Is this the end of the road for physical retail shops? by 0813 studio interior designs Sydney and retail transformation specialist.

We know the conventional discount strategy won't work anymore! There was a time when sales only happened on holidays and end of financial year, now it has become a norm that 20% off sale happens every day and above 50% off is definitely expected during holiday season. I went to this discount floor which was the recent effort from this department store. Every items had been marked down 50% - 70% off and then a further 40% off if purchasing 5 items in one transaction! The problems are: 1) even with this huge discount, the whole trading floor there was only me and no other customer around! 2) yes, indeed I bought 6 items in one transaction, but this was an extremely low margin transaction, only screaming out loud the message that this department just wants to clear the stock.

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Then what works now? 

Let's forget about the traditional retail activity (buying and selling) for a second, as this can be easily replaced by online shopping. The purpose of physical retail shops need to be fundamentally changed. While buying and selling activity will still be a part, the emphasis of human interaction will be predominant; through which attracts customers to have the retail experience that online shopping cannot provide. Take Apple store as an example. Through the years we witness the development of Apple concept stores by combining traditional retail activity with customer interaction space, like experience bench, learning centre and genius bar. Have you even seen an empty Apple store, like ever? All Apple shop assistants are friendly, easy to chat, knowledgeable with their products inside out, happy to have a random conversation. Never have I been encountered with anyone pushing me to buy anything, instead they would just greet and let me lead the conversations, try anything or ask any questions. All in all, for physical shops it is not about the sales any more, it is about increasing foot traffic, lifting customer experience, building up the trust to the brand, products and shop assistants, and 'selling' a better branding image so that customers could relate to the brand and start interaction, come back or later purchase online.