Expert interview with Martin Goertz – Touch, trust, transformation

Alex: Hello Martin, I am very much looking forward to our conversation today. Shopping experiences are somewhat of a passion of mine. Could you briefly introduce yourself?

Martin: I am Martin Goertz and Sales Manager at Sigma System Audio-Visuell. Media technology in connection with retail has actually been a part of my professional career for a very long time.
 

Alex: Brick-and-mortar retail has had a tough time in recent years. What are the biggest changes you've seen in customer shopping behaviour, especially in Germany?

Martin: Consumer behaviour has changed significantly in recent years. More and more customers are shopping online – because it's convenient, offers greater choice and is always available. This is leading to a decline in footfall in many city centres and shopping centres. At the same time, customers now expect more from brick-and-mortar retailers: personal advice, product experiences and a special atmosphere. Purchases are planned more consciously; spontaneous visits to shops are declining. The coronavirus pandemic has accelerated this trend and established new habits. In Germany in particular, customers now use both channels flexibly, but spontaneous visits to shops have become less frequent overall.
 

Alex: Can you elaborate a little more on the reasons why spontaneous visits to shops have become less frequent?

Martin: There are several reasons for this. One of the main reasons is certainly the convenience of online shopping. You can order products from home or on the go without having to worry about opening hours or making a trip to the city centre. This saves time and often money, as you can quickly compare prices online and find bargains. In addition, many customers are getting used to the convenience of having goods delivered to their door, including easy return options.
 

Secondly, online retailers have massively expanded their product range and customer experience in recent years. There are online providers for almost every product, often with a larger selection than in local shops. Customers can also find niche products online that may not be available in local shops. So if consumers know that they are guaranteed to find what they are looking for online, they think twice about going to several shops to find it.
 

Alex: What determines whether a customer buys a product in a shop or online?

Martin: Several factors play a role in whether someone buys online or offline. One factor is certainly the price. Online, you can compare prices and immediately see where a product is cheaper. If the price difference is significant, many people tend to order online.
 

Another factor is the tactile experience. Especially when it comes to clothing, furniture or other products that you want to touch, try on or test out, many customers prefer to go to a shop. They want to see how the fabric feels, whether the shoes fit or how the colour looks in real life. This physical experience cannot be completely replaced online (despite good photos or videos). Advice and trust also play a role: when it comes to complex or expensive products – such as electronics, high-quality kitchens or insurance – many consumers value personal advice from experts. If they know that there is a knowledgeable salesperson in the shop, they are more likely to be persuaded to buy there. Although many people also gather information online (customers read reviews, tests, etc.), expert advice in a face-to-face conversation can be an important purchasing incentive.
 

Ultimately, it depends on the customer's assessment: what is more important to them in the specific situation? When it comes to convenience and price, online often wins. When it comes to experience, immediate availability or trust, brick-and-mortar retail has advantages. However, hybrid models are becoming increasingly common – many people gather information online and then buy in-store (ROPO: research online, purchase offline) or vice versa. Retailers must therefore adjust as many of these parameters as possible (price, service, experience, availability) in order to win customers over to their own channel.

Alex: What must brick-and-mortar retailers do to attract more customers back to their stores?

Martin: Brick-and-mortar retailers must give customers a good reason to visit – in other words, they must offer clear added value compared to online shopping. First of all, the shopping experience should be made more attractive. Retailers can turn a visit to the store into an experience by offering an appealing store design, trained and friendly staff, and special promotions or events. Many customers are more likely to come if they expect something special, whether it's a product demonstration, a small tasting, an exclusive in-store promotion, or simply a pleasant atmosphere that makes browsing fun. A key word here is ‘retailtainment’ – entertainment in the retail sector. If the shop offers more than just shelves, such as a cosy seating area, music or perhaps a coffee, customers feel more comfortable and stay longer. This increases the chance that they will buy something.

Alex: What role does the linking of online and offline channels (keyword: omnichannel) play in these strategies?
 

Martin: A very big role – omnichannel is virtually a must today. Customers no longer think in categories such as ‘now I'm buying online’ or ‘now I'm buying offline’. They expect retailers to offer both and to be able to choose depending on the situation. Seamless integration of channels means that the transition between online shop, mobile app and physical store should be fluid. In practical terms, this means, for example, that a customer can see what is in stock in the shop online and reserve it or order it via click & collect. Conversely, it should be possible to access the online range via tablet or kiosk in the shop – in other words, a shelf extension so that no customer wish remains unfulfilled simply because space in the shop is limited.
 

Services such as ordering online and returning in-store (and vice versa) are also part of this. Many customers appreciate being able to simply exchange goods purchased online at their nearest store if there are any problems. This increases the likelihood that they will order in the first place, as the risk is lower. Omnichannel also means that customer accounts or loyalty programmes work across all channels: customers should be able to use their points or personalised offers both online and in-store. For example, if a customer adds something to their shopping basket online and then comes to the shop, the sales assistant could theoretically access it and seamlessly continue to help them – this kind of thing is impressive because it shows that the shop knows me and my needs.
 

In Germany, many retailers have invested heavily in omnichannel in recent years because it has become clear that channel silos are no longer appropriate. The brick-and-mortar store is becoming stronger, not weaker, through integration with digital channels: it is becoming a hub in a network of touchpoints. I think retailers who intelligently connect online and offline create a consistent overall experience. The result is satisfied customers who can use the most convenient method for them – and in the end, the revenue stays with the same company. Omnichannel is therefore not just technology, but a strategic approach to engaging customers on all fronts and retaining their loyalty.
 

Alex: How do shopfitting and store design need to adapt to create an appealing customer experience?

Martin: Store design plays an immense role in the shopping experience. Today's stores have to offer more than just product presentation – they should convey atmosphere and emotion. Interior designers and shopfitters are challenged to create spaces where customers feel comfortable and enjoy spending time. This includes a well-thought-out ambience: appealing design, colours and materials that fit the brand, pleasant lighting, appropriate music and even scents can be used to create a certain mood. All these elements appeal to the senses. Some retailers also integrate lounge areas or cafés into their stores where customers can relax or have a drink. Such offerings extend the length of stay and make the visit more relaxed.
 

Flexibility in store design is also important. The retail world is changing rapidly, and retail spaces should be adaptable.

The combination of digital and physical in design. Digital elements – such as screens, projections or tablets – should be seamlessly integrated into the store image. Nothing looks worse than a modern touchscreen hanging in an otherwise inappropriate place like a foreign object. Good shopfitters plan such digital touchpoints from the outset: for example, as part of the product shelves or integrated into the shop window design. A well-thought-out design can take customers on a journey, surprise and inspire them.
 

Overall, the store design of the future will be very customer-centric: it should convey the brand world, invite customers to linger and appeal to all the senses without making the actual shopping experience more difficult. For shopfitters, this means combining creativity with functionality.

Alex: Speaking of technology, how can digital touchpoints such as interactive displays or digital information stations in stores improve the shopping process?
 

Martin: Digital touchpoints in stores can bridge the gap between online and offline and offer customers many advantages. Interactive displays or kiosk systems enable customers to take action themselves. They can browse the product range via a touchscreen, search for specific products or view details that may not be visible on the shelf. Take a fashion store, for example: customers can use a display to see which sizes or colours of an item are in stock without having to search through every item. Or they can ask for suggestions for items that go well with a particular garment (‘This might go well with that...’), which may be displayed on a mannequin in the store but can be offered in even more variety digitally. In electronics stores, touch terminals offer the possibility of comparing products or reading customer reviews, similar to what you would do online. This gives customers the same wealth of information in the store as they would have when shopping online, which builds confidence in their purchasing decision and reduces uncertainty.
 

Large video walls or screens can also attract attention and showcase products in an emotional way – for example, by showing lifestyle videos, current collections or mood images that match the product range. Operated as so-called retail media, such digital surfaces can even display targeted marketing messages at the point of sale to trigger spontaneous buying impulses. All this makes shopping more interactive and informative. Customers feel entertained, well informed and ultimately more confident in their decisions.

Alex: What about technologies such as smartphone apps or augmented reality in stores? Do such tools offer real added value or are they just gimmicks?

Martin: Augmented reality (AR) is still a relatively new playing field in retail, but it offers exciting possibilities when used appropriately. AR can virtually enhance the physical shopping experience. A well-known example is the furniture industry: using a smartphone app, AR can be used to display a virtual image of a piece of furniture in your own living room to see if it fits in terms of size and style – this works at home, but also in the furniture store itself to visualise different variants. In brick-and-mortar shops, customers could point their mobile phones at a product and see additional content, such as animated 3D models, assembly instructions or ideas for use. In fashion retail, there are ‘virtual mirrors’ or AR features that allow you to see different colours of an item of clothing on yourself without having to physically try everything on. This sounds futuristic and can be fun, especially for a tech-savvy younger clientele.

So far, AR applications in stores are still more of a gimmick and are used selectively, but I think that can change with better technology. If AR offers customers real added value – be it information, entertainment or security when making a selection – then it will prevail. All in all, AR can enrich the shopping experience, but it should be used specifically where it improves the experience. Otherwise, it's better to stick with traditional methods instead of trying to introduce high-tech solutions that no one will use in the end.

Nevertheless, sales remain the ultimate goal, of course – it's just that the path to get there may be shifting.
 

Alex: Are there already successful concepts that effectively combine brick-and-mortar retail and digital technologies? Do you have a few examples?

Martin: Yes, in fashion retail, a lingerie chain is testing smart changing rooms where customers can use a touchscreen to request different sizes or items without having to get dressed again and leave the changing room. The first fashion brands are turning to ‘Magic Mirror’ – a digital mirror that displays additional colour options or possible combinations in the mirror while you try things on. This attracts curious customers and combines traditional trying on with a playful, digital element.
 

Retailers are experimenting with RFID chips: for example, when a mobile phone camera was placed on a special table, a video with product information and comparison data automatically appeared on a screen. This combines haptic testing with digital information.

Alex: Do these developments apply equally to all retail sectors? Or do you see differences between a fashion store, a supermarket and, for example, an electronics retailer?

Martin: Basically, all industries are feeling the change in customer behaviour, but the reactions and priorities differ considerably. However, the basic trend – towards more service, more experience and digital support – is evident everywhere. But the implementation varies depending on the product range and customer expectations. Every sector is finding different ways to remain attractive. It is important that retailers know their target group well: a luxury fashion label will have to present itself differently than a discount supermarket. Those who set the right tone for their industry will continue to be successful in brick-and-mortar retail in the future.

Alex: What should retailers pay attention to in order to avoid mistakes when digitising their businesses or improving the shopping experience?
 

Martin: When digitising and enhancing the shopping experience, there are a few pitfalls that retailers should avoid. A common mistake is to use technology for technology's sake. It's not enough to simply hang up a few screens or launch a fancy app just to appear ‘digital’. Every new media technology or elaborate retail media concept in the store should serve a clear purpose for the customer. For example, if you install an interactive terminal that ultimately only displays the retailer's website, it doesn't help the customer – they didn't need to come to the store for that. Unfortunately, you see these kinds of misguided investments all the time: expensive gadgets that remain unused because they don't offer any real added value.

It's also important to keep customer diversity in mind. Not all customers are digital natives, and that's okay. The trick is to make digital offerings optional and intuitive rather than forcing them on customers.

And finally: realistic expectations and patience. Not every innovation will be an immediate success. It's important to learn from customer feedback and make improvements where necessary. Sometimes it just takes a little time for customers to accept new services.
 

Alex: What do you think about the buzzword ‘retail media’?

Martin: Used correctly, retail media not only makes shopping more informative, but also more enjoyable – creating a win-win situation for brands, retailers and consumers.

The shopping experience for customers becomes entertainment. Relevant, visually appealing content provides orientation, inspiration and interaction. Examples of how this can be implemented range from digital screens with changing offers and interactive kiosks with product information to AR applications. The key thing is that the content fits the store concept, the brand and the target group and offers real added value for customers. I am convinced that media agencies and brands will continue to entertain us with creative retail media campaigns in the future.
 

Alex: Martin, how do you see brick-and-mortar retail in five to ten years? Will it still exist in its current form, or do you expect fundamental changes?

Martin: I am convinced that brick-and-mortar retail will still exist in five to ten years – but not in its current form. We will probably have fewer stores, and those that remain will be more distinctive. The classic run-of-the-mill shops that simply offer products without any special features will struggle or disappear. Instead, experience and advice centres will dominate. Many retailers will increasingly use their shops as showrooms or brand worlds.

This means that the shop will present the brand and the products in a way that is not possible online – with hands-on experience, trying things out and personal interaction. The actual purchase can then be made flexibly. Perhaps the customer will take the goods with them straight away, perhaps they will have them delivered, perhaps they will order them online later – all of this will merge into one. Routine purchases, i.e. everyday items or standardised products, will probably be handled even more online because it is simply more efficient. For advice, inspiration and community experiences, on the other hand, people will go to the shop specifically.
 

Technologically, much of what seems new today will have become normal in five to ten years. We may also see more augmented reality in everyday use as the technology matures – for example, via smart glasses or very user-friendly mobile phone applications. Stores could also become more multifunctional: a shop is a sales area during the day and an event venue in the evening.
 

Overall, I would say that brick-and-mortar retail will reinvent itself, but it won't disappear. The boundaries between channels will continue to blur. Retailers who recognise this early on are already restructuring their business models – moving away from ‘just selling products’ to ‘offering experiences and solutions’. In five to ten years, we will see the results of this transformation.
 

Alex: If you could give retailers one piece of advice, what would it be? What is the most important factor for success in brick-and-mortar retail in the future?

Martin: In a nutshell: put the customer, i.e. the person, at the centre of everything you do. If you want to be successful in brick-and-mortar retail, you have to consistently focus on the wishes and needs of your customers. That sounds obvious, but it is sometimes forgotten in day-to-day business. Whether that means outstanding service, a unique shop design, special events or modern technical aids – customers must feel the added value. 100% WELCOME

Alex: Finally, a personal question. Where do you prefer to shop? Online or offline?

Martin: I love being able to shop in a great store. I'm team brick-and-mortar, no doubt about it!