As a former architectural designer, I’ve always been interested in the role physical spaces play in our lives. Well beyond simply providing shelter, physical spaces can inspire emotions, bring people together, and shape how new ideas spread. Knowing this, the idea of the retail apocalypse – that all physical retail will disappear thanks to the rise of e-commerce – never resonated well with me.
By now most experts have reached the conclusion that brick-and-mortar retail is not, as was once hypothesized, facing imminent and unavoidable destruction. In this post-retail apocalypse era, most people agree that the physical store will continue to play a significant role in a retail customer’s shopping experience, alongside digital and mobile channels. But the major question for retailers is: What is that role? In an omni-channel world where customers comfortably oscillate between physical and digital spaces, what will continue to bring customers to brick-and-mortar stores?
Here are three strategies retailers can leverage to design for optimized experiences that will keep their customers engaged both in-store and online:
It’s no secret that online channels have made shopping more efficient and convenient than ever for consumers. Today, shoppers can browse and make purchases from the comfort of their own homes, and have the items they buy delivered within days, if not hours. However, a number of pain points still exist within the online shopping paradigm that physical stores are uniquely positioned to address. Despite the increasingly rapid delivery options available to online shoppers, the desire for instant gratification still drives consumers to physical stores. In fact, over the past few years, more consumers have exhibited webrooming behavior – in which they browse and research online before completing purchases in store – than showrooming behavior – in which they browse in stores before buying online. Retailers can enhance the convenience of online shopping by positioning their stores as fulfillment hubs, and connecting inventory databases across locations, to ensure products are located as close as possible to the consumer when they’re ready to make a purchase.
Another way physical stores can satisfy customers and bolster the convenience of online shopping is by providing easy and efficient ways to complete returns. One recent study found that over half of consumers prefer to make returns in stores, including 55% of shoppers in their twenties. Major retailers are responding to this by developing the digital and in-store infrastructure needed to make in-store returns as seamless as possible for customers. Nike now allows for the curbside drop-off of return items at its new location in Los Angeles, while Walmart’s mobile app enables shoppers to complete in-store returns within 30 seconds. With more than 30% of online purchases culminating in a return, physical stores can play a significant role in a customer’s end-to-end experience by making the return process as seamless as possible.
As online competition grows increasingly fierce, retail brands are searching for opportunities to distinguish themselves from other brands and reinforce customer loyalty. Many retailers have started to embrace the idea that they can play a broader role in their customers’ lives by providing physical spaces where customers can go, not just to complete transactions, but to have experiences that are supported by the brand and the products it produces. Starbucks has been doing this for decades, with its stores acting as coffee-fueled “third places” – spaces that aren’t home or the office, where people can go to socialize and work.
Both traditional and new brands alike are positioning their physical locations as spaces for their customer communities to gather. With the “House of Vans” in London, which features an artist incubator space, cinema, music venue and multi-tiered skatepark, Vans has created a place where customers can go to learn about, participate in, and contribute to skate culture alongside other skaters. The flagship location of athletic gear company Solfire includes a fitness studio and smoothie bar where athletes can gather, exercise and recover together. The space also features a community board, which highlights all the places in the neighborhood around the store where people can go to get exercise and demonstrates the brand’s support for the local fitness community.
By positioning their physical stores as spaces for immersive and participatory customer experiences, and not solely transactions, retailers will be able to develop deeper, more emotional relationships with their customers and create loyal communities around their brand and products.
Today, consumers are not lacking options when it comes to where to shop. Where shoppers were once limited by time and geography to the few storefronts on Main Street, today they can make purchases from retailers around the globe with the simple click of a button. While this proliferation of options is certainly a good thing in many respects, it has also introduced a new set of issues and considerations for the retail consumer. How do they decide between multiple retailers offering similar products at the same price point? How can they verify that the product they are considering purchasing is of good quality, or that the advertisement they are looking at is indeed real, and not a scam?
In these instances, a physical store can make a significant difference, providing consumers with the “touch and feel” opportunities they need to feel confident in the product they are purchasing, and the retailer they are purchasing from. Direct-to-consumer brands like Away, Everlane, and Allbirds – many of which never planned to have a physical presence – have recognized the powerful ability brick-and-mortar stores have to convert would-be-shoppers into brand loyalists, and are increasingly opening stores in select locations across the country. In many cases, these brands have found that their physical presence serves to boost online sales; Indochino, a men’s fashion brand that originated online, found that online sales grew twice as fast in areas where it opened a physical showroom.
Although it is inevitable that consumers will complete an increasing amount of their transactions online in the future, physical stores will continue to play a critical role in establishing the initial trust needed to convert browsers – online and offline – into buyers. Retailers will succeed by using online shopping data to inform where they open new temporary and permanent brick-and-mortar locations, and by ensuring physical stores are designed to generate trust, particularly amongst new shoppers.
It’s clear that over the next few years the popularity of e-commerce and online shopping will continue to grow, profoundly impacting our retail environment. Brands that are unable to adapt will disappear, stores will continue to close and brick-and-mortar footprints will continue to shrink. Retail brands that design their physical spaces to work in harmony with digital and mobile channels by optimizing them for the specific purposes of building trust, creating convenience and strengthening community, will undoubtedly come out on top.