A Lesson Learned from Movie Theaters

popcorn-movie-730x280.jpgWhen Netflix and On-Demand killed the video rental store, a lot of people assumed that the movie theater was next. At the time, the prevailing thought was that as digital rental services became more and more commonplace, most consumers would opt for the comforts of home over crowed, oft-dirty theaters. Even Fox News once went so far as to call 2005 the “death knell for movie theaters.”

But it never happened. Movie theaters changed with the times. They revamped seating, offered more premium and healthy food over the standard popcorn fare, and began investing in new technologies that would differentiate themselves from standard, “run of the mill” home entertainment systems, such as IMAX, 3D, and Dolby Surround sound systems. They enhanced the consumer experience enough to entice customers away from the couch and to a brick-and-mortar location. And they thrived.

I bring this up because the sort of disruptive technology that video on-demand brought to the movie industry is similar to what e-commerce is currently doing to brick-and-mortar retailers. And Tech Crunch agrees.

In an article published last week entitled “Rebuilding retail brick by brick”, author Mike Hsieh wrote, “Brick-and-mortar retail stores are facing the same challenges from the digital revolution. There is little technology or innovation in-store to make it a more compelling experience over purchasing something online. It is equivalent to an old-style movie theater on Main Street: The screen is small, the sound system is old, the seats are hard and only popcorn is available at the concession stand. On top of that, there is no parking lot. Why would anyone go to that theater if it doesn’t provide an immersive experience that a home system cannot?”

He continued, explaining how retailers can adapt, “Retailers need to understand the benefits of the in-store experience to a consumer. At its core are discovery, trial and instant gratification. Retail stores need to delight the customer by suggesting merchandise options that are unexpected yet appropriate once the consumer enters the store. This means utilizing data collected about the customer online, offline and mobile, including past searches, purchases and abandoned carts… A seamless and magical in-store shopping experience can only be accomplished with greater investments in technology and data.”

In other words, retail analytics can instill the same change for brick-and-mortar stores that a revamped theater experience did for the entertainment industry.

Really what it all boils down to is brick-and-mortar stores need to enhance the customer experience. And while for movie theaters that can come as easily as offering more food than popcorn at the concession stand, for brick-and-mortar retailers it can only be achieved through retail analytics. With data in-hand, retailers can better understand their customers, and in turn, create a more immersive and inviting shopping experience.

It’s what the most successful stores of the future are doing and Tech Crunch said it best: 

“Close to 90 percent of purchases still occur in-store, although e-commerce and mobile commerce are growing at an accelerated rate. Rather than retreating, retailers should learn from the entertainment [industry]… to push technology and data analytics into the stores to enhance the benefits of shopping in a physical environment. Consumers should be delighted by new discoveries of products, instant trial and immediate gratification of bringing it home. These are key benefits that [e-commerce] cannot replicate.”


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Topics: retail analytics, e-commerce, in-store assortment

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