Retail therapy as a phrase has picked up a bit of a reputation over the years. There are those that think of it as a frivolous waste of money and those that swear by its benefits. The opinions are extremely polarized. For the business of retail this has been a big part of what allows them to keep customers coming back repeatedly, making purchases that would not be deemed necessities in their most basic sense.
Whether it is the classic displays, intelligent retail design or just the thrill of a purchase that has kept customers coming back, retailers have banked on retail therapy to account for a large chunk of their revenue. When you break down buying intentions, it seems like there are some times it works better than others but there is no denying its power over consumers.
At their peak, physical retail empires blossomed. The larger they got, the more profitable they became. Quickly they began to encompass more and more real estate creating gigantic immersive experiences for the consumer. The retail environment could be molded. Touch, sight, sound, taste and smell. All five sense could be used to create an buying experience for customers.
With the large scale shift in behavior moving to an online point of purchase, the large retail industry has had to evolve. Physical retail was no longer be able to accommodate the sprawling expanses it could in the past. The massive real estate industry that accommodated these stores began to see a shift. Large was no longer profitable so the industry began to focus on new formats of businesses to pick up the slack.
The online market has eaten to a large amount of market share but this in no way indicates the death of the physical store. The smart brands will always find a way to bring value to their customer. Experts predict automation and technology will creep into most physical spaces soon enough.
The large shift has left retail organizations with a new set of challenges. They have to find a way to replicate the experiential side of retail without the luxury of a dedicated space to create an experience for the customer. Their point of purchase is online, the customer’s physical environment can not be controlled in any way. The challenge is to create the same set of experiences within the restrictions the technology provides.
Online lingerie stores cannot offer the discreet assistance and luxury that a physical store might be able to. An online sports goods retailer can not allow the consumer the option of trying on an unlimited number of shoes before they pick the one that they are the most comfortable in.
These online brands are taking the traditional shopping experience finding the components that translate well to the online world. Sometimes they use old tips and tricks in a new agile format creating a hybrid online, offline experience. On other occasions they begin to treat the customer experience as a wholistic sum of all its components. The experience is not just the actual purchase but every social media interaction, the efficiency of the delivery process and even how the company’s top management might be seen in the media. The emotional bond is no longer restricted to only the purchases.
The big advantage online retail has over physical retail has been convenience. Above everything, having the ability to buy a product and have it delivered to your home will always have value. While the price advantage can be debated, online retail can not afford to let its processes slip. They have to make sure the experience of making the purchase is one of delight. Whether it is packaging, delivery or returns, the cost of poor processes is too high. In this highly competitive world customer expectations have never been higher. With the advent of social media, customers can vent their frustration on very public forums and cause a large crisis in image and perception.
With all the challenges to overcome, online retail can not be denied the market share it has snatched from the physical market. It only keeps growing. It is no longer fair to consider it an alternative channel. For any business at some scale it is now the norm that can not be ignored. Of course there will always be the small niche businesses that will continue to pop up but as a macro trend online retail is here to stay. Over time, we can see it driving its tentacles into segments ranging from day to day groceries to real estate. There is no segment that has managed to resist the flood. People are using e commerce platforms for more products and services than ever before. With the rate at which technology is developing, it would seem like online retailers will only get better at recreating and re defining the experience of buying things.