Future Of Retail May Involve Personalized Shopping

This week we are exploring the evolution of the American shopping experience. In the third installment in this series, Audie Cornish speaks with retail architect M.J. Munsell and retail consultant Bob Hetu about what shopping in the future will be like.

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AUDIE CORNISH, HOST:

Now one final time, we'll borrow the words of Ebenezer Scrooge to introduce a series of conversations we've been having.

(SOUNDBITE OF MOVIE, A CHRISTMAS CAROL)

GEORGE C. SCOTT: (as Ebenezer Scrooge) I will live in the past, present, and the future. The spirits of all three shall strive within me. I will not shut out the lessons that they teach.

CORNISH: This week, we've been talking about the past, present and future of retail. In the midst of the holiday shopping season, we've heard about the early days of the department store and how today's brick-and-mortar stores are adapting as online shopping becomes the norm.

Now to the future. We're going to begin with M.J. Munsell. She is a retail architect. And in her job, she envisions the stores of the future. Welcome to the program, M.J.

M.J. MUNSELL: Thank you. It's great to be here.

CORNISH: So to begin, imagine we're walking into some particular store of the future. Give us an example of something that we're getting a glimmer of that we expect to see there.

MUNSELL: I think some of us may have experienced stores where you can customize your environment, and we're seeing this primarily in dressing rooms now. A few stores - Burberry, C. Wonder in New York, Nordstrom - has experimented with dressing rooms that the customer can actually tailor themselves. You can go into a, basically a booth somewhat like what I'm in right now, a sound-controlled environment where you can either plug in your iPad, your iPhone for your own music, you can adjust the light levels and have your own personal oasis.

So you can imagine if you take that to an entire store. And I am someone that is feeling like I'm very rushed, so I can go into an environment that's more calm. We can digitally, I think, start to influence what that store looks like on a daily and even hourly basis - it's a technique that Las Vegas has used for many years.

CORNISH: And you said an hourly basis so...

(LAUGHTER)

CORNISH: ...this makes it sound like, you know, that scene in "The Wiz," that song and they say the color of the moment is green or blue, and like the entire environment changes its color. I mean, is that what could happen here?

MUNSELL: There's an opportunity to, you know, change all the surfaces through technology that quickly. It could even be minute by minute, you know, where you could change the entire decor of a store and basically all surfaces would become a digital screen, including the floor. And with that would be the lighting, the feeling. It could go from a fairly traditional environment to, you know, more of a clean, pristine environment.

All those things keep us interested in coming back and enjoying the experience.

CORNISH: M.J. Munsell is a retail architect with the firm Callison in Seattle. M.J., thank you for speaking with us.

MUNSELL: Thank you.

CORNISH: So we've had a tour through the store of the future. But what will our shopping experience look like in the future? Those are the kind of decisions Bob Hetu makes as a retail consultant. He works with major retailers as they look into the future.

Hi there, Bob.

BOB HETU: Hello, Audie.

CORNISH: So we've just heard about this brave new world of, you know, digital dressing rooms and hyper-customized shopping experience when we go into physical stores of the future. But what is the sort of thing that you're telling retails would be a good investment to help build the shopping experience?

HETU: Well, we're really focused on something that I refer to as either back to the future of retail. You know, one of the things that we're talking a lot with retailers about today is the idea of personalization; the idea that we understand you as a consumer and we can present to you products that will really appeal directly to you, at a price that makes sense - promotional activity that makes sense - for you as an individual.

CORNISH: So I have to assume that this is a ramping up of all that data they're collecting on us these days, right? In the future, they'll know what dress I want before I step in the store?

HETU: Yeah, ideally it is. You know, retailers for a long time have had what we call big data, which is, you know, just a huge amount of information available to them. But now it's gotten significantly more complicated because when you think about it, they have, you know, additional, you know, social media activity, you know, varieties of loyalty program data.

And now they're putting together both that structured point-of-sale information, which is what you bought, when, with some of those unstructured things that are about you as a person, in order to help develop a better customized assortment of products for you.

CORNISH: So what's the role of the store in that?

HETU: Well, the store is still very, very important. We're still forecasting store to be above 80 percent of sales still, at least through 2015 into 2016. And, you know, the future of it looks like we're going to see where people have registered online; maybe their cell phone number is part of the loyalty program. And they may be aware that you have pulled into the parking lot, or you've entered the door, and they might be able to greet you by name.

They may be able to offer you, you know, the ability to view certain products that they know - based on your past buying experience - are things you might like to have.

CORNISH: Now, Bob, you said that this is a consumer-oriented experience. But it also sounds a little bit creepy...

(LAUGHTER)

CORNISH: ...for these companies to have this much information and to use it in this way.

HETU: Yeah, you know, retailers have to be careful because there is this creep factor that we talk about. It's very important that the retailers earn the trust of the individuals. And one of the things that our research shows is that consumers right now don't have a high trust level with retailers. However, our research also shows that when you start to simply give them the opportunity to get some better pricing and discounts, or better service, consumers tend to get over that privacy issue relatively quickly.

CORNISH: Well, Bob Hetu, thank you so much for speaking with me.

HETU: You're welcome. Thank you.

CORNISH: Bob Hetu of Gartner Incorporated helps major retailers plan out their futures.

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