A Physical Store is Still a Retailer’s Greatest Commodity

Try walking into an Apple store for inspiration about what new retail looks like.

You won’t see endless cluttered shelves full of stock. You won’t see a bulky cash register with a line of people waiting behind it. What you will see is Apple staff focused on serving customers all throughout the store. Customers can explore the Apple products in an environment that feels more like a home office than it does a retail store. When you do buy something an Apple staff member will take your payment on the spot – processed on an iPhone – and then send you a receipt via email.

I love this type of retail experience – it’s frictionless and experiential.

However, it’s important to note that Apple is not the only retailer to bring digital innovation to in-store retail.

Burberry has made significant investment in combining the best of their online and offline environments to create a more immersive brand experience. Burberry.com and Burberry’s flagship retail store on Regent Street, London both provide music, live events, and of course products for sale. Burberry’s aim is for brand experience consistency across their channels.  Customers don’t just come to the Burberry store to buy the products – they come for the whole experience.


ColourIQ from Sephora
Sephora’s ColourIQ

Sephora has invested in technology that delivers a better customer experience for in-store shoppers. Sephora added ColourIQ technology that matches skin tones to cosmetic products and iPads for ordering from the full range of Sephora products. Sephora’s retail strategy is not to compete with online channels, but instead to offer them in-store. This is smart thinking that gives customers choice and convenience.

Myer’s Fountain Gate store, one third the size of its Melbourne store, has added iPad ordering in-store as a means of extending the product range available to in-store customers. Myer CEO, Bernie Brookes, understands the competitive advantage he holds with the breadth and depth of Myer’s product range. This is something that pureplay online retailers find difficult to compete with. When this is combined with a superior in-store customer experience customers must consider what they value most from product range, service and price.

Some retailers have chosen to shun customers who browse in-store and buy online (also known as showroomers and fit-lifters) by charging all customers an upfront fee for pre-sales service. This is the wrong approach that diminishes the customer experience.

Retailers should not fear the advancement of digital technology. On the contrary, it should be embraced and used as a source of competitive advantage. Physical retail outlets provide a customer service and experiential differentiator over pure play online offers. When combined with digital capability this can be the compelling reason why customers choose them over pure play online retailers.

Fundamentally, consumers will make their own minds up about what they value most with respect to each retailer’s product range, customer service and price mix. Traditional retailers have a natural advantage with in-person customer service, which they can leverage and enhance with digital technology.

I look forward to more digital innovation in the retail sector that delivers better customer experiences and grows retail trade.

11 thoughts on “A Physical Store is Still a Retailer’s Greatest Commodity

    • whatjanesays
    • 9th May

    Being an old school shopper, I love the retail experience. However my teenage daughter is more than happy to buy online. Together we represent a strong example of how many people are shopping these days.
    Recently in General Pants we wanted a different colour jumper, the sales assistant looked at stock available and suggested a store (not nearby) or offered us to buy the item online and have it delivered.
    Conversely Sportsgirl currently offer 50% sale of a range of boots which my daughter and I had both seen, however the online stock had run out and most styles were only available instore. I went in store (bought the boots + 2 extra items!).
    Merging the online and instore experience seems to be the best of both worlds for retailers, mastering that process should be a priority for any successful business.

    1. Oh no, what are you doing here? Josh Rowe groupie!

        • whatjanesays
        • 9th May

        I’m a customer Grant.

        1. Welcome to Power Retail Jane!

  1. I had to chime in Josh. Couldn’t resist.

    I don’t disagree about what your saying above. I agree with pretty much all if it. Buy you talk about the shopfront, the physical entity and I don’t think that’s the killer bricks and mortar trump card retail can play.

    I think it’s the people.

    The web can try and try to replicate human relationships and for what it has at its disposal it punches well out of its weight division. But face to face, the connection between a consumer and retailer can be so much more powerful than anything the web world could every dream of.

    Problem is so few actually care about it.

    For a period of time retailers staffed their stores with product experts. Then they realised they could sell more by filling it with product experts that could sell, then more by filling them with sales people that could sell.

    For a period that worked, but eventually consumers got savvy and realised that they we were manipulated and sold to, not having their needs serviced in an honest and dignified way. Thus there was no compelling reason to shop there other than range and price. Playing nicely to the internets biggest strength.


    I image a world where I could send my mum to a electronics store to buy a new TV. With total faith and trust that she will talk to someone who is more focused on making sure she gets the best TV for her needs, not the biggest possible contribution to a sales target with whatever they have in stock. I wouldn’t care if she paid more in retail, because I know she’ll be matched to the right product. I put a bigger value on that well beyond what the online discounter will give me.

    To be honest I can’t see it happening for a while. What I do know is than humanisation, trust and expertise can be more powerful than price and we on the web will try to gain that with every breath. Probably laughing, that retail could have it tomorrow if they wanted — they just haven’t figured it out yet.

    You bring back the expertise, knowledge and focus on the custom back an even a web nerd like me might head back in.

    1. Shayne,

      You’re spot on, customer service is a key differentiator. Apple store staff exemplify that, at least from all the experiences I have had !


  2. I don’t think offline and online are mutually exclusive, nor should they be. Currently technology is driving the purchase habits of consumers. If offline retailers can adapt and embrace technology, not to offer multi-channel commerce, but single view commerce, retail as a whole becomes a very different experience.

    I blogged about this recently.

  3. Shayne hit the nail on the head.

    One of the key factor in the shift in public spend in store is the experience and cost. The public are becoming more aware of same product prices the world over and now know that in a lot of instances have be pay hugely marked up prices.
    A level of distrust in the market, mixed with retailers having terrible service. This service from my experience has been more a katch 22. Reduction in the number of staff (due to online spend), further fueling the shift.

    I know I’ve been guilty of window shopping at David Jones, walking next door to buy at Myer.

    • noddy
    • 29th May

    i walked into an apple store once for inspiration about what new retail looks like.

    i went there because my ipad was busted. i spoke to one of the staff who then booked me in for an appointment for 10.30am 2 days later whereupon someone would be willing to discuss the matter. so i drove back to chatswood chase two days later at 10.30am for my appointment and was told that it would cost $400+ to fix it. this exchange took about 10 seconds. “New Retail”?

    1. Sounds like they didn’t get it completely right in this case. I always pre-book Genius Bar appointments via the Apple web site to save two trips.

  4. I agree with the article AND Shane. The shopping experience is physical retail’s greatest weapon, and people (service) are a part of that.

    What’s needed in Australia is for that experience to be upgraded. There’s a lot of work to be done in this respect, and that’s partly why international retailers are moving into this market – our local offerings had gotten lazy and lacked creativity. Our traditional retailers’ poor performance also left them at the mercy on online disruptors. Now, as trad retail gets over the shock and rediscovers the advantages that a physical store network brings, it also needs to upgrade at store level using the many technologies that exist to bring digital right into the store so as to provide the seamless experience omni-channel retailing demands.


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