service is called Outdoor Location Based Service. His service helps retailers know when their customers are nearby, This kind of service is called Outdoor Location Based Service. This service helps retailers know when their customers are nearby, and at the same time, they can reach out to them and
Retail Chronicles | Page 05
invite them to their stores with a message or a promotional offer. Customers can be reached out using mobile phone applications that use the LBS Technology. Another technology is the Indoor Location-Based Service. When the customers are walking around the stores, they are sent a notification for offers and discounts on their products. Two of the major technology giants, Google and Apple, use this kind of service. Macy’s is also a retailer that uses this technology. With these technologies, sellers can practice precision marketing, and it saves a lot of time and effort that goes into selecting your target audience. Getting Started The new normal is starting, and the customer is looking forward to things that make him return to the physical stores again and again. Hence, shopping is not just shopping now; and it is experiential. It is crucial for a retailer to make shopping an experience for the customer, at the same time making up for all the time they lost while the world was locked up.
September, 2021
E-COMMERCE TO BRICK & MORTAR STORE EVERYTHING OLD IS NEW AGAIN
Aayush Ghildiyal - MBA RM Retail Chronicles | Page 06
September, 2021
Today, every business is continuously striving and innovating to provide a magical experience to the customers, leaving them spellbound. As the customer steps into the store, he should get something he didn't expect such as an exceptional service, a futuristic environment, or an experience that leaves an impression on the person and makes them want to return to the same experience again and again.
New retailers are emerging, those who started online and are shifting to brick and mortar stores, and those who are merging the two: “ Bricks and Clicks.” Brands like Pepperfry, Urban Ladder, and Lenskart, who started their journey using e-commerce and became very successful, were driven to open a brickand-mortar store. The possible reason for such shifts of these retailers could be: Retail Chronicles | Page 07
• The Halo Effect of Omni-Channelling: A market transformation is underway where brick-and-mortar stores leverage e-commerce to build an omnichannel experience for the customer. Ecommerce sales are bolstered by these symbiotic relationships. Brick and mortar stores enable customers to experience the product they are buying and avoid return fees. This relationship generates a halo effect for physical stores and vice-versa. Omni-channel helps bridge the gap between the convenience of online shopping and the experience of a retail store. A physical store can meet its customers and offer them the human interaction that is missing online. These personal interactions also help brands create a more personalized experience for their customer.
September, 2021
• Multisensory Customer experience: There is nothing better than holding the product in your hand, feeling the fabric, and seeing the smallest details-this is impossible online. A report in 2017 by KPMG showed that 73% of consumers want to try on or touch products before buying. Brick-and-mortar stores allow consumers to interact with a range of products to make intelligent purchasing decisions. In addition, physical stores are busy using technological advancements to upgrade rooms, improve customer experience, and effectively eliminate online guessing games. Is the size or the fabric wrong? Or maybe it fits perfectly, but you want to try every available colour option? These are the problems that E-commerce brands look to solve by opening brickand-mortar stores for their products.
According to Urban Ladder's internal research, 21% of online customers do not completely understand the product. The data also shows that 45% of customers believe that the offline experience of the product validates the pricing attached to the product, which may look unreasonable online. They have created their retail floor with stunning visual merchandising and intelligent, creative messaging to catch customers' attention. They have integrated technology like QR codes, AR and VR, to enhance the customer experience.
Similarly, Lenskart in 2014 opened a store in Delhi as an experiment, and the customers loved it. Here they solved the problem of trial that the customers faced while shopping online. Retail Chronicles | Page 08
September, 2021
• Strong and Lasting Brand Relationships: As we move from the era of transactionbased retail to the age of relationshipbased retail, Indian customers are looking for more than just products to buy. They are looking to connect with the company where they provide business; it could be because of a sustainability reason the brand stands for or simply the experience they provide. However, when consumers' primary interaction is through computer screens or smartphones, it is not easy for online retailers to provide them with a unique brand experience. For this reason, online retailers see physical stores as a way to effectively engage customers and build strong, trusting, and lasting relationships.
The loyalty a brand can establish through a brick-and-mortar store is unparalleled. You can impress a customer by the store's experience (the lighting, cleanliness, technology) or your exceptional customer service, which makes you stand out and earn a customer's loyalty.
2020 was a massive year for ecommerce, with the highest year-on-year growth in the last 20 years. In no way does that mean that physical stores are on their way out; the pre-pandemic era saw Amazon, the largest online retailer, invest heavily into physical stores. The perspective of increasing customer appeal as a means to boost sales pushes e-retailers towards establishing a realworld presence. A new strategy based on data points collected from customer feedback is the need of the hour. A brick-and-mortar store needs to predict the changing demand and tastes of society and adapt accordingly. A physical store should be a happy place for customers to feel safe and valued, and they should look forward to going to a store. Retail Chronicles | Page 09
September, 2021
TOP VISUAL MERCHANDISING PRACTICES: RETAIL INDUSTRY
Raghav Khandelwal - MBA RM Retail Chronicles | Page 10
September, 2021
Creating a Visually appealing store has always been one of the key and strategic activities for a retailer. Basically, visual merchandising is the display and promotion of products in a retail store. Acting as a 'silent salesperson' is the perfect name for visual merchandising as the way it boosts the performance of a store in that way. Having a visually appealing store helps the consumers to find the products quickly, and it also helps to encourage customers to buy more. In this article, we will learn some of the top practices of visual merchandising being used by retailers all around the Globe.
One of the best examples in this context is IKEA, one of the well-known companies known for its store layout. For instance, they decorate their furniture with other offerings creating a home environment. This has proved to be one of the critical drivers for the company's Sales.
Paint-a-Picture: Using pictures of products has always proved to be quite valuable for retailers. Customers get a visual cue about how the product will look before they buy. Using Artwork: Many-a-times, we have observed that successful retailers use artwork in their stores. This displays creativity as well as creates an image of being intrigue for their stores. However, to really create differentiation for the retail store, using its own products as a piece of art has proved quite effective. Retail Chronicles | Page 11
September, 2021
Using Social-Media language: In today's world of social media, where every person uses different mediums like Instagram, Facebook, and many more, retailers are taking the opportunity of this scenario. People's attention span has become relatively more minor, so being to the point and crisp can communicate information more effectively, especially millennials. Also, the brand using this approach seemed to be on-trend with the latest social media lingo.
Lowe's, a major North American retailer in the field of home improvement goods, has started to use robots in place of humans in stores and created a VR/AR infrastructure for displaying their interests. Utilizing the POS (Point of Sale): Using visual merchandising in the cash counter area is crucial as it implies that every area of the store should be utilized and consistent with its image. The POS display can show products conveying that customers may have forgotten to pick up some items. One of the famous activewear retailers, Lululemon has used the checkout counters to promote its CSR initiatives. They have highlighted the #MAKEYOURSMATTER initiative through a small sign in their checkout, which adds to the brand's value.
Using the latest Interactive Tech: In the world of retail, using Virtual Reality has started to take place, and this tech may become standard for every store in the future. Customers can know how the product will look virtually, which implies a better experience. Although this practice is still in its initial phases, the penetration of VR may increase in the future. Retail Chronicles | Page 12
Conclusion: The examples discussed above show how much can be accomplished using visual merchandising. Adding a personal touch and easing the process can boost the effectiveness of the store. Overall, it is all about how much we are aware of the customers' needs and wants to engage them with a pulling effect through visual merchandising. September, 2021
CHALLENGES FACED BY BRICK AND MORTAR STORES
Harsh Gupta - MBA IB Retail Chronicles | Page 13
September, 2021
Life was so simple in the past. But then, there was a boom in internet users. This boom in internet users, or the internet revolution, has a significant impact on almost all sectors. One of those sectors is the retail sector. Because of the internet revolution, many e-retail stores have emerged, and there has been an increase in their growth. However, there has been an entirely different impact on physical stores, or you can say Brick and Mortar Stores.
their salesperson, direct contact, etc. But today, the scenario is complex. In the past decade, a boom in the retail sector has been observed. However, in the past five years, consumers' preferences for shopping platforms have been changed drastically. There are several new ways to interact with the consumers, but they are not as engaging as the online retail shops, surrounded by technological innovation. As a result, there has been the downfall of large chain stores, which has captured much attention from the press media and social media. This shutting down of the retail stores can also be called "Retail apocalypse." The brick-and-mortar retail sectors face a few challenges: 1. Property:
The brick-and-mortar stores interact with the consumers through their stores, Retail Chronicles | Page 14
The biggest challenge for most businesses is getting the appropriate land to start their business in stores, offices, etc. Some companies struggle to get the property at a reasonable price or rent; some face problems getting the land at the appropriate location, and many more. September, 2021
In the case of retail business, the location plays a crucial part in the business's success. Moreover, because of the rents and the store running cost, the physical retail owners can't expand their inventories.
3. Cost of innovation to interact with the consumer:
2. Competition with online retails: This is the modern-day challenge faced by retail stores. After the internet revolution in India, more and more people prefer to buy products from online retail shops. Especially products like mobile, earphones, makeup, books, etc. Because of this, the brick-andmortar stores are even bound to lower their margins compared to the online stores. As a consequence, they face many difficulties to cover the running cost of the offline stores.
There has been a significant impact of the user experience on the consumers' preference of shopping platform preferences. E.g., if one has to buy spectacles, frames, etc., the first choice for most consumers would be online retail shops like Lenskart because of the user experience they provide. It is tough for them to spend a huge investment on these innovations in brick-and-mortar stores, especially when facing other challenges. Moreover, if they invest in innovation, they have to pay for more user-friendly innovations.
Moreover, the offline retail shops are not just the place to shop now; they are more like a store where people come to get the information of the products, to see how their product will look like after they receive the product from online stores, to compare products, to spend leisure time, etc.
Retail Chronicles | Page 15
September, 2021
4. Inventory Management vs. Customer Satisfaction: Each customer is different, and so are their preferences. It is difficult for brickand-mortar stores to maintain and to invest in a vast inventory. So, when they cannot meet the consumer's demand, they have to order new products, resulting in a delay in the purchase, thereby causing inconvenience. To avoid this and to get more choices, consumers prefer online retail shops.
change in climate, etc. Because of this, the retail stores are not able to cope up with the fluctuation. They can't sell the goods at a price less than their purchase price as they have limited stock compared to online retail stores. 6. Data Collection: Unlike online retail stores, physical stores cannot track consumers' preferences and buying patterns. So, it isn't easy to reach and target the right customer. They can't even advertise their products as the online retailers do.
7. Reach:
5. Product cost: There has been a significant effect of global economic and geopolitical forces on the cost of goods. The price of goods may change due to trade war, inflation
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Online retailers spend most of their time, effort, and money on online assets like websites, applications, etc., and this effort is negligible in physical stores. Therefore, the reach of online retailers is way more than the offline retailers.
September, 2021
8. Labour Cost: Apart from the other challenges, the retail stores are also facing labor issues. Because of inflation, the demand for labor is increasing. So, it becomes tough for the retailers to afford the cost of labor and the other challenges. So, because of the above and many other reasons, the increase in internet users, and consequently e-retail shops, is giving a tough time to the brick and
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mortar stores. So to reduce the impact of e-retail shops and use the benefits of the internet, it is advisable for the physical shops to have an online presence via Facebook, Instagram, business whats app, website, etc. Apart from that, they should also work on building local yet strong network to cater to the consumers' demand as soon as possible. Moreover, they should also focus on making the customer experience attractive, engaging, and, most important, easy interaction.
September, 2021
PODCAST
TECHNOLOGICAL INNOVATIONS IN BRICK & MORTAR STORES
-AKSHITA KULSHRESHTHA
E-COMMERCE TO BRICK AND MORTAR STORE
-AAYUSH GHILDIYAL
TOP VISUAL MERCHANDISING PRACTICES: RETAIL INDUSTRY
CHALLENGES FACED BY BRICK AND MORTAR STORES
-HARSH GUPTA
-RAGHAV KHANDELWAL
Retail Chronicles | Page 18
September, 2021
C W O R D
O S S
Retail Chronicles | Page 19
September, 2021
Across 4. Service that matches customer's interests and shows them offers nearby 5. 71% customers prefer trying or _____ the products before buying them 7. Mayonnaise brand that installed tablets on their carts 8. Another name for visual merchandising as it boosts Sales of a store
Retail Chronicles | Page 20
Down 1. Hashtag used by activewear brand to promote its CSR initiative 2. The feature that allows customers who buy an item online to pick it up in the brick-andmortar store? 3. Challenge faced by Brick & Mortar store in employing store staff 6. It is challenging for a brick & Mortar store to keep and maintain a vast
September, 2021
REFERENCES https://www.workjam.com/2019/09/4-challenges-facingbrick-and-mortar-retailers/ https://hbr.org/1999/07/retailing-confronting-thechallenges-that-face-bricks-and-mortar-stores https://medium.com/@centareum/challenges-brick-andmortar-stores-face-in-the-changing-retail-landscapeb08a6d38bd8b
/retaillabsimsr @Retail_Lab @Retail_Lab