The Role of the Physical Store in an Omnichannel Strategy : A qualitative study of Generation Z in the Swedish fashion industry

University essay from Umeå universitet/Företagsekonomi

Abstract: The modern retail landscape is experiencing a continuous change due to digitalization. With the growing number of available channels, consumers' consequent behavior within the fashion retail environment are becoming ever more complex. Which thus poses a challenge for fashion retailers in trying to not only understand them, but how to serve them best. Along this evolution of retail due to digitalization, physical retail stores have closed down due to the increasing competition from e-commerce, although it remains the biggest distribution channel. The role of the physical store is thus experiencing elements of an existential crisis. In this, Generation Z remains an ambiguous consumer segment whose importance will only increase as the generation comes into its purchasing prime. But, Generation Z is not yet well understood as limited research exists on the subject. And as they’re the digital native generation, where retail omnichannel strategies are commonplace, seeking to understand their attitudes, preferences and perceptions of omnichannel retailing, but also the physical store, is thus essential moving into the future. Therefore, the purpose of this study is to distinguish and explore the value of the physical store in the eyes of Generation Z in an omnichannel strategy, within the context of fashion retailing. RQ: What is the role of physical fashion stores within omnichannel strategy, in regard to Generation Z? In order to answer the research question, the method of choice was a qualitative one. The consequent empirical findings were gathered from seven semi-structured interviews, six from Generation Z respondents and one from the CCO of Gina Tricot, yielding a managerial perspective. Thus, allowing for triangulation opportunities. Moreover, besides the empirical findings, we present a proposed framework which illustrates how and why Generation Z’s behavior, preferences and perceptions have ultimately altered the role of physical stores to be one of increasing complementarity within the context of an omnichannel strategy. In describing this evolution, multiple characteristics of Generation Z are distinguished. Finally, this thesis provides a deepened knowledge on how retailers may use their physical store within an omnichannel strategy to better serve Generation Z consumers in order to enhance customer experience and satisfaction. The empirical findings exhibit the physical store as an essential part for consumers within the context of other available channels online. Where multiple aspects otherwise not satisfied through online channels, serve an important purpose for Generation Z consumers. This thesis may thus offer value for retailers in how to balance various appreciated aspects of the physical store, whilst incorporating some of the desired elements of online, to increase the customer experience of physical stores.

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