Published May 5, 2017 on Retail TouchPoints.

In gearing up for the opening of the Amazon Go stores, we heard about their delayed opening due to slight technology snafus. While there was a big deal made around the delays, these stores are paving the future of brick-and-mortar shopping. Amazon uses computer vision, deep learning algorithms and sensor fusion — similar to the technology used in self-driving cars — to create what they call “grab and go technology.” In order for the brick-and-mortar shopping experience to remain relevant, retailers will have to take a page from Amazon’s book and implement a data-driven store model foundation.

The in-store experience is becoming less and less relevant because of digital shopping. CNBC recently reported that the number of retailers filing for Chapter 11 bankruptcy protection is headed toward its highest annual tally since the Great Recession. There are obvious perks of the online shopping experience that you just can’t get inside of a mall — including convenience, speed and privacy. You can click around on your laptop in the comforts of your home and — boom — you’ve ordered a new wardrobe, or maybe even groceries for the week. What is motivating you to get in your car, battle traffic and navigate a mall/store parking lot?

Fear not. A recent survey from IBM and the National Retail Federation found that the majority (67%) of Generation Z shoppers prefer a brick-and-mortar shopping experience. So, in order to keep Generation Z shoppers coming to stores and making purchases, retailers will have to adapt to meet their high expectations in regard to technology and personalization.

Retailers must get smarter about their physical store locations, store layout, and product offerings. This will ultimately look like less physical floor space, savvier design (look at Target’s floor plans catered specifically toward Millennials) and possibly less collateral, with a much stronger emphasis on personalization.

What do I mean by personalization? Right now when you shop online at Amazon you are often prompted with “If you liked this, you might also like this.” Retailers must incorporate this kind of intel in stores to tailor the experience to meet individual shoppers needs.

Online retailers succeed because they have better data to understand their customers through tracking their experience. The only way for brick-and-mortar stores to achieve a complete personalized experience for shoppers is by implementing a data-driven store model — one that leverages location data, sensory technology and analytics to track the shoppers’ in-store behavior.

Location data allows retailers to develop a deeper understanding of how their customers navigate stores and choose products — and ultimately — make more informed decisions that will lead to greater success. Retailers can then leverage this information to alter their store design and figure out the best areas to place specific products, and when and where to implement marketing tactics like mobile push notifications or sale signage. Retail property owners can leverage this same kind of location data to figure out how spaces and obstructions change footfall and how a building space can be optimized to generate more revenue, provide better safety and improve the overall visitor experience.

We live in a data-driven world. In order for retail brands to remain relevant and in business, they will need to start thinking like Amazon and implement smarter technology, make more data-driven decisions and place a bigger focus on the personalized customer experience.