What’s in store (for the store)

Neil Redding
Jun 10 · 9 min read

The near future of retail will feature physical stores that are much more enjoyable to be in, while also being way more efficient at being places to buy what we want and need. The personalization of spatial experience is unfolding now.

The near future will accelerate the trends we already see happening in retail — and yet the physical store is not going anywhere anytime soon, proclamations of a retail apocalypse notwithstanding.

In fact, shopping in physical retail spaces is going to get a whole lot better — because it has to. Now that nearly everything we shop for can be delivered super quickly — most things in a single day, and many things same-day in urban areas — it’s quickly going to feel annoying and strange to have to take time out of our day to do our own searching through aisles and shelves to find the things we want. And more to the bottom-line point, unless retailers can justify the premium / see the financial return for maintaining and staffing customer-facing stores, they’ll close them down — as more and more are doing.

Granted, near-instant order fulfillment is not yet evenly distributed across geographical regions — and even when it is, lifelong habit and familiarity and boredom and other factors will continue to result in people shopping in physical stores.

But wait — people love shopping!

Yes, (a lot of) people do love shopping. And this love is what’s driving the renaissance in retail spaces — as all the un-lovable elements of shopping fall away, leaving just the good stuff.

It’s the entertainment, the diverting sensory pleasure and satisfying rejuvenation, the serendipity and human connection that we experience in the physical store that will continue to make it such an important part of our lives. And it’s why the legacy retailers that survive — and the new ones that thrive — are investing in creating stores specifically designed to deliver what only physical space can deliver.

It’s the experience

For a number of years now, retailers with the energy and wherewithal to try new things have been experimenting with experience — which is really just a way to say they’re paying attention to what makes people love being in a space, and then doing that. In retrospect this seems dead obvious — but it’s only become the new normal because of necessity, because retailers have had to create reasons for people to show up in stores.

Club Monaco’s coffee bar

If you’ve been surprised to discover a coffee bar in your clothing store, or happily waited while your jeans or sneakers are customized in front of your eyes, or simply enjoyed the spacious relaxed feeling of spending as much time as you want in an Apple Store, you know why experiential retail is important.

Levi’s Tailor Shop

In fact there are brands that believe so much in the physical experiences they create that quite a few host permanent spaces where they’re not trying to sell you anything at all — they just want to immerse you in the world of the brand. Spaces like Intersect by Lexus that deconstruct the pleasures and lifestyle elements of the brand, and like Samsung 837 that let you live for awhile in the rich ecosystem, amazing functionality and future vision of the brand.

Intersect by Lexus
Samsung 837

And of course there are endless popup experiences where brands just want you to hang out and Instagram yourself with their stuff, hopefully generating viral awareness of how awesome the brand is and creating a must-visit place for a brief period of time.

Louis Vuitton’s pop-up museum
Glade’s Museum of Feelings

What about architecture and interior design?

Every space still needs to be designed and built. And for the foreseeable future physical layout, material selection, furniture and fixtures and the entire domain of architects and interior designers will remain critical to a store being a place people want to visit and linger in. Architects still predominantly think of experience as what their work creates — and many are also starting to think more holistically about experience, given the reality that human attention and presence is increasingly focused in the digital realm.

While we’re already starting to see physical stores where displays and merchandise are entirely digital, and we expect Augmented Reality — especially via AR glasses — to make this more common in the near future, we’ll be relying on the work of architects and interior designers for many years to come.

When digital meets physical

Which brings us to what excites us most at NFR: The convergence of digital and physical. We’ve covered the ways self-expression and shopping are already converging, as well as how the ability to see and interact with photorealistic 3D models of whatever we want to buy is starting to transform all sorts of shopping scenarios. How can physical stores take advantage of these trends?

The endless aisle, fulfilled

As digital commerce has risen, retailers merchandising physical stores have evolved the concept of the endless aisle — the goal of making the universe of inventory the retailer carries easily available and browsable to the shopper in the physical store aisle. The scenario of a shopper leaving the store without buying items she’s looking for that the retailer actually has in inventory somewhere, but which the shopper couldn’t find for one reason or another, is frustrating for the shopper and legitimately painful for the retailer.

This problem has not yet been solved in any satisfactory way. The ideal is to have physical inventory and digitally-available inventory appear contiguously, perhaps even seamlessly. Solving for this is certainly complex, involving effective integration of numerous back end retail systems and inventory/supply side logistics, as well as requiring substantial user experience innovation.

And yet, the same innovations that will soon allow us to experience products in photorealistic 3D via our phones (and then glasses) promise the fulfillment of the endless aisle vision. Imagine being able to merchandise virtual products within the specific context of a purpose-built and beautifully designed physical store. The flexibility of presenting products digitally on the shopper’s device — curated automatically by the confluence of the store’s creative director and merchandiser and the personalization algorithms of the retailer’s digital ecosystem — meld the best of both digital and physical into a coherent shopping experience that optimizes for everything both retailer and customer care about.

This retailer holy grail will finally become a reality as spatial designers and digital experience designers work together to make physical merchandise and their digital twins available in a continuous, cohesive digital spatial experience.

Lowe’s presents virtual merchandise alongside physical merchandise via Augmented Reality
Keiichi Matsuda’s Hyper-Reality envisions digital layering over physical items via Augmented Reality

Personalized spatial experience — and how it gets that way

While pervasive digital-physical convergence is still a few years away, leading retailers are sprinting quickly in this direction.

Within 12–24 months, most people in major US cities will have experienced Amazon Go — a store where you swipe your phone, grab whatever you need and walk out. The first few times it feels like shoplifting — the sense of weightless freedom you feel when you just walk out reminds you of that first Uber ride, getting out of the car without explicitly paying. This experience is going to reset expectations of how a store should work and feel.

Similarly, Nike’s current round of flagships go a long way towards bringing what makes digital commerce so effective into the physical store. The whole experience is personalized via Nike’s mobile app, which lets you do everything from scan merchandise and shop related outfits, have interesting items show up in fitting rooms and be notified when they’re ready for you to try on, and check out instantly so you can walk out whenever you feel like it. Similarly you can use the app to have products held in advance of your visit — so it’s a quick in-and-out when you don’t have time to linger.

Via Nike’s mobile app, you can scan the code at the foot of a mannequin and shop the entire outfit, which can then be purchased immediately through Instant Checkout

In distinct ways, Amazon and Nike are leveraging what they know about their customers, both demographically and individually, and actively experimenting with the integration of digital experience and the built environment. Nike’s been doing this in its stores and popups for years, and of course Amazon practically invented recommendation and personalization in digital commerce ages ago — so they’re iterating from solid foundations.

Just as every digital-native retailer has to keep Amazon in mind at every moment, so every retail brand must be awake to the implications of this convergence. The next 3–5 years will see everything we love and value about digital merge with enough of our physical shopping experience that it will become the new normal — or at least, the new overwhelming preference of shoppers. If you’re a retail brand with physical stores and you’re not already experimenting with a converged experience, it’s time to take action.

Sensors are how

It took Amazon’s drive and wherewithal to solve for the true grab-and-go experience. Make no mistake: This is serious technology, the fusion of a diversity and plethora of sensors that most retailers have barely experimented with. As with AWS cloud services, we anticipate that the technology powering Amazon Go will eventually be available to retailers with both the motivation to match its capability and the willingness to have their stores be intimately dependent on Amazon for their everyday functionality.

The world of sensors and cabling that makes Amazon Go, go

And everything Nike is doing in its new stores is similarly enabled by the careful and ubiquitous placement of sensors — cameras, location and proximity and movement sensors of various kinds — made useful by software algorithms that analyze all their data in real time. Combined with the numerous sensors on our personal devices, sensors in retail spaces are becoming critical to delivering an optimally personalized experience for the shopper, as well as an optimally informative and insightful analysis for the retailer.

Today, this highly personalized retail experience relies on shoppers having the retail brand’s mobile app installed, as well as an authenticated account with the brand — but this is becoming less of a hurdle all the time, especially for brands that create compelling reasons to install their apps. The huge upside for both retailer and shopper is that everything about the customer-brand relationship and history can inform and enable the in-store experience, making it more efficient and aligned with the needs, interests, even the schedule and mood of the shopper.

We’re just getting started

All of this is just scratching the surface — of what’s possible, what it will take, and where we need to be careful and considered.

There are multiple additional explorations lurking here — about privacy, data collection and surveillance; about retail applications of Artificial Intelligence (AI) and Machine Learning (ML) and their promise and peril; about technical architectures and ROI; and so on — and we’ll be covering all of these important topics as NFR evolves.

The stores of the near future may trend towards simplicity — physically sparse yet rich with digital experience

Experience + Functionality + Fulfillment = Joy

The near future of the physical store is already here, it’s just not evenly — or frankly, widely — distributed. Tight integration of physical infrastructure and cloud-based services, customer-facing digital experience touchpoints both handheld and installed, architectural and interior design and merchandising strategy, and near-zero fulfillment logistics — all of these are coming together to deliver holistic retail experience ecosystems that deliver what shoppers and retailers need and want.

When we can get what we’re shopping for while also getting the entertainment, social and sensory satisfaction we crave, we will have arrived in the Near Future of Retail.

Near Future of Retail

Exploring the leading edge of retail as the digital-physical convergence unfolds: AI/ML, VR/AR, voice, IoT, digital spaces. Sharing what we see and why it matters, and channelling our collective wisdom into practical guidance for those with a vested interest in this near future.

Neil Redding

Written by

Executive Technologist. Digital Futures Strategist. Catalyst. Mycophagist. Palindrome.

Near Future of Retail

Exploring the leading edge of retail as the digital-physical convergence unfolds: AI/ML, VR/AR, voice, IoT, digital spaces. Sharing what we see and why it matters, and channelling our collective wisdom into practical guidance for those with a vested interest in this near future.

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