If this past year is anything to go by, it’s safe to say next year will also be characterised by change. And lots of it.
Of course, change needn’t be a bad thing. Despite the number of stores closing, and the headlines full of retailers in financial trouble, I believe there is still a place for the physical store in the retail landscape of the future.
That doesn’t mean that the role of the physical store in the future will be quite the same as it is now, or even as it has been in past. It needs to evolve in-line with changing expectations, trends, and market demand. This is especially important considering the highly competitive nature of the retail industry, with shoppers that are ever more demanding, and knowledgeable, and who need a reason to visit the high street.
As a result, retailers are focusing more and more on experiential marketing or shoppertainment. Nike is just one example of a brand successfully using shoppertainment to drive footfall and increase the time shoppers spend in-store. It began in 2016 with the opening of a flagship mega store in SoHo, New York, designed to “deliver the best of Nike’s personalised services, from exclusive trial spaces to product customisation, the store creates a seamless link between Nike’s digital and physical platforms.”
The retailers that get this right - delivering the right combination of brand identity, customer-centricity and engaging design - ultimately drive more people into store, encourage them to linger for longer and convert that footfall into sales.
This shift will also include more opportunities to cross-sell or upsell, with value-added complementary services. Some retailers are doing this already, with the obvious examples of Sainsbury’s including Argos concessions in-store, as well as adding Patisserie Valerie click and collect counters in 70 of their stores. Just last week, Sainsbury’s announced a partnership with high street fashion brand Oasis, with plans to open five concessions in-store by next spring, so it certainly seems to be a strategy that’s working for them.
That said, physical retailers still need to differentiate themselves from other retailers, as well as their e-commerce counterparts. Most have already taken an omni-channel approach, using a blend of online and in-store to attract and retain customers, but while e-commerce giants will continue to make inroads to varying degrees, it’s not likely that they’ll ever completely take over.
There are some things that shoppers just can’t experience online. Looking at the grocery example, while growth is anticipated within this sector, the fact that we still like to touch and examine our produce before we buy, means many of us will still make the effort to shop in a physical store to satisfy these needs. This ties back to experiential marketing - making the in-store experience so positive that people stay longer and that they return, again and again.
Technology will also play a role in this retail future. We’re already seeing the prevalence of AI, machine learning and robotics throughout the back office and supply chain. We expect to see greater take-up of those technologies that can positively influence the customer experience, particularly at the point of sale. This will be especially important in the omni-channel environment where there will be a drive to ensure the shopping experience and level of customer engagement retailers offer are consistent across all touchpoints, whether that’s the physical store, online, app or social media.
While we will never have a definitive answer on what the future of retail will look like, we can certainly make an educated guess, based on what’s happening today. But that’s not discounting a few curveballs, either from innovative new technologies, or even shoppers themselves. But it’s how retailers adapt to these that will show who will survive and prosper.