Will We See a Renaissance of the Store in 2019?

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Credit: Getty Images by Ariel Skelley

By Michael Colaneri, Vice President, Retail, Restaurant Hospitality – AT&T


Many traditional retailers feared the digital age would lead to shoppers abandoning brick-and-mortar stores for online shops. Consumers, however, are not saying “out with the old and in with the new.” Instead, they’re using brick-and-mortar stores as an extension of their digital shopping journey, making the physical store more relevant than ever. Therefore, while the traditional shopping experience is gone, a new era of retail has arrived, forcing businesses to look at digital solutions to enhance customer experiences.

And with consumer incomes and spending up in 2019, retail is bracing for another robust year fueled by this economy. AT&T and Incisiv teamed up to learn what top five strategic shifts retail executives are making to drive the renaissance of the store. Here’s what the survey found:

Related story: 2019 Retail Forecast: The Expansion of Brick-and-Mortar and Flexible Checkout Options

Product Availability

There’s still a large gap between customer expectations and what retailers offer in-store. For example, while nearly 80 percent of millennial and Gen Z consumers believe mobile inventory lookup has a positive impact on their shopper journey, only 34 percent of retailers have invested in this digital in-store technology. That’s why 68 percent of retailers are looking to improve the in-store experience through better merchandising and inventory control.

A retailer’s single view of inventory is the most common challenge. With so many touchpoints for product, omnichannel retailers are challenged to understand true demand. Furthermore, with investments in digital, moving cost-to-carry inventory back out to suppliers becomes increasingly relevant.

Shopper Convenience

Forty-five percent of retailers are planning to change store layout for better execution of omnichannel strategies. With time as their most valuable commodity, customers are looking for their experience to be driven by efficiency, convenience, lifestyle and service. That’s why it’s important for retailers to shift away from the traditional strategy of increasing a customer’s dwell time in-store to drive sales. Creating a layout that resonates with shopper preferences and allows for a trip in and out of the store is the biggest driver of repeat business. This paves the way for consumers to capture as many interests/products as possible in the shortest, most frictionless amount of time.

Likewise, multiple payment methods, self-checkout, mobile cash wrap all become more valuable. While any chain is typically remodeling 5 percent to 10 percent of their stores annually, the new “look” becomes a test to accommodate changing shopper expectations and habits. All solutions are digitally enabled so technology relevance is high.

Immersive Marketing

Fifty-three percent of retailers are looking to improve the store experience through better in-store marketing. To generate sales, digital signage, mobile payments and even loyalty apps need to create a unique user experience to generate a high return on investment. Consumer preference boundaries remain sensitive.  These experiences should always intersect with target demographics, resulting in a clear digital strategy to drive traffic and sales.

And emerging technology is taking center stage, with 70 percent of retailers investing or planning to invest in the Internet of Things (IoT) in 2019, and 40 percent of retailers investing or planning to invest in augmented reality/virtual reality. As the digital and physical worlds blend to create a “phygital” reality, retailers can take advantage of these tools to reach their customers in previously untapped ways.

Customer Insights

Retail without data is inefficient. Data helps retailers operate smarter and more strategically. That’s why 52 percent of retailers plan to enhance customer insights through data aggregation. Knowing what merchandise to carry and who your customers are is critical. Brands need data to fuel their buying and merchandising, as well as the customer experience they develop online and offline. Furthermore, simply getting data feeds can overwhelm the enterprise — the need for integrated data lakes that create true business intelligence is vital.

Operational Readiness

Fifty-one percent of retailers plan to refine store processes to gain better efficiency.

Sales associates are spending most of their time transacting directly with consumers. This makes it necessary to automate operations (e.g., restocking, inventory chasing, providing information on products, etc.). With cost of goods likely the largest expense, the second largest expense for most retailers is labor, and it’s on the rise. The value these associates provide to conversion is vital, however, replacing their hours with more labor to perform back-of-house activities is economically inefficient. Technology, including IoT and other connected capabilities like robotics, become more sound investments with shorter ROI.

The technology-focused solutions don’t stop there. Common investments to solve for these business problems also include Wi-Fi, kiosks and contactless payment. An example is our 5G trial at Magnolia in Waco, Texas, at the Silos. The 5G trial service is distributed through a number of Wi-Fi access points covering the entire grounds of the Silos, and we’ve observed faster wireless speeds not just for visitors, but for employees and vendors who use mobile point-of-sale devices and wireless devices to manage their back-office operations.

Retail vitality is high. Competition is intense. And retailers recognize this — 60 percent are increasing store-level investments by more than 5 percent in 2019. This is the greatest increase since 2007. Retailers have entered a new era. The need for digital experience and consumer preference accommodation is no longer a “nice to have,” but a must. Add to that consumer proficiency with and expectations for digital engagement, and the need to invest in-store and online/offline integration technology is poignant.

Michael Colaneri is vice president, retail, restaurant hospitality, at AT&T, a modern media company that brings together premium content, direct-to-consumer relationships, advertising technology and high-speed networks to deliver a unique customer experience.


The 2018-2019 Retail Technology Report: An Analysis of Trends, Buying Behaviors and Future Opportunities.
This valuable resource offers readers exclusive insights into the retail technology landscape, including current usage, the emerging technologies that retailers are most interested in and believe will have the biggest impact on their businesses, how retailers are purchasing technology, and much more.