Experts see innovative stores and pop-ups

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

Online shopping has increased since the beginning of the pandemic. In the UK alone, internet sales rose from below 20% to over 32% in just three months, at the start of Covid’s first blockage. And experts expect the convenience of online shopping to mean that consumers will continue this habit even after the pandemic.

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

Both trends show how important it is for retailers to get their physical presence right.

Kristina Rogers, global consumer leader at Ernest Young, told CNBC in March that there was a “real redefinition” of how retailers use their physical space.

“It’s not just an exchange of goods,” she said, adding that retailers need to understand who their customers are and what they want.

She pointed out how Target, one of the largest retailers in the US, has chosen to have more space in its stores for Apple products. This allows customers interested in Apple devices to check them while buying other things in Target. It’s also convenient for current Apple users who can combine two trips into one.

“They recreate a ‘mini mall’ in their store,” she said.

But not every retailer has such a large area to work with. In fact, some experts believe that the successful stores of the future could be the ones that, regardless of size, continue to offer new things.

“There will no doubt be fewer physical stores as we move forward,” Matt Clark, CEO of AlixPartners, told CNBC Street Signs Europe in March. “But the remaining stores will have to offer even more experience and an additional set of services, as well as just the ability to buy products.”

One way retailers can stand out is by focusing more on pop-up stores. These are temporary open spaces to show a certain line or product and have gained popularity in recent years.

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

Some well-known brands have already looked for pop-ups as a way to attract more customers. Stella McCartney, the British fashion designer, presents various local companies in her iconic store on Old Bond Street, London, to celebrate lifting restrictions for UK retailers Guess, meanwhile, is about to open its first pop store -up in Germany for active clothing.

Pop-ups allow retailers to create something “really fresh” while saving costs, Cohen said.

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

In addition, this type of store stimulates 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 will expire … creates a consumer of excitement. ‘Wow, if I don’t check out this retail pop-up offer … in the next 3 on Monday, she will disappear, I will never be able to see her, “he said. This adds to the kind of excitement that is lacking in many traditional stores.

So, it’s not just about the feeling of having an exclusive product, but also an exclusive experience. And this means that there are other ways in which retailers can capitalize on this trend of exclusivity.

“In terms of exclusivity, a lot of street retailers now require, either by appointment or in fact, when you get to a store, that you have to be tied to a salesperson. or worse, it creates a sense of exclusivity, “Cohen added.

Brands also recognize the growing importance of sustainability, both from a business perspective and due to the growing awareness of customers.

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

For example, in its iconic space in Stockholm, H&M offers repair services for old clothes and hires some of its outfits for special occasions.

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

“The debate over value versus values: the need to be really, really clear about your sustainability credentials, ethical sourcing, etc., but at the same time, it offers great value for money that means not just cheapness, but value for money for consumers. ”