In the midst of all the relentless change and challenges in the retail industry, we are experiencing a parallel renaissance, where digital innovations, and a customer experience first model, are taking us back to the iconic days of Selfridges. Now retailers are challenged to scale beyond novelty as brands are becoming increasingly more visceral, merging both the digital and physical shopping spaces. In this digital age, physical space is required to create that depth of multi-sensory experiences, where memories are made, trusted community-based relationships are built, stories are told, and brands have a chance to resonate well beyond the actual product. With a physical presence, retailers benefit by stimulating higher organic online traffic, lowering new customer acquisition costs, and elevating the overall brand awareness.
“The New Retail” Blurring Lines Between Digital and Physical
Commerce as we know it is evolving, yet approximately 90% of all purchases are still influenced by the brick and mortar locations. Farfetch has built strong partnerships with the high-end luxury retailers and created an innovative digital luxury marketplace. The company’s store of the future concept is driving an outstanding customer journey by combining their digital personalization capabilities along with the luxury boutique experiences. Zara has experimented with a temporary click-and-collect pop-up store in East London, which specifically supports online orders in a more seamless fashion. Restoration Hardware (RH) has reinvented the luxury home furnishing shopping experience. According to the CEO Gary Friedman, RH is challenging the traditional retail model, by building inspiring spaces that blur the lines between residential and retail, indoors and outdoors, physical and digital.
Farfetch Store of the Future – Credit Farfetch
The Store as a Brand & Platform – To Build Relationships and Drive Communities
One of the more fascinating developments in the past year, has been Apple’s evolution of their already revolutionary stores, and rebranding them as “Town Centers”. Led by Angela Ahrendts, Apple’s SVP of Retail, the company is leveraging the Town Center to build relationships with each local community. To accomplish this, Apple’s new store model, is treating the store as the product with significantly more space, an even more curated assortment, to become inspirational gathering places, including classes on coding, music and photography.
Oculus NYC Apple Store – Credit Apple
Storytelling via experiential retail
Experiential retail has become the new gold standard for inspiring customers. The Gucci Garden, located within a 14th-century palazzo in Florence, Italy is a prime example of retailers providing a multi-sensory immersive cultural experience, all while building the Gucci brand. Starbucks is driving both inspiration and storytelling with their Roastery new concept stores. The Starbucks Roastery stores are positioning the art of coffee as the narrative, with their employees leading their latest product offering, which is the actual experience.
Starbucks Shanghai Roastery – Credit CNBC
We are entering into a new age of retail, where sustainable relationships, experiential storytelling and an optimized customer experience have all become critical differentiators for brands. The race is on for retailers to evolve, diversify their offerings, and provide a compelling reason for customers to remain loyal. With any transformative initiatives there is an inherent level of risk. However, these are the types of strategic risks that retail organizations are increasingly willing to take to stay relevant, innovative and ahead of the competition.