How New Players will revitalize our Inner Cities
Our inner cities are facing a gradual transformation. Fashion-centered retail stores still dominate the German retail sector with 143 chains, ranking 2nd in an international country comparison. However, this picture will change in the long term and be expanded with new concepts and business models that focus less on pure product sales and more on services. Below are some new approaches and concepts that retailers should be aware of.
Experiences & meet-ups are the new incentives
Covid has left its mark on consumer behavior. According to Zukunftsinstitut GmbH, the crisis has unleashed a deep-seated need for more consciousness and social enjoyment. Consuming for the sake of consuming will fade into the background in the future. There is a stronger desire to meet up with others and pursue common passions and interests. Meeting others and sharing experiences are now the real incentives to visit retail stores.
In New York and London, for example, modern arcades are booming due to the addition of virtual reality technology to their repertoires and were designed so that friends can share VR experiences together. In the “Lip Lab” in Las Vegas, customers can come up with individual lipstick creations in cooperation with others, and soon there could also be concepts where the perfumery and the hospitality industries merge with each other: Visitors can taste a wide variety of flavor and aroma samples at “memory bars” in order to explore the interaction of smell, taste and memory and have their individual mix of taste and smell notes put together and bottled.
Another new trend that focuses on shared experiences is “Hospitality Noir”: Interiors of restaurants are deliberately designed to not be “instagrammable”, e.g. through the use of dimmed light, in order to free themselves from the compulsion of social media omnipresence and concentrate only on the experience.
Space rethought, expanded and upgraded
All in all, it is important to rethink retail spaces and expand the physical space with experiences, instead of placing products on a pedestal, lighting them up dramatically and thus tearing them out of their everyday context. Small extensions such as the integration of co-working space or a catering area expand the sales concept. For example, the furniture brand “Fest” is experimenting with this: In its flagship store in Amsterdam, customers test the furniture in an integrated mini cinema, and in the store in Rotterdam, the co-working zone is equipped with the brand’s chairs. Visitors are invited to work there, try out the seating furniture or even borrow it.
Traditional cinema is an expiring model in times of Netflix. However, if, in addition to the actual cinema film, bright, cozy rooms are offered for exchange with friends, the cinema will again become a hip destination for the younger generation, such as Beta Cinema in Vietnam. What libraries of tomorrow can look like can be seen in the example of New York City’s Stavros Niarchos Foundation Library with catering facilities on the rooftop garden and more separate places for interactive and noisy work.
Upgraded, public space is an enrichment and allows creativity to emerge in everyday places. LEGO’s “Launderette of Dreams” in collaboration with the London designer Yinka Ilori, for example, reinterprets the local laundromat as an interactive and community-oriented playroom for children. An example of upgraded public space is also Nike’s basketball court in the Block 70 recreation center in Belgrade. Renovated using 20,000 sneakers donated by the municipality, the square offers a contemporary space for local athletes.
Outlook & factors for success
The role of physical space has radically changed for retail post-Covid: it must now become a brand ambassador, a location full of experiences or a community destination instead of functioning as a mere sales channel. Sales and “bigger is better” approaches are outdated and are increasingly being replaced by service-oriented concepts. In the end, it is the following factors for success that ensure busy trading floors:
– Meet-ups and creating incentives to visit are essential to remaining relevant.
– Boosters are real Omnichannel due to smooth, digital connections, for example via beacon, near-field communication (NFC) or AR technologies, as well as distributed, local structures.
– Adapted urban planning, which promotes social spaces through more green areas, public places and generally a greater outdoor culture, will also revitalize retail at the same time.
– Here, the key word is Convenience: Cities need to become more rural. Several cities around the world — including Paris, Vienna, Berlin and Hamburg — are already experimenting with the smart city concept of the 15-minute city. Residents are given more time for their lives through decentralized city organization, since everything you need in everyday life can be reached within 15 minutes.
When it comes to the question of how our inner cities can be given a new shine, retail is a decisive factor.
Inner cities and retail are mutually dependent on each other — their attractiveness depends on each other. Encounters in inner cities fertilize the retail sector and vice versa. This should therefore be at the top of the agenda on both sides.
About the author
Mathias Ullrich is Managing Director at LIGANOVA, innovation leader in the field of brand & retail experiences in the phygital area. Over the past ten years, as an industrial engineer, Mathias Ullrich has advised clients from the brand retail sector on positioning, growth and digital transformation. At LIGANOVA, he heads the Experience Solutions division where, at the intersection of people, brands and products, he designs retail locations and experience areas for premium global brands from the luxury, sporting goods, automotive, fashion and retail sectors.
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