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Catherine Lucas, Managing Partner

So, retail stores are dead, are they?

A quick look around you and it’s easy to see how this might ring true when purchases seem to be systematically moving online and countless empty units line our high streets.

Toys R Us – the latest retail giant to fall from grace – recently announced the pending closure of 26 stores in the UK, meanwhile, its parent company has suggested that between 100 and 200 stores will close in America. Add this to reports that there is currently an estimated one billion square feet of empty retail space in the US alone and it becomes less difficult to conceive that the writing’s on the wall.

However, if you consider that 80% of transactions are still expected to happen instore at 2020 and online power-houses like Amazon continue to grow their presence in the physical space, I’d argue that the real threat isn’t the irrelevance of the store environment, but instead, traditional retails reluctance – at its increasing peril – to reimagine itself, beyond a perfunctory purpose. Bricks and mortar isn’t dead…it’s merely broken. The question is: what are retailers doing to fix it?

With the advance of innovators and new formats; pop-up stores, curated and hybrid spaces, the advantage physical stores previously had from offering omni-channel strategy at scale, or a version of, is quickly evaporating. Add shifts in human behaviour; noticeably a surge in appetite for more meaningful connections, the demand for something new and the expectation of ‘always-on’, it’s no wonder that the dynamics of the value exchange have changed, with consumers increasingly asking brands and retailers, ‘what have you done for me lately’?

So how do traditional retailers counter this when breadth, value, ease and access seem to have been sown up? Is there a way to not only level the comparable playing field, but to lead the offensive?

We believe the answer is to be more human: To create experiences that are embedded in human-centred design, that consistently connect emotionally and authentically through differing moments in the retail journey, that help to build a true relationship with consumers.

The Human Touch

The store – although only one element in the journey – is a battleground that can uniquely offer us what we’re often missing, the human touch. More than just a repository for product, these days an extended online offering, no-question returns policies and tailored-to-your fit, stores are uniquely placed to meet the emotional shortfall created by online, meeting the very human need to still connect: via touch, feel, taste, and smell, to experience the products in person. Mercedes-Benz is showcasing this new wave in the form of pop-ups across shopping centres and events throughout the UK, changing how it interacts with the customer. It wants people to feel the spirit of the brand, but not just connect with it, but each other.

Mercedes-Benz Pop-Up, Selfridges Birmingham

Mercedes-Benz Pop-Up, Selfridges Birmingham

Community Hub

This intrinsic need to connect with each other is another way that stores are responding. The very human need to belong and the trend of the hangout culture as seen at Virgins Mega Store, Abu Dhabi, is being capitalised on by brands who are facilitating a sense of community and creating a set of great experiences. A place where customers can spend time together joining their online brand communities in to real life meet ups to do the things they love like fitness classes, movie screenings and workshops instore. Brands are seeing the benefit of investing in their communities, which means they need to make the whole ethos of their brand accessible, not just their products.

Virgin Megastore, Abu Dhabi

Virgin Megastore, Abu Dhabi

The Soft Sell

Finally, our need for consultation, credible advice and customer service is still the bastion of the retail environment, but this comes with a heavy health warning. The era where digitally primed shoppers often know as much as sales teams and community hubs and playful experiences become the new norm, shows the approach is changing. A hard sell feels increasingly out of touch and people are demanding a new kind of ‘service’ that is more about connection and influence. Sephora has absolutely led the way in giving the shopper more control and flexing the way the staff interact, from giving expert advice using Sephora’s Colour IQ Scanner, to virtual assistants. And far from these light touch stores being anti-sell, they can actually boost both brand perception and the bottom line longer-term to the point that the trend will be to have entirely non-transactional malls in the near future.

sephora solour IQ scanner

Sephora Colour IQ Scanner

So, where does this leave the physical store? Certainly not in the position of doom and gloom some would have you believe. If a traditional retail brand looks for parity with the e-commerce giants, then focuses its proposition on areas it can still lead on; putting human-centred design at the very heart, then we believe they can still win. But there is a bigger shift in behaviour than this, where the retailers are joining the very giants that are trying to put them out of business.

Is this a case of keeping your friends close and your enemies closer, or dare I say it, brands actually starting to put humans first?