The Need for Bricks AND Clicks: How Retail Space Will Evolve in a Post-Pandemic Era

With the gradual emergence from the shackles of lockdown, UK shoppers are back on the high street. Though Brits are predicted to have spent over £4 billion in the first week of non-essential retail opening, the future of brick-and-mortar retail is not rosy — far from it.

ASOS’s recent £330 million buyout of Topshop, copied by other flagging retailers like TM Lewin and Cath Kidston, threatens to mark the end of an era — an era that celebrated the leisurely pursuit of shopping. Yet whilst the trajectory of the high street appears bleak, there remains a strong case for brick-and-mortar retail in our culture and economy — it will just play a different role in our lives. Especially for the 81% of us who see physical stores as vital to the shopping experience.

The evolving retail landscape

The evolution of retail space is not a new phenomenon. There have already been successive ‘waves’ of transformation — namely in the move from the local high street to out-of-town shopping centres, followed by the growth in e-commerce pioneered by Amazon. Whilst the latter ‘wave’ has been catalysed by Covid-19, consumers and brands alike have benefitted from increased digitisation in varying capacities. Shifting a brand’s offering to completely online is often the quick and easy answer: it’s cheaper than paying business rents, retailers can expand their reach and collect data more efficiently. For the end customer, they can shop their favourite brands (including those that have recently entered administration, like Topshop) wherever and whenever they like, 24/7.

But is this truly what customers want? We missed the shops whilst they were closed — ‘Primania’ ensued after non-essential shops reopened in June 2020, reinforced by recent data that states 59% of UK consumers prefer to buy in person. In contrast, online shopping has become more of a necessity — especially for older, vulnerable people. Waitrose has reported the number of regular online shoppers aged over-55 has trebled, with the main reason for doing so quoted as “I don’t want to go to the supermarket.”

“The retail space defined my youth”

As consumers, we often find ourselves shopping multiple times a week — if not several times a day. Whilst these trips may be essential — like buying a pint of milk or topping up medication — in-person shopping and the rituals associated with them inherently reflect our higher-level needs. It can be a stress reliever in the form of ‘retail therapy’ or somewhere to gain inspiration. Conversely, it can dictate the way we want to be perceived by others — shopping can be a social activity in which we judge ourselves and other people on the material things we try, buy and own.

It has been studied that shopping rituals can even shape our identities. In a family, such rituals can help define its’ members and create points of difference between them — e.g. stereotypically the ‘mother figure’ does the weekly food shop. In fact, it has been cited by various academics that the ritual(s) of shopping ‘drive much of modern life’ — especially where it has become an activity in itself, not just a means to an end. This was observed throughout Covid-19 lockdowns, as a trip to the ‘big Tesco’ became a day out for the household.

For me, hanging out in my local shopping centre as a teenager, outside a WHSmith for hours, occupied most of my teenage years. Heading to Oxford Circus and picking out my prom dress/graduation outfit/job interview suit marked significant and memorable changes in my life. As a result, being in the retail space helped define my youth and friendships. So much so, I wrote my final year college and University dissertations on the High Street and what it means to me (and so many others).

What’s in a ritual anyway?

In a pioneering 2013 study, Harvard Business School and the University of Minnesota found that rituals create value for everyone involved, namely by adding meaning to each component in the process. Added value was proved by research participants who enjoyed eating chocolate (desirable stimuli) and carrots (neutral stimuli) MORE once a ritual was performed to eat them. And crucially, participants were willing to pay more to consume the product once the ritual was complete.

An illustration of this is Apple — where new product launches often see customers queue outside stores for hours, sometimes days. This ritual has been encouraged by Apple itself, who purposely limit their inventory and make queuers feel special through ceremonial acts of clapping and paparazzi. It’s this post-purchase, post-ritual feeling that makes the most loyal customers come back for more, launch after launch — which might also explain why they’re willing to pay a premium price for Apple products on their release date, in person.

To what extent can this theory be applied to an online shopping environment? Perhaps not that far, because the value from rituals is only extracted when there are multiple layers of involvement, often with an audience present. This can easily be achieved in a physical store, but arguably not on a mobile or laptop, which is significantly more two-dimensional and private.

The need for bricks and clicks: Blending the best of both worlds

In the UK, economic recovery and in-person shopping have made something of a comeback post-lockdown. Whether retailers continue to thrive or survive will depend on their ability to blend the best of both worlds in a post-pandemic era — i.e. the precious in-person shopping rituals and the value these bring, as well as the unique features of e-commerce like ease and convenience that we’ve become so used to.

This could see new shopping formats be introduced. Even before Covid-19, some brands have done this via ‘showrooming’ — i.e. opening specific stores where customers can ‘try before they buy’, often completing their purchase online. IKEA has opened smaller concept stores in UK cities for customers to do exactly this (minus the ritualistic meatball-eating), emulated by Made.com in desirable city locations with high footfall. Zara’s London flagship store featuring interactive mirrors allows customers to pick up orders fulfilled by robots — removing typical pain points in the path to purchase like queueing and using changing rooms.

In addition, new transformative technologies for use in the ‘real world’ are being realised. Amazon Go — a new-age convenience store that seeks to pioneer a ‘just walk out’ customer experience using automated retail — has recently launched in London from the US. Beyond this, augmented reality (AR) and virtual reality (VR) are predicted to become more popular in the retail space. Shopify, a subscription-based point of sale app for physical stores, has launched Shopify AR for retailers to showcase their products to customers. A recent global survey run by Nielsen revealed AR and VR are the top two technologies consumers are seeking to amplify their lives in the future: with 51% stating they’d be willing to use AR/VR to assess new products.

Looking to the future — reimagining the role of the brick-and-mortar store

To emulate the multiple layers of involvement we see in rituals, brands will need to develop in-person experiences that enhance (or directly compete) against e-commerce. Retailers that are swiftly and successfully able to adapt their customer experience will reign supreme, as witnessed in the 2008 financial crash. The same is true of the Covid-19 pandemic. However, fast forward 13 years, this will mean more than retailers simply re-opening their doors to the British public — adjusting omnichannel networks will require innovation, speed, and agility. All with renewed health and safety measures in mind.

Physical stores should remain a key component of a retailer’s offering to some degree due to the unique benefits they bring to the customer, as seen in ‘showrooming.’ In fact, the brick-and-mortar store itself could become a valuable source of insight for brands and marketers to better understand the new, post-pandemic customer. Inevitably some stores will close — but this points towards the increasing need to use geodemographic data to maintain/open stores in areas of high strategic importance. Or, some shops could be turned into ‘pick up’ only stores for online orders — a truly blended commerce reality.

As Covid-19 slowly becomes a relic of the past, it has laid the foundations for a whole host of new opportunities to be imagined — bolstered by the fast-paced digitisation that occurred in 2020. Perhaps the future depicted in Cher’s virtual wardrobe in the film Clueless isn’t such a distant dream at all?

By Alexa Lynwood, Strategist at RAPP