Shopping was all about the corner store—the place who knew you, knew your family, knew your preferences and naturally personalized your experience.

The rise of mass merchants and big-box specialty retailers marked the first industry disruption, where convenience and selection improved exponentially, but we lost the emotional connection that came with shopping at our local community stores.

Amazon, Alibaba, and other digital brands are leading a second disruption of the retail industry, using platforms as a way to launch new services and methods of engagement for their customers. Everything is digitally enabled. Goods can be purchased with a single click. Purchases can be delivered or picked up more quickly and in more ways than ever before. Preferences and history are captured and stored to expedite future engagements. While these advancements continue to advance customer “convenience and selection,” the emotional connection to the corner store grows wider still.

IN THE ADVENT OF RETAIL,

THE CUSTOMER EXPERIENCE WAS INTIMATE AND CONNECTED.

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WITH THEIR CUSTOMERS.

Accenture believes a third wave of retail disruption is upon us—a digital revival of the corner store experience at the scale of large retail—a disruption that will enable merchants, from industry giants to local chains, to create a more

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Before mass merchants commanded retail, shopping options largely comprised of local merchants. Many of us have fond memories of the old-fashioned corner store where we were known by name, and catered to on a personal level. While mass merchants offer the selection and pricing that come with scale, we lost the emotional connection to shopping.

The disruption created by Amazon and others have forced big-box retailers, from Best Buy to PetSmart, to reinvent themselves to survive. More than 35 US retailers filed for bankruptcy protection in the first nine months of 2017, some for the second time.1 And while online shopping has grown exponentially and become increasingly convenient, the customer experience has become largely commoditized. Myriad platforms offer the same selection, pricing, shipping and return policies, creating limited differentiation in the eyes of buyers. If shoppers can easily get what they want, when they want it, their expectations are met.

Yet, in this second wave of disruption, the corner store connection is still missing.

This customer experience void is the catalyst for a third wave of disruption in which retailers can digitally re-create the corner store experience, allowing them to stand apart from their peers. By building a REAL connection with customers, retailers can revolutionize how people shop once again.

THE THIRD WAVE OF RETAIL

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THE CORNER STORE EXPERIENCETechnology now makes it possible to bring the corner store customer experience back to life, everywhere—virtually and physically —in an interconnected, nonstop way. This new version of the corner store experience brings back the intimate human connection these stores once had in a form relevant for the digital age, using the power of technology. The boundaries of the store fall away, and all channels come together for a unique retail experience.

Accenture refers to this next wave of technology-enabled disruption as bringing the REAL back into the retail experience:

The old corner store offered an intimate connection to both people and community. It was a place where customers could feel, talk, connect, share and be heard. Winners will create a real sense of community where customers can find a place to belong.

(R)ELATABLEWith technology (such as augmented and virtual reality), the store of the future will know no bounds and will stretch into consumers’ homes, work and “me time.” The purchase itself will be secondary. Consumers will demand the ability to engage with their favorite brands on their own terms, and the store experience will play the new role of providing a tangible connection with the retailer’s brand.

(E)NGAGINGThe best part of the corner store was how they really knew you. Digital experiences will be increasingly personalized and tailored to the individual by recognizing how each of us plays multiple roles in our daily lives. Artificial intelligence and machine learning are making it possible to see the complete customer, make an authentic connection and do so at scale.

(A)UTHENTICBringing the local corner store feel to a global business is difficult to balance. Local tastes will win over global standardization, requiring modularity and versatility in each retailer’s business model, platform, partner relationships and experience to make the store resonate based on local context.

(L)OCAL

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(R)In the days of the corner store, the shopkeeper and staff knew and welcomed customers personally, saved customers’ favorite items for them, and encouraged customers to linger in the store beyond the purchase. It was a true social experience where customers could see friends and get insight into what those they admired were wearing, buying or doing. Today, one can get in and out of a store or shop online without really connecting or interacting with anyone. There’s so much choice that the customer may not have time to research and decide what she needs or may be unable to find what she really wants among myriad of items not relevant to her.

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“ “

I identify with this unique community and want to belong. They get me.

HOW CAN LEADERS DISRUPT ONCE AGAIN? Everyone has a store that in some way speaks to them—one that is a community they want to be a part of and return to frequently. Some retailers, such as Lululemon or Neiman Marcus, build community very well. Leaders that disrupt the industry by being relatable and building community will view social connection on many levels. They will:

KNOW THEIR COMMUNITYPeople need to relate to a brand on a personal level and be part of the brand’s community if they are to engage with any loyalty. It’s imperative to begin with a deep understanding of who the customer is in the context of their social universe.

RECOGNIZE THEY CAN’T BE EVERYTHING TO EVERYONEIn today’s time-starved society, curation at the granularity of the individual community member will be expected to keep a shopper’s attention. By focusing on categories, products, experiences and services that matter to its community, a brand can meet a member’s needs today, anticipate his next intent and keep him coming back for more.

BUILD REAL SOCIAL CONNECTIONSRather than creating forced or artificial connections, brands can use technology to stay connected to the social networks where their communities are already engaging. By including social influencers as part of the experience, brands can help customers feel confident about their choices, and through technology they can make connections and get feedback from the people they most care about.

PROVIDE A WAY TO BELONGBeyond traditional loyalty methods, brands will strive to find ways to make their community more official. This may be through a forum to learn about the product or share feedback to improve the next version, a class in the store, by highlighting ecosystem partners or by other innovative means. The goal is to provide opportunities for community members to connect with other like-minded members beyond the purchase.

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(E)At the corner store, the experience was confined to a small community, so it was easy to be one-of-a-kind and stay relevant to the brand’s customers, purpose and community. Omni-channel retail drastically expanded the boundaries of the store experience. Digital natives added brick-and-mortar locations, and traditional retailers added digital channels, all in an effort to capture the sale. As a result, the shopping experience can feel disconnected for customers as they have multiple siloed ways of engaging with the same brand. While an item, such as a pair of headphones, may be easily purchased in a single interaction, a more complex purchase, such as a car or laptop, may require a more “hands on” experiential journey across multiple channels. With a lack of persistence across these channels, brands are missing the opportunity to create a truly engaging and purposeful experience for their customers.

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“ “

My experience is great no matter how I engage.

HOW CAN LEADERS DISRUPT ONCE AGAIN? Leaders that disrupt the industry will create an engaging experience everywhere. They will think about the experience holistically and design experiences with customers at the center. They will:

REMEMBER, EXPERIENCE IS KEYLeaders will think about the type of product they are selling, the intersection with their customer or “community,” and the relevant journey or journeys that lead them to purchase. Thoughtfully designing the customer engagement experience across all points of interaction will enrich the buying experience.

REIMAGINE THE STOREThe role of the physical store is no longer primarily about the purchase—it’s anything but. The new store will be all about experience and engaging customers with products and services in tangible ways they can’t yet experience digitally. Staff in the store will be expected to be more knowledgeable, and digital capabilities like self-serve and web-rooming will be incorporated to allow customers to buy via any channel they choose. The endless aisle will be the norm, as will the expectation the brand will “get it to me when and where I want it.”

FIND NEW WAYS TO ENGAGEIn the new omni-channel world, there will be unlimited ways to engage with your favorite brands. Artificial intelligence (AI), extended reality (XR) and the use of digital assistants like Alexa can expand this even further. Generation Z customers will purchase via new channels like YouTube, social media and even photo-based apps. Store employees are even beginning to be encouraged to use technology combined with in-store downtime to keep this connection going after they leave the store via social selling.

BREAK DOWN THE WALLSWhen the customer chooses to engage with a brand, they don’t know or care how the company is organized. They expect a seamless experience. Relative newcomers like Rebecca Minkoff and Warby Parker, with laser focus on the customer experience, have advantages over more mature companies where organization, systems, incentives and old ways of doing business have created walls that must come down. Winners will have platforms flexible enough to support any channel of engagement.

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REIMAGININGTHE NORDSTROM STORE Nordstrom Local, Nordstrom’s new store concept, will be just 2 percent of its typical store square footage. It will offer wine, beer and espresso to shoppers but will have no clothing available for purchase on site. Stylists will help shoppers select and try on sample merchandise and build personal wardrobes, which can be ordered online and delivered to the store the same day. Spa, tailoring and other services will be on-site, in line with the company’s desire to offer its best services in a convenient location to meet customers’ shopping needs. According to Shea Jensen, Nordstrom’s Senior Vice President of Customer Experience, “Finding new ways to engage with customers on their terms is more important to us now than ever.”2

DIGITIZINGBEAUTY WITH SEPHORA Sephora has created a smaller urban footprint of stores with a focus on personalization and experience. They have opened a new store on Boston’s famous Newbury Street that will have products exclusive to the Boston area, along with interactive and immersive beauty experimentation. Their philosophy “Teach, Inspire, Play” drives the design of the store, with digital tools giving their “Beauty Advisors” the information they need to connect and personalize the experience for each customer.3

BUILDINGCOMMUNITY TO CREATE LOYALTY Rapha is a cycling company at heart with a mission to “make road cycling the most popular sport in the world.” They also believe loyalty can be achieved by building community. To that end, they’ve created Clubhouses instead of stores. Here, product sales take a back-seat. The Clubhouse is a meeting place were people, both cyclists and the local community intermix. They offer experiences ranging from watching live cycling events to curated rides for every level as well as localized cafés. Their customers spend time in the store, drinking coffee and eating a croissant after a long-ride, sharing stories with one another and becoming advocates for the sport and their products. Which, in the end, drives sales both in-store and online.

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(A)Corner store shopkeepers had true relationships with their customers. They engaged on a personal level with shoppers, asking about their job, family, hobbies and friends—all the dimensions of life. They knew when their customer would run out of a favorite product, set aside a product the customer forgot to order but needed, and showed the customer what went with her purchase.

At scale, such a real relationship is hard to attain and retailers have used customer segmentation in an effort to become more personal. But it’s hard to fit multidimensional people into a box. Traditional customer segmentation misses the many nuances of the individual, as our persona changes throughout the day (professional, parent, coach, on vacation, at home). Marketing messages come from all sides, and when not all of them are relevant, consumers begin to tune out the noise.

“ “

They really know me and value me as an individual.

HOW CAN LEADERS DISRUPT ONCE AGAIN? Shoppers want to know that retailers value their time. Leaders that disrupt the industry will master the “segment of one” and be seen as genuine and personalized to each customer’s needs, interests and behaviors, even as they change. They will:

PERSONALIZE TO THE INDIVIDUALFor a consumer to connect with a product, service or advertisement, there needs to be something authentic in the message. If it’s not relevant to the consumer personally, he or she will disengage. Big data analytics, AI and machine learning make it possible to use prior consumer engagements to get to a personal understanding of the individual and provide only relevant content. This process then improves over time as consumers interact and share more of their information.

ALWAYS CONSIDER CONTEXTIn addition to knowing who is shopping, it’s also important to understand the context of how they are engaging. How a brand

communicates when the consumer is at home, at work or mobile, or already using the product or not, all matter. Anticipating how the customer is engaging and what she will need next can now be accomplished by taking into account the customer’s own personal patterns of engagement, just like in the old corner store.

BUILD CONTENT WITH SOULThere’s a reason that YouTube ads created by fans are the types of ads that go viral. People recognize an authentic reaction to a product or service versus a slick ad designed to appeal to the masses. Leaders will embrace their customers to understand what they are really experiencing and work to make things real.

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(L)In the old neighborhood store, customers knew the shopkeepers and their families. They knew that the money spent in the local store would stay in the community. Equally, the shopkeeper knew and participated in what was happening around town and was well-versed in the local slang, customs and quirks that made the neighborhood special.

As big-box retailers and digital platform companies grow, they become more and more homogeneous to appeal to more and more people. There is value in consistency, but a person in Seattle, Washington will have very different expectations and different cultural, social and altruistic opportunities than someone from Ames, Iowa. In addition, the customer no longer has visibility to how dollars being spent at the physical store are being reinvested. Is the brand spending in ways and in communities the customer cares about?

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HOW CAN LEADERS DISRUPT ONCE AGAIN? Leaders that disrupt the industry will be “hyper local” while still being global. They will make their global brand as precise and relevant to local context as possible and put their dollars to work in local communities. They will:

BE LOCAL AND GLOBALTechnology is now in a place to tailor the experience to the intersection of who the person is, how she likes to engage and where she is to create a more relevant experience. This requires flexibility in platform, capability and organization to collect local knowledge and incorporate it appropriately into the global brand story. It also requires a strategy that moves beyond channel to interact and adapt to each neighborhood.

BUILD NEW PARTNER RELATIONSHIPSTo reach the level of localization and personalization needed to bring the corner store experience back, brands may have to engage differently with partners. Finding ways to create unique offerings by partnering with

other companies to expand their brand’s reach and influence for mutual benefit will be important to creating the diversity needed to compete.

PUT DOLLARS TO WORKMillennials are beginning to demand an understanding of how their dollars are being used. Businesses such as TOMS and Glassybaby, where a percentage of sales is directed toward making an impact beyond profit, are gaining in popularity. Companies that find a way to contribute in the markets where they do business will find increased loyalty from their customers.

“ “My Golden State Warriors made the playoffs! My local Target had what I needed for the perfect last-minute watch party.

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Technology was at the heart of the last wave of retail disruption with the rise of the platform companies, and it is central to the next disruption wave as well. With one important difference—this time in the background, by enabling retailers to build relatable, engaging, authentic and local connections with customers. If done right, customers should not notice the technology; it’s the experience and brand story that will shine through. This transformation will be more difficult for the traditional retail brands as it will require trade-offs and/or significant investment. To do this pivot, it may require reconsidering your format strategy, prioritizing key customers or offerings, using real-estate to reinvest, and/or finding a partner so you can focus on your core. Those companies that can digitally re-create the corner store experience will turn customer relationships into loyal customer communities with long-term sustainability, and will successfully bring the REAL back into their retail.

THE PATH TO BRING THE

REAL

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REVISIT and calibrate your unique vision to create your positioning in the new, disrupted digital retail world.

ASSESS where your brand stands today vs. your vision and adjust investments made to progress toward your goals.

DETERMINE which pillars (R,E,A,L) are most important to achieving your vision and use technology as an enabler.

PRIORITIZE investments with the most impact on the customer experience, and sequence improvements with the customer impact in mind by staying focused on bringing an emotional corner store connection to life.

ACTIONS TO TAKE

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Accenture, its logo, and High Performance. Delivered. are trademarks of Accenture.

ABOUT ACCENTURE Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 449,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives.Visit us at www.accenture.com.

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AUTHORSANNE HODSONPrincipal Director

MICHELLE MCGLYNNManaging Director

CONTRIBUTORS DAWN ANDERSONManaging Director

RAY MARCIANOManaging Director

KRYSTIN CONLANSenior Manager

NOTES1 “Retail chains filing for bankruptcy protection in 2017,”

The Associated Press, September 19, 2017

2 Andrews, Travis, “Nordstrom’s wild new concept:

A clothing store with no clothes,” The Washington Post,

September 12, 2017

3 http://www.bostonmagazine.com/sponsor-content/

intimate-new-sephora-experience-arrives-newbury-

street/