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More and more consumers are moving online as a result of digital adoption and increasing demand for convenience. But stores still have a purpose as part of the shopping journey, especially for brands such as Lego, Vans and M&Ms.
Representatives from each of these companies told audiences at Retail Expo what role physical stores play in their businesses – and it’s very much embedded in developing customer affinity with the brand.
“The stores are a playground, they’re a point of activation and engagement and fun play,” said Diego Baronchelli, vice-president of direct to consumers EMEA for skating shoe brand Vans. “The very first thing we keep in mind is the customer and how we express the brand to our customer.”
Online shopping can provide convenience, price comparison and ease, but the panel argued that stores are more “tactile”, can act as locations for experiences, and enable people to meet others with similar interests.
As a brand embedded in “youth culture”, Vans, and brands in general, are increasingly becoming a medium that consumers use to express themselves, said Baronchelli. “We want them to express their creativity,” he added.
Retail stores and self expression
People’s ability to use a brand to express themselves can be used as the unique selling point that many physical retailers need in a world where digital shopping is overtaking in-store purchases.
Sharing images and experiences on social media can be a huge part of this community-focused customer behaviour, and Jamie Dunning, general manager of M&Ms retail at Mars Incorporated, went as far as to say that customers have gone “tribal” and stores are a place to host that type of behaviour.
“This is about building tribes,” he said. “Make as many experiences as you can sharable around that store.”
To provide customers with the value they are looking for and to reward their effort in going to a physical space, retailers are increasingly looking to make stores locations for experiences rather than purchases – something Dunning said is “not new” but just different from what it was before the era of online convenience shopping.
“Why we’re talking about experience more and more now is that consumers are looking for brands to be a means for their self-expression,” he said.
“People want to share that, there and then, with their friends and family with photos posted.”
So why is the term “customer experience” becoming embedded in the conversation around physical stores, despite it being equally as important online?
For M&Ms, stores allow customers to “connect to the brand on a level they just can’t everywhere else”.
Dunning said people are far more likely to buy M&Ms candy in a supermarket or food shop – it’s cheaper and you have access to most of the flavours. But that’s not what the M&M stores are about, he said.
“The role of the stores isn’t necessarily about attracting footfall,” said Dunning, but about the “full experiential context of the moment in time”.
Lego stores, especially the flagship outlets in cities across the world, are another example of where people gather for community and experience rather than just purchases.
“You don’t have that same level of engagement and direct support when you are shopping online,” said Simone Sweeney, vice-president of global retail development at the Lego Group. “For us, the experience is core.”
Sweeney said many Lego stores are used to test particular experiences to see what works and what doesn’t. Lego as a product is very hands-on, she said, and the stores are the “beating heart of a Lego-engaged community”.
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The Lego brand often run events at these locations to give people early access to certain products – drawing consumers in to buy items that they might otherwise order online.
For example, said Sweeney, a number of people were invited to an exclusive launch of one of Lego’s Millennium Falcon building sets, a large item that people would usually buy online but which was tied in with an “unmissable experience”, with attendees able to meet its designers and get signed products.
Lego stores also bring a level of personalisation. In some larger stores, customers can print their own mini figures, and the “mosaic maker” photo booth allows people to develop a 3,000-piece Lego set which, when assembled, will make a picture of the customer’s face.
People spend an average of up to 27 minutes engaging with this service in stores, said Sweeney, adding: “This is an incredibly high-margin product for us – it has incredible novelty.”
Sweeney pointed out that there are more Lego mini figures in the world than there are people. “Those are really fun and low-cost, quick engagement experiences in the stores that speak to everyone,” she said.
The company’s flagship stores also have 3D Lego models of landmarks and people – the London flagship has a 3D model of Westminster Tower, which was the only place in London where people could hear Big Ben chime when the real bell was being refurbished in 2018.
These models are simple and low-tech, but also “so sharable”, said Sweeney. “You just can’t do it all online. Sometimes you just want to have that direct hands-on or assisting and supported experience.”
Sweeney, as well as M&Ms’ Dunning and Vans’ Baronchelli, said consumers are also increasingly demanding of firms to do more to help the environment, among other things.
“Sustainable initiatives, environmental engagements, social outreach – stores are a natural place for that to happen,” she said.
Community engagement has become equally important for Vans, said Baronchelli, and in many cases consumers are increasingly conscious of the contribution that brands are making to the local community.
Vans has taken the community-building aspect of its brand outside physical stores and into local areas around its shops by building skate parks.
Baronchelli said this was a way to give back to the Vans community, as well as grow the community in the areas where the brand operates.
“We really want to make the community come together and enjoy the playground and being out,” he said. “We call ourselves the Vans family. We’re not a shoe company, we’re a people company.”
Not too much tech
Much of the conversation around making stores relevant is about how technology can enhance the store experience, but the panel warned against too much focus on technology.
Baronchelli said that if you are not already doing all of the important things for your brand – delivering an above-average service, authentically portraying the brand – it will not be “saved” by tech.
“We love digital, it’s all part of the culture, but consumers don’t show up to a channel,” he said.
But while more than 80% of Vans customers interact online with the brand initially, “the retail space is just a different way of interacting with us as a retailer – it just has to be as good”, said Baronchelli.
Similarly, M&Ms’ Dunning said the “basics” need to be done well before customer experience and technology are layered on top.
He advised those trying to make stores more relevant not to be “greedy” with technology, but to make sure the basics are done well and “just enough” technology is used in stores to ensure that areas of the customer experience such as payment are seamless.
“The experience is not any one bit, it is the full set of components of doing the basics well,” said Dunning. “Make sure it’s a very good retail operation to start with, and then a bit of fairy dust.”
Lego’s Sweeney added: “I think I would always choose people over cool tech and experience every time. They are the playmakers, and they are the people who are reading the situation.”
Staff members in Lego stores are “deliberately” hired and trained to connect with customers, encouraging children to draw their parents into building things with them in stores, she said, which is “not something you get from tech”.
Sweeney added: “A well-trained employee is worth £100,000 in technology every time.”