Endless Aisle and Omnichannel: Rising Satisfaction and Enhanced Profitability

There are plenty of predictions about the future of retail. Some seem overreaching, with images of robots, drones, and grocery baskets dispelling a dystopian future. But while drones and robots may very well become normalized in the next decade, that’s not to say that the future of retail will entirely rely on machines. More than likely, the future of retail will be a combination of the endless aisle and omnichannel strategies blended with advanced technology to provide a seamless customer experience. 

While it’s always a good idea to keep one eye on the future (robots or otherwise), it is also fitting to focus on what is facilitating and elevating customer satisfaction for retailers in the present- consistent, tailored, and synced customer journeys that reduce friction and create a personalized experience for the buyer, a delicate combination of omnichannel and endless aisle experiences. 

In fact, omnichannel is now a baseline consumer expectation. According to a Mckinsey analysis from April 2021, “omnichannel is now a ‘requirement for [retail] survival.” For larger stores, the endless aisle experience is also becoming a baseline consumer expectation. And according to Sailthru’s Retail Personalization Index, the stores that combine endless aisle and omnichannel, using a combination of cross-channel personalization and digital touchpoints that enhance the in-store experience, score high in customer satisfaction and loyalty. 

Let’s dive into how endless aisle and omnichannel work together to boost customer engagement and loyalty and provide retailers with the tools to increase profits.

Lower retail footprints and inventory costs

One might surmise that smaller retailer footprints have begun out of necessity during the COVID-19 pandemic, but in reality, they’ve been decreasing for the last ten years, with the average square footage dropping 4.4% since 2012. 

Given the rise of the endless aisle and omnichannel strategies, retailers have found that they don’t need giant stores with a large footprint to satisfy customer demand. Suppose a retailer embraces the endless aisle concept. In that case, they can stock a smaller inventory of products, keeping costs down in various places, including inventory management and labor costs, without losing or sacrificing sales. 

Among many retailers, Target has embraced small-format stores in addition to its traditional larger stores In fact, 28 of Target’s 32 new stores in 2021 had a small footprint and were placed in urban areas with a denser population or near college campuses. 

Target has also updated many of its locations to include more parking spaces to drive up customers and the front of stores to include more space for buy-online- pick-up in-store purchases (BOPIS). Target’s acquisition of Shipt, a delivery service, has also bolstered its omnichannel strategy in recent years. 

Best Buy’s New “Digital-First” store concept in Moore, North Carolina
Photo by Best Buy

Another retailer launching a smaller footprint is Best Buy- which recently debuted a 5,000-square-foot store in North Carolina. The small-format store has been touted as “digital-first ” and focused on a smaller, intentional selection of products. The store features mobile self-checkout, lockers for 24-hour pick-up orders, and product QR codes for desk pickup, perfectly illustrating how endless aisle and omnichannel can work together to engage customers and promote a frictionless buying experience. 

Meeting customers where they are, fostering loyalty online

Growing segments of the shopping population (Gen Z and Millennials) are known as digital natives.  Having grown up with technology that powers the omnichannel experience, it is a service that most consumers of these generations have to come to expect, especially from larger retailers.

Younger consumers, their lifestyles shaped by influencers on YouTube, Instagram, and other social media platforms, are deeply connected to omnichannel and endless aisle strategies that allow them to share their experiences and purchases on their social media accounts- often tagging brands to appear on store social media feeds. Retailers have embraced the concept- some even incorporate these feeds into their homepages as social proof, further proving customer loyalty from consumers and even deference to the brand.

Target’s now trending section on target.com, and #TargetStyle on target.com

Their preference (and comfort level) around retail is centered more on a digital experience than a human experience, as they have been immersed in a digital world since they were small children. As a result, Gen Z tends to communicate digitally- their worldview molded by what they see and experience online. 

Orchestrated experiences from one channel to another, improving customer loyalty 

Consumers are making digital a crucial part of their omnichannel shopping experience. Today’s consumers, especially younger consumers, expect their online retail experience to sync perfectly across all platforms. Typically shopping online as part of their purchase decision, either before or after they visit a brick-and-mortar store, it has been noted that consumers are more willing to provide personalized information if the experience syncs across multiple channels.  

Suppose a consumer begins researching a product on their phone. In that case, it is expected that favorited items or items in their cart are also available to them on their tablet or desktop. Omnichannel is key here- as it allows consumers to compare and contrast products, conduct product comparisons, examine reviews, and research the various delivery methods available to them. 

Endless aisle and omnichannel retail strategies still allow retailers to capture and deliver on a consumer’s needs which can negate the potential negative impact not having a product in stock can have on a consumer. 

An interactive display at Sephora
Photo from HBS’s Digital Initiative

An excellent example of retailers embracing the endless aisle is Sephora, which, in the last decade, has spent millions investing in augmented reality and AI technology. Available both in-store and online, such technology enables shoppers to virtually try on everything from lipstick to false eyelashes, using images uploaded via camera or by uploading a photo online. These services were crucial during COVID-19 lockdowns when physical stores were closed, and online shopping was the only viable option in most states across America.

Final thoughts 

As the industry continues to evolve amid new technologies and the ongoing pandemic, retailers who intend to compete for consumers’ attention and dollars in the future must begin to embrace endless aisle and omnichannel retail strategies. 

Retail leaders and decision-makers can often be too close to the issue to see possible solutions and opportunities. A retail technology and solutions partner like MINT can help organizations implement endless aisle and omnichannel strategies, integrate existing systems and processes, and design or construct new retail space

For more information, we encourage you to get in touch with our team of dedicated retail experts

August 18, 2022