Bringing new technology into retail can be costly, for both young brands testing physical retail for the first time and more established retailers. On Sept. 26, McKinsey & Company opened a retail concept space in the Mall of America to help brands learn what technology could improve their in-store shopping experience.
Kendra Scott, ThirdLove, Elevé Cosmetics and Type:A Deodorant have opened mini pop-ups inside McKinsey & Company’s 4,700-square-foot space, dubbed the Modern Retail Collective, set to remain open for the next 12-18 months. While tech companies involved are paying to have their latest products incorporated on the sales floor, brands don’t pay to participate and keep all sales they make. The only fee brands are paying comes when they first move in, for any specific fixtures or branding added.
It feels like some of the new-wave department stores of today — think Showfields and Bulletin. Every three to four months, McKinsey and Mall of America plan to bring in a new set of brands. At the same time, a new group of tech partners will come in, as well. Currently, the space has everything from smart mirrors equipped with fit-predictor software to cut down on time customers spend inside a fitting room, to a cryptocurrency-enabled checkout system.
The idea is to design each new iteration around a specific theme, chosen by the McKinsey team based on a concept they are looking to better understand. This first is around understanding how customers find products in stores.
“Should it be successful, the benefits of this approach mean better research and insights into what consumers really want in their shopping experiences,” said Dave Meeker, chief innovation officer at ad agency Isobar U.S. “This will help provide a better understanding on what the customers really want. That’s critical in a world where our motivation to get out and about and choose in-person experiences over e-commerce continues to wane.
For a brand like ThirdLove, which just opened its first physical retail space in July, setting up shop in the Modern Retail Collective gives the brand a unique opportunity to learn about new retail-specific technology without making a huge investment in its own store.
“It will provide us with insights and learnings on new in-store technologies that can enhance the customer experience in exciting ways,” said Heidi Zak, co-founder and co-CEO of ThirdLove. “This will help us learn even more about our customers and deliver an even better fit experience in the future for women both online and in-store.”
ThirdLove has incorporated in the store its signature Fit Finder quiz, designed to help women find the perfect fitting bra. Customers can take the quiz via an iPad or kiosk. McKinsey will be able to track how many customers take the test and how many completed tests lead to a purchase, and then share that data with the brand.
There are also interactive mobile hotspots located throughout the store, designed to provide more information to customers about specific products. When customers tap their phones against a hotspot, without downloading any app or opening a web browser, the technology takes them to that product on the brand’s website. They can also add to a virtual basket through the hotspot and check out, all through mobile.
For its part, Kendra Scott is bringing its color bar into the Modern Retail Collective in the hopes of learning to elevate the experience through technology. Kendra Scott features the color bar, which allows customers to design their own custom jewelry, in its 100-plus retail locations and its e-commerce site. Inside McKinsey’s store, all of the stones customers can pick for their pieces are RFID activated.
“When you pick up a stone, it comes up on the screen and shows you all the ways you can configure that stone in different pieces of jewelry. You can design the whole thing there and order a custom piece to be sent to you, all using AR and RFID technology,” said Tiffany Burns, a partner at McKinsey & Company.
The space isn’t designed to show off the latest tech to customers or act as a showroom floor for tech but rather to give brands, technology providers and McKinsey a better understanding of how customers interact with emerging technologies — what works well in a retail environment and what doesn’t. McKinsey plans to share all the insights it gathers from each brand with the brand itself, and then plans to share larger themes and findings with the retail industry at large, publishing perspectives on the technology on the company’s website.
“There is a lot of opportunity to improve the retail experience, but it’s complicated because customer expectations change rapidly and technology is evolving so quickly. It’s very hard for most retailers to keep up and understand what [technology] makes sense for their store formats,” said Burns.
