LEGO Hey, all you consumers out there who've been shopping more and more online: Retailers are spicing up their brick-and-mortar stores to keep you walking through the door. Their game plan? To design store environments that are equal parts high-tech and homespun.

Companies at the National Retail Federation's convention in New York City this week explained how they're courting today's digitally wired consumer by bringing interactive technology into stores, such as the new self-service cosmetics kiosks at Macy's (M). But they're also working to engage shoppers on a more personal level by fashioning stores that double as social hubs, with everything from health and wellness centers to cupcake shops.

At the convention, merchants talked about crafting "experiential" shopping environments that reflect contemporary consumer purchasing behavior (think mobile checkout), while finding fresh ways to create what Starbucks (SBUX) CEO Howard Schultz has termed "a third place" for shoppers between work and home.

And stores are becoming cozier in more ways than one. Those stadium-sized establishments that blanketed the retail landscape over the past few decades? It looks like there will be fewer of them now that the growth of e-commerce has rendered much of that store space obsolete, said industry executives at the show.

"Store size and footprint are getting smaller," said Alison Paul, vice chairman and U.S. retail distribution leader for Deloitte LLP, during a session titled "The Next Evolution: Store 3.0."

"People don't need as big a store because they can get everything online," echoed David Jaffe, CEO of Dress Barn parent company Ascena Retail Group (ASNA), during the session. Several attendees cited Best Buy (BBY) as one retailer in the process of downsizing.

Retailers don't want their stores to be reduced to mere showrooms for their e-commerce sites, he said.

While online retail sales are still a small percentage of total retail sales, e-commerce growth rates are outpacing traditional brick-and-mortar stores every year, according to a new Deloitte report. "In fact, the average growth rate of online sales has been about 20% annually, while the growth rate for traditional retail sales lags far behind, averaging about 3% per year," the report says.

Hence, "retail executives are feeling pressured to deliver a better, more differentiated experience for customers," the report says.

The solution, Paul said, is for merchants to come up with compelling, distinct shopping concepts, like Apple's (AAPL) Genius Bar -- they have to become "the place to be."

A High-Tech Transformation

Macy'sRetailers are tapping technology to bridge the gap between their e-commerce sites and physical stores.

Macy's, for one, taking a page from merchants like Sephora (LVMUY) that sell department store beauty brands in an "open-sell" -- or self-service -- environment, is testing Beauty Spot kiosks in four stores.

Beauty Spots feature interactive touch screens where shoppers can browse a mix of cosmetic and fragrance brands without the assistance of a sales person, sample testers, access detailed information about products and beauty trends, how-to content like "get this look," and find promotional offers. Shoppers can print out a list of products they'd like to purchase as well as download the information to their mobile devices.

With these kiosks, Macy's is looking to appeal to consumers -- particularly younger shoppers raised on stores like Sephora -- who prefer to shop for beauty products on their own, as opposed to with the guidance of a sales person behind a makeup counter.

Adidas (ADDYY), too, is leveraging new technology to extend its store inventory. The sportswear retailer/wholesaler has developed a virtual footwear wall that puts a seemingly limitless selection of digital shoes from its global product mix at shoppers' fingertips.

By interacting with a 3-D digital display that serves as an extension of the shoe shelf in a store, shoppers at brick-and-mortar stores can inspect products not in stock from any angle, rotate and zoom in on the virtual shoe, and pull up product information.

The virtual footwear wall launched in Adidas' London store, and could debut in the U.S. market in 2013, said Chris O'Malley, director of retail marketing for Intel, which makes the technology that powers it.


As part of Whole Foods' efforts to promote healthy eating, the retailer is testing a wellness club in its Tribeca store in New York City. Shoppers can "sign up for it like an HMO," he said. Paid membership includes cooking, exercise, health-education classes, as well as community events such as talks with published authors and inspirational speakers.

And in its store on the Bowery in New York City, Whole Foods is testing a Beer Room stocked with over 1,000 beers. Cerevisaphiles are on tap to offer shoppers their expertise.

Beer room

Homey touches even extend to dressing rooms.

Dress Barn and sister chain Maurices set out to conjure "a third place" by re-imagining its dressing rooms as "more of a social experience," Jaffe said.

Trying on clothes "can evoke negative emotions for women," he said. To that end, they set out to create a warm, inviting area by adding comfortable seating outside the fitting rooms for friends and family, stringing up chandeliers for ambiance, and as a personal touch, placing plaques on fitting room doors where shoppers can write their names.

Bloomingdale's is luring shoppers with trendy sweet treats. At its Manhattan flagship, the tony department store has added a Magnolia Bakery, the hip New York City cupcake shop that became a household name thanks to Sex and the City. It's about shoppers finding "the unexpected," Mike Gould, Bloomingdale's longtime CEO, said at the cocktail party.

The bakery is just one facet of Bloomingdale's push to add elements with "a wow factor" to its stores, Gould said.




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146 Comments

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howard

our local Best Buy is a fairly good store front and has a variety of products
that smaller sites (physical) probably don't
i haven't been jacked up by their staff.
they seem, here at least, customer oriented and helpful
i have both a personal and corporate account there.
if they had 'a Beer Room stocked with over 1,000 beers' i'd be happier nods to that!

January 24 2012 at 7:25 AM Report abuse rate up rate down Reply
D M

If I can not see it, touch it.. And walk out of the store with it. I will not buy it.. The only thing I buy online is DVDs and Books...And E books..

January 23 2012 at 8:35 PM Report abuse rate up rate down Reply
Nancye Combs

Hey Best Buy!! I told you in 2008 that your day will come and you will reap the result of your insults and lack of service. Your BB would no longer stand for Best Buy. It will stand for Bye Bye...Hmmmmm...you have no idea who I am , but I want you to know that I am the customer. I am the person with the money.

January 23 2012 at 7:45 PM Report abuse rate up rate down Reply
jcajunque

Sorry Macy's but I don't want a kiosk telling me what shade of foundation and so forth. I want a human who's been train to help me. We still want that homey touch of an actual human standing across the counter. We want to feel like we matter to the retailer. The best sales person knows how to connect with the shopper. Those that can make the connection are much better and more successful at sales.

January 23 2012 at 7:36 PM Report abuse +1 rate up rate down Reply
dragondancer1814

What difference does it make what these companies do to their stores when at least half the American population can't even afford to shop there anyway?

January 23 2012 at 7:31 PM Report abuse rate up rate down Reply
mmrthunderbolt

I don't care what the store looks like, price and quality is what counts. Most people are under or un employed anyway so who cares about plush stores???

January 23 2012 at 7:27 PM Report abuse rate up rate down Reply
lpi2007

Hell, these places charges 400x what they pay for it, they want to much for junk....

January 23 2012 at 7:21 PM Report abuse +2 rate up rate down Reply
captj1

Bass Pro shops is a great store..it is like a museum with aquariums and a good restaurant..its like a toy store for adults

January 23 2012 at 6:55 PM Report abuse -1 rate up rate down Reply
jlogan2664

I was at Best Buy yesterday and spent 20 minutes looking at printers and not one single sales associate asked me if I had questions or needed help with anything and the place was practically empty. I decided they didn't want to sell printers very badly and left the store without buying anything. I don't want them falling all over themselves trying to sell me something the minute I walk in the door but after I've perused awhile, a little help would be appreciated without having to flying tackle a sales associate to get it. I'll take my business and my money elsewhere.

January 23 2012 at 6:44 PM Report abuse +2 rate up rate down Reply
2 replies to jlogan2664's comment
dragondancer1814

HH Gregg is a MUCH better store. The variety of items is just as good, the prices are affordable, and the salespeople go out of their way to make sure you are being helped to the best of their ability.

January 23 2012 at 7:32 PM Report abuse rate up rate down Reply
gopispoison666

Was in BB once and was considering a laser printer, but wanted to know how much the toner cartridges were, but they didn't have them and didn't know.. ??? Cuckoo.

January 23 2012 at 8:12 PM Report abuse rate up rate down Reply
Michele

I have never had a customer service problem at Best Buy except the line at the desk. They have always been courteous, helpful and if not knowledgeable, they found someone right away who was. I have not had a hard time returning anything either as long as it wasn't something you can't return opened that is not defective such as a duplicate video game. Once it's opened, it's not returnable unless defective. They do have a restocking fee for those buyers with remorse but that's because they sell "open packages" at a discount, someone has to make up the loss it should be the indecisive buyer. I've never had trouble with parking there either. Only the long check out lines during Christmas and the long line at the customer service desk, small things when most every other store has the same problems. I like their Reward Zone program and their prices are competitive. I've always been able to find a knowledgeable sales associate, however sometimes there's a line for them too on special sales days.

January 23 2012 at 6:41 PM Report abuse rate up rate down Reply