Why Physical Retail Will Always Live but Must Adapt: The (blended) shopping experience
Because the future is still physical.
For many brands, 2020 brought the real ‘retail apocalypse’. With social distancing becoming the new normal, this shift in shopping behaviour caused a large number of stores, notably fashion stores and malls, to close either permanently or temporarily (projected 15,000 stores in the US only).
The loss is apocalyptic. It is expected that the impact of lost retail sales for FR, DE and UK combined will be 3.26 billion British pounds.
For big businesses, these numbers are scary, but so was the highly accelerated pace in which consumerism was increasing and new stores or malls were opening every day.
Here are a few examples of apparel companies that closed many of their retail stores in the past months: Converse, Nike, Allbirds, Aldo, Champion, Tommy Hilfiger, Calvin Klein, Ecco, Foot Locker, Gap, Guess, Ralph Lauren, Supreme, Under Armour.
From a sustainable living perspective, less is more. And who knows, maybe we will give a chance to the smaller, local shops to also thrive and afford to rent a space for their developing business.
However, let’s be real! There are many reasons why big brands had such success and why they still will. The main one is simply: capital (human and financial).
So what does the future look like for physical retail stores?
“Retail companies are not built to have their stores closed for extended periods of time, and unfortunately we need to really plan for the worst and hope for the best” Manny Chirico, CEO PVH Corp for CNBC
And there sure is hope. Life will slowly get back on track. As we saw in China when the lockdown was lifted, foot traffic increased as people gradually re-connected with their ‘old-ways’.
In essence, the reason why there is definite hope for physical retail stores is:
WE ARE CREATURES OF EXPERIENCE
Let’s break it down:
It’s so easy to sit on the couch and order food, drinks, cosmetics or clothing. But don’t you miss going out shopping?
And yes, we like convenience … but is that really what we seek every time we shop? I really don’t think it is.
Click, click, click: The online shopping environment doesn’t make for the most amazing customer journey.
While it is great to read reviews, extended product details, and some tips on how to use or wear the product we look at, nothing beats holding the product in your hands. The whole experience of shopping offline is built-in our DNA. Ever since we can remember, people enjoyed the presence of others, the feeling of fabric, or the texture and smell of fruit. And it goes beyond products.
All these are reasons why physical stores will never perish. They will just have to adapt.
Clients became more educated and sophisticated, so stores cannot simply rely on the old ways of operating. We now need the two worlds of online and offline to collide in a perfect shopping experience and that is why blended-shopping is the future.
GlobalData Retail- Managing Director, Neil Saunders told CNBC in an interview: “Most retailers are still operating the same basic store model that they had in the pre-internet era. Shops look and feel tired and do very little to enthuse the customer […] A dearth of investment and an unwillingness to change has meant that visiting an average department store is depressing rather than uplifting.”
So what is blended-shopping?
Brands will still live in physical stores. But simply living is not essential, success is. And success lies in Experience Retail: a symmetric blend between the digital and physical shopping experience.
We want a seamless mixture and an exceptional experience of both worlds:
- High level of service: customer service must be on point in- and out-of-store;
- Personalized shopping: customizable products and product recommendations, fitting rooms that simulate different occasion, or even a tailored dream holiday via IoT and AR;
- No hassle: in paying, shipping and returning;
- Experiencing the product: run in the shoes, drive the car, wear the perfume, try all the colours of that dress, have a short experience of the holiday destination;
That is why the big players will still have the upper-hand. Because all of the above customer needs require high-levels of investment. Without investing and adapting, the numbers of stores closing will increase, leaving the ones who rode the new wave to eat the big piece of the pie.
Take Nike for example. They nailed the blended-shopping experience way before their competition understood what is needed. In their NYC Soho Store, you could find three ‘Basketball Trial Zones’ to feel their sneakers in action, while seeing a projection of NYC courts and getting trained in real-time by a store athlete. Talk about an immersive experience…
Some other examples include:
- Tiffany and Co.: STYLE STUDIO. A dynamic space to inspire and encourage creative interaction and play. It features Tiffany Blue wooden crates displaying new Everyday Objects, a #MakeItTiffany personalisation bar offering self-styling, and a Tiffany fragrance ‘vending machine’
- Virgin: Virgin Holidays. Where holiday starts when guests come into the stores at the enquiry stage. They create a great first impression and start to really immerse clients in that overall holiday experience.
- Jaguar: Immersive 3D In-car Experience. Customers cand build and ‘test’ a personalized model in-store;
- Audi: VR Showroom. Customers can get an extremely realistic experience of their individually configured car, down to the last detail.
- Lush: Next level customer service and overall experience. With on-point store design, where you can try the products and smell the freshness, the staff at Lush is amazing. One of my favourite stores to go to. It feels personal, happy and sincere.
- John Lewis: Experience Augmented Reality. In the John Lewis app, clients can have access to a ‘Try On’ feature which takes them to a live selfie screen where they can test products like lipsticks.
We all look forward to having in-store experiences again.
In the hope that it will soon happen, I urge brands to keep in mind the change in customer behaviour and an optimistic tone for the future. Because the future is still physical.
