Experts see innovative and emerging stores

LONDON – The future of physical stores has been called into question by the coronavirus pandemic, but experts believe the key to survival will be reinvention.

For some time now, retailers have been trying to attract customers by creating in-store experiences, but now they need to be creative as shopping habits change and customers become more demanding.

Online shopping has grown since the beginning of the pandemic. In the UK alone, internet sales rose from less than 20% to more than 32% in just three months at the start of the first Covid-induced shutdown. And experts hope that the convenience of shopping online means consumers will continue with this habit even after the pandemic.

Meanwhile, nearly 50 stores were closing every day in the UK by 2020, according to accounting firm PwC.

Both trends show the importance that retailers have in achieving their physical presence.

Kristina Rogers, Ernest Young’s world consumer leader, told CNBC in March that there is a “true redefinition” of how marketers use their physical spaces.

“It’s no longer just a commodity exchange,” he said, adding that retailers need to understand who these customers are and what they want.

He highlighted how Target, one of the largest retailers in the United States, has opted to have more space in its stores for Apple products. This allows customers who are interested in Apple devices to check them while buying other things on Target. It’s also convenient for current Apple users who can combine two trips into one.

“They’re recreating a‘ mini mall ’inside their store,” he said.

But not all retailers have such a wide area to work with. In fact, some experts believe that the successful stores of the future could be those that, regardless of size, continue to offer new things.

“There will definitely be fewer physical stores as we move forward,” Matt Clark, managing director of consulting firm AlixPartners, told CNBC’s Street Signs Europe in March. “But the remaining stores will have to offer an even greater experience and a set of additional services, as well as just the ability to buy products.”

One way to highlight retailers is to focus more on emerging stores. These are spaces that are temporarily open to display a specific line or product and have gained popularity in recent years.

“One of the main opportunities for emerging stores is to create new exploration opportunities. It’s not about a consumer going to a Ralph Lauren store that is the same as it was 10 years ago or 20 years ago,” Alex Cohen said. tell CNBC a Compass commercial property expert.

Some reputable brands have already looked at pop-ups as a way to attract more customers. Stella McCartney, the British fashion designer, presents different local businesses at her flagship store on Old Bond Street, London, to celebrate the removal of restrictions for UK retailers. Guess, meanwhile, is about to open its first pop-up store in Germany for active clothing.

Emerging spaces allow retailers to create something “really cool” while saving costs, Cohen said.

“Brands have the opportunity to spend much less, not have to commit to a long-term contract, spend less on modular facilities and do it very quickly,” he added.

In addition, this type of store promotes the idea of ​​exclusivity, a feeling increasingly popular with many customers.

“The whole idea of ​​exclusivity is really important. The fact that a pop-up window expires … generates excitement in consumers.” Wow, if I don’t check out this emerging retail offering … in the next 3 months, it will go away, I’ll never be able to see it, ”he said. That adds to the kind of excitement that many traditional stores lack.

So it’s not just about the feeling of having an exclusive product, but also an exclusive experience. And that means there are other ways for retailers to take advantage of this trend of exclusivity.

“When it comes to exclusivity, a lot of street retailers need, either by appointment or when you get to a store, that you have to be tied to a salesperson. You can’t navigate and that, for better or worse: it creates a sense of exclusivity, ”Cohen added.

Brands also recognize the growing importance of sustainability, both from a business standpoint and by the growing awareness of customers.

And it not only comes down to more “ethical” product lines, but also what services are available in physical stores.

At its flagship Stockholm site, for example, H&M offers services to fix old clothes and hires some of its dresses for special occasions.

“The sustainability movement really highlights one of the basic dichotomies that the fashion industry particularly faces, but it also faces retail,” Clark said of AlixPartners.

“The debate over value versus values: the need to be very clear about your credentials for sustainability, ethical provision, etc., but at the same time offer great value for money that not only means cheap, but value for money for to consumers “.