Matthew Rhodus, director & industry principal for retail vertical at NetSuite, initially shared some rather depressing statistics revealing the extent of planned store closures for 2017: Radio Shack – 552 stores; Payless – 400 stores; Crocs and Abercrombie & Fitch - 160 stores each, among hundreds of others.
However, he then pointed to research from the US Census Bureau, revealing that while the proportion of physical sales has dipped as online sales have grown – 96 percent versus four percent in 2009; 92 percent versus eight percent in 2016 –actual shops still account for the vast majority of sales.
Design Within Reach is one of the few retailers expanding its footprint of physical locations as others rush to shut up shop. In the past, its stores were about 3,000 to 4,000 square foot, but the firm is now opening new stores that are somewhere between 10,000 and 25,000 square foot.
Design Within Reach was founded in 1998 with the intention of making modern design classics accessible to a wider audience and without the need for long wait times. The firm also supports new designers through its product development department. The company is a full-spectrum multi-channel retailer, with an e-commerce site, a call center, a catalogue, around 35 stores, an outlet, an eBay site and a B2B division.
Bethany Kemp, Design Within Reach VP of Technology & Information Systems, said that brick and mortar is so important to the firm as 65 percent of its business is done through its stores, compared to 15 percent online, while the physical order volume is more than twice that of online. She explained:
If you think about furniture, and the last time you bought a sofa, if you look at it online, it doesn’t really tell you how it’s going to sit. With furniture especially, it’s important because customers need to touch and feel and sit on the product. They need to know how to adjust their Task chair to suit them – we sell lots of Task chairs. That experience of sitting and feeling the prod is something that is never going to go away.
For furniture suppliers, customers will often want to feel and view the range of fabrics offered, including the colours options, and materials like leathers. Kemp said:
You want to touch and feel what those fabrics feel like. You want to look at those fabrics next to the wood options and the metal options and see how it’s going to look in your space or take home a swatch. That’s another important part of our in-store experience.
People also want to be able to picture themselves inside a space. Instead of looking at a row of chairs or a row of sofas, you come in and look at rooms. We have a number of room settings where you can try out four different living rooms, try out four different bedrooms, and look at some of the ideas we’ve given on how you can mix and match some of those classics and some new designs. How might it look with that favourite vintage piece I have in my home.
Design Within Reach is also keen for people to visit its stores to get personalised advice from its team of hire design enthusiasts, including former interior designers and architects. Kemp said:
If you’re about to spend $10,000 on a sofa – we have sofas that are that much and more – they want somebody to talk with them about the options. It’s a considered purchase. We offer that personalised design consultation, and that’s hard to do over the phone.
Each item for sale also has a background story to it, about the designer and its history.
We like to tell a lot of stories. We’re very picky about what we bring into our assortment, and all have a story to tell. Our design associates in our stores are well versed and we want to share all that with you. That’s easier to do walking you around our space and showing you.
The retailer also offers a 3D rendering service for people coming in with their room dimensions, showing how the products might look in the customer’s room.
But while Design Within Reach is keen to draw people into its stores, it is also looking at ways to get more value from online. Kemp explained:
While brick and mortar is not dead, it’s evolving and if you don’t evolve you’re going to be left behind. Very soon we’re going to do some things to help bring the different channels a little closer together. How do you make that online browsing more part of the in-store experience too. You want to show that you know what’s going on with that customer across their entire life cycle with you. What were they browsing, what did they abandon in their cart, what email messages did they receive. We want all that intelligence so we can help the customer the best we can.
Immersive, intelligent experiences
The company is also considering how it can make use of newer technologies like virtual reality (VR) and artificial intelligence, for example building a room on the fly and seeing the products through a VR experience, or using machine learning to build intelligence in selling. Kemp added:
How exactly machine learning is going to change our experience, we don’t know yet. But what we’re hoping is that it makes much more intelligent suggested selling opportunities, but also help us do things like if someone has an open support case, or you get a response where someone is very unhappy, I don’t want to send you a promotional message right now.
It’s about helping us do best practices around when should we message you, how long should we wait. You don’t buy every week or month, it’s 12- 18 months for most of our customers, so getting that timing right, those are some big ones. Even in the service area, how might I best respond to you and start automating the responses from the support rep.
NetSuite is currently considering how it can build in machine learning to help in these areas, according to Rhodus. He said:
We can start by providing intelligence and then work towards automation. I think machine learning is a great category where there are still a lot of practical applications for it, but which ones are the ones to focus on, is what we’re working through right now. Intelligence in almost everything we do is what we’re working towards.
He added that intelligence will built into the existing platform, and the firm has no plans to build a separate intelligence platform, and that it is looking at making use of Oracle AI technology as well for its own machine learning systems.