ideas |
08.09.2021

Physical retail: definitely different but not dead

By Niamh Higgins

Desire for ‘real’

As retailers, either fully immersed in online, dipping your toe in, or simply not sure what to do next, it’s hard to get away from terms like omnichannel and omnipresence. Does this mean losing sight of physical retail and shifting focus and budgets completely to the advancement of other channels? Despite the fact that most customer journeys start online for product discovery or through social channels seeking inspiration, there will always be a huge desire for people to experience brands in real life.

Amazon and other online retailers are in essence, logistics companies that have become today’s consumer interface to deliver goods to your door within hours. Convenient? Yes. Memorable? Not exactly. Meaningful? That’s debatable. Does online build deep emotional connection? Nothing like a physical experience or interaction can. So, what comes next for retail in this era where omnipresence is the expectation?

We seek connection

Humans have an inherent desire to come together and connect in social settings. The emergent consumer, marred by pandemic burn-out actively searches for emotional connection, balance, and deeper meaning in their lives. Yes, the rules of retail are changing, but the human needs and desires of consumers that we strive to fulfil are not entirely. Digitally led consumers or not, we are ready to get out there, experience, and make memories.

Interestingly, Amazon continues to pledge significant investments in trying to get closer to the customer and narrow that last mile delivery window. With recent whispers alluding to investment in a department store experience. Should this be true, on the back of Amazon Go stores and their Whole Food Markets acquisition - is the future of Amazon more physical? As published in Retail Times, Q3 2021.

Axel Argiato
Foxtrot

UEO (Unique Experience Opportunity)

Not confined to the behemoth that Amazon is, other digitally native e-tailers are capitalising in a bricks and mortar footprint to connect with their tribes. Take Swedish footwear brand, Axel Arigato’s latest store in Paris. Forgoing a sales counter to give customers an experience more akin to a gallery visit than a bustling retail environment. Using their physical stores to host events for their social community, they see their stores as ‘social connectors’. Disrupting the typical retail model, the spaces are designed to forge real connections through unique experiences.

From the ‘museumification’ of retail to a new wave of convenience store innovators - Foxtrot in the US. A chain of delivery focused convenience stores and cafés. First introduced to customers as online only, they soon realised the pivotal role the physical store plays within neighbourhoods. As much a local neighbourhood living space as it is a food store, each aspect of the in-store retail experience is powered by the retailer’s digital app. Enabling a truly omnichannel relationship with its customers.

‘Retailtainment’

With expectations higher than ever, experiential shopping remains a strong trend heading into the future. Clearly, what separates the innovators and the remarkable from others is evolving. And that the role of physical stores is becoming much more hybrid in nature and linked intrinsically to digital efforts. Experience stores that offer spaces where customers can browse, learn, be inspired, and even have fun.

Three Ireland has reinvigorated their physical space launching their new cashless, connected lifestyle experience stores. In June, Lego unveiled it’s first of a kind combined digital and physical shopper experience in New York. A ‘retailtainment’ store concept. Using technology to brings walls, floors, and ceilings to life with sensory elements for a truly interactive build and play experience.

If online originals are realising that a physical presence is key to building deeper connection and in turn loyalty, surely the retail apocalypse narrative is nonsense. Physical retail is not dead; however, it will definitely be different. Retailers who go beyond thinking about the products or services they sell, adding in layers of discovery, surprise and delight will ensure that they will get ahead of, if not remain in the game.

Lego

‘Retailtainment’

With expectations higher than ever, experiential shopping remains a strong trend heading into the future. Clearly, what separates the innovators and the remarkable from others is evolving. And that the role of physical stores is becoming much more hybrid in nature and linked intrinsically to digital efforts. Experience stores that offer spaces where customers can browse, learn, be inspired, and even have fun.

Three Ireland has reinvigorated their physical space launching their new cashless, connected lifestyle experience stores. In June, Lego unveiled it’s first of a kind combined digital and physical shopper experience in New York. A ‘retailtainment’ store concept. Using technology to brings walls, floors, and ceilings to life with sensory elements for a truly interactive build and play experience.

If online originals are realising that a physical presence is key to building deeper connection and in turn loyalty, surely the retail apocalypse narrative is nonsense. Physical retail is not dead; however, it will definitely be different. Retailers who go beyond thinking about the products or services they sell, adding in layers of discovery, surprise and delight will ensure that they will get ahead of, if not remain in the game.

Niamh Higgins is the Managing Director of TapCreative.

She specialises in strategy, insights and consumer behaviour.

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