2 May 2023
by Isabelle Ohnemus
In the wake of the global pandemic and the rapid acceleration of e-commerce, many have been quick to sound the death knell for physical in-store shopping. However, this view may be somewhat shortsighted. There is just as much evidence supporting the continued growth and evolution of in-store shopping as there is pointing to the closure of brick-and-mortar stores.
Forbes Council Member Melissa Wong creatively challenges the idea that in-store retail is dying by debunking five myths:1
And while the retail apocalypse may be an over-dramatization there is no denying the announcements of leading retailers and the pending closure of 1,417 stores across the US.2 Reasons may vary, including bankruptcy proceedings, cost-cutting, and adjusting store formats to meet changing shopping trends. For good measure, UBS is projecting between 40,000 to 50,000 retail stores in the US closing over the next five years3, down from the 80,000 closures it previously forecasted.4
Nor is this trend confined to the US. The UK experience is no different with a PWC study estimating a total of 11 530 chain outlets were shut across the UK high street, shopping centers, and retail parks during 2022. While this amounts to an average of 32 closures per day, a small measure of comfort can be taken when during the previous three years nearly 50 closures per day were seen during the pandemic.5
On the flip side of the coin others may disagree. Jonathan Silver, CEO and founder of Affinity Solutions, put it best at the recently held NRF US State of Retail & Consumer conference when he said:6
People like the in-store experience, they’re social beings, we’re social beings – the ability to go back and forth [between online and physical store formats] is greater than it ever was.
Whatever side of the fence you sit on, it is clear that the fashion retail industry has undergone significant changes in recent years, driven by technological advancements, evolving consumer preferences, and the rapid growth of e-commerce. In this dynamic environment, the in-store shopping experience remains a crucial aspect of a retailer’s value proposition, as it offers unique opportunities for creating memorable and personalized encounters that drive customer loyalty and satisfaction.
In a world where digital and physical channels are converging, it is vital to understand the themes, trends, and driving forces shaping the in-store retail shopping experience. As customer preferences and behaviors evolve, fashion retailers must adapt and innovate to stay relevant and competitive.
In this blog, we will explore this evolution, the role technology will play in shaping the future in-store shopping experience, the risks associated with emerging technologies, and the strategic steps luxury fashion retail store owners must take to thrive in this new era of retail.
The fashion industry and the offline shopping experience are currently facing several dominant themes that are shaping the retail landscape. Some of these key themes include:
While the themes identified earlier reflect the broad, long-term forces shaping the fashion industry’s in-store shopping experience, trends are the more immediate, observable developments that mirror those underlying themes and include:
It is becoming increasingly clear that there is no one-size-fits-all solution for success in this ever-evolving landscape. Instead, the most forward-thinking brands are embracing a combination of strategies that cater to the diverse needs of their customers and help them stay ahead of the curve.
Fashion retailers are increasingly focusing on creating seamless omnichannel experiences for their customers to provide a consistent and personalized experience across all touchpoints.
One of the key strategies for reimagining the in-store shopping experience is by focusing on experiential retail. This approach goes beyond the traditional transactional model, aiming to create immersive, interactive, and memorable experiences that evoke emotions and build connections with customers.
Some luxury fashion retailers have already adopted this strategy by incorporating art installations, interactive displays, and even hosting events within their stores to engage and entertain their clientele.
Only if retailers stop thinking like retailers will they truly innovate.25Brian Solis, Global Innovation Evangelist at Salesforce
By offering these unique experiences, retailers can encourage customers to visit their physical locations and foster brand loyalty.Among the many experiential models that have emerged, the NPD Group identified seven key experiential models that allow brands and retailers to create compelling value propositions that move beyond price:26
|EXPERIENTIAL MODEL||DESCRIPTION||OPPORTUNITIES / EXAMPLES|
|Convenience||Provide consumers access to products how they want it, when they want it.||Retailers like REI offer rental services so consumers can interact with the new product categories without the perceived hassle of owning these products|
|Expertise||Offer shoppers personalized guidance across various stages of the purchase journey.||In complex categories like tech, service offerings (such as installation) can help make product adoption more seamless, while driving incremental revenues for a retailer or brand.|
|Treasure Hunt||Sell excess inventory at discounted prices. Often consumers don’t know what they’ll buy when first shopping, and they enjoy searching through the store to find the best-perceived deal.||Increasingly, younger generations look to purchase used clothing as a way to enjoy the “thrill” of finding a unique product that others aren’t wearing for a discounted price while reducing the environmental costs associated with new product production.|
|Curation||Present consumers with select options that best meet their needs, rather than offering the widest assortment.||Rise of store formats conducive to exploration and discovery. These stores maintain a focus on highlighting the benefits of featured products.|
|Entertainment||Provide offerings in dining, spa, health-related entertainment, etc.||Lululemon’s 20,000-square-foot store in Chicago offers health food and yoga and mediation classes.|
|Frictionless||Leverage technology to help consumers save time during the shopping process.||When shopping in a Nike store, customers can use the company’s app to request different shoe sizes and access product information without waiting for a store associate.|
|Community||Use expertise, and high levels of customer interaction to build a community of product enthusiasts.||Retailer builds a community of enthusiasts through its “Event Space,” which hosts seminars and lectures on photography, video, and audio skills. Content is delivered both in its physical store and via digital platforms.|
Taking a future-orientated perspective into the physical retail space, the influential work of Bethan Alexander27 and her contribution to the Experiential Store Futures Model28 provides a useful framework and lens through which the design of future physical retail environments can be viewed. The model is based on the analysis of expert perspectives on the future of physical retail spaces and their roles within the omnichannel retail landscape. The model comprises the following four dimensions:
By factoring in these design considerations into the physical build of the store, retailers can create engaging, immersive, and customer-centric spaces that cater to evolving customer needs and preferences in the omnichannel retail landscape.
In today’s rapidly evolving retail landscape, the importance of investing in customer-centric technology for the physical brick-and-mortar store of the future cannot be overstated. As consumers grow increasingly accustomed to the convenience and personalization offered by e-commerce, brick-and-mortar stores must adapt and innovate to remain competitive.
By leveraging cutting-edge technologies that prioritize the customer experience, retailers can not only meet but exceed the expectations of their clientele. This strategic focus on customer-centric technology will be the cornerstone of success for the physical store of the future, facilitating seamless interactions, fostering loyalty, and ultimately driving sustainable growth in an ever-changing market.
The divide between physical and digital is no more, and while many of the technologies have already arrived, their deployment needs to be stepped up and a phygital strategy developed to win and retain customers in this new retail landscape.
Technologies primed for leveraging include:
The retail industry is no different from any other industry where the rapid pace of technological advancements has transformed various aspects of modern life, revolutionizing industries and reshaping consumer behavior. However, this rapid progress often outpaces the adaptation of laws and the regulatory environment, leaving a considerable gap in addressing the risks and challenges introduced by new technologies. As a result, businesses, consumers, and governments face complex legal and ethical dilemmas that require navigating uncharted territories, striking a delicate balance between innovation and protection, and continuously updating legal frameworks to accommodate the ever-evolving technological landscape. Legal issues and risks include:34
Nevertheless, by adopting these digital technologies, the fashion industry can enhance the in-store shopping experience, making it more engaging, personalized, and efficient for customers while increasing sales and customer satisfaction.
Attracting and retaining skilled employees is a crucial factor in providing exceptional in-store experiences. Employers in the retail space face several challenges in this regard, including high turnover rates, a competitive job market, and the need for a diverse skill set. To overcome these workforce challenges, retailers can adopt various steps, actions, and strategies to create an attractive and sustainable work environment for their employees:35,36,37
By implementing these strategies, employers in the in-store retail space can effectively address the workforce challenges they face and create a more attractive and sustainable work environment for their employees, leading to better in-store experiences for customers.
The future of bricks and mortar retail in the fashion industry is undoubtedly facing significant challenges, particularly in the wake of the COVID-19 pandemic. To stay competitive, fashion retailers must adapt their strategies and embrace the changing needs and expectations of consumers.
By retaining the human touch, embracing omnichannel strategies, focusing on personalization, experiential retail, and leveraging emerging technologies, luxury retailers can differentiate themselves in a competitive market and create lasting connections with their customers.
Ultimately, the future of bricks and mortar retail in the fashion industry will depend on the ability of retailers to innovate and evolve, while still staying true to their brand identity and values.
Not content to have the last word I asked the world’s new oracle ChatGPT what it thought the future of the in-store fashion retail experience would look like:
Title: “The Future Awaits: Fashion Haven 2040”
The sun sets in a soft hue of tangerine as Emma, a fashion-forward influencer, steps into Fashion Haven 2040, a luxury retail store that encapsulates the future of in-store fashion experiences. As she enters, she’s greeted by the store’s AI hologram assistant, Amara, who recognizes her from a previous visit through facial recognition technology.
“Welcome back, Emma!” Amara cheerfully announces. “We’ve received new collections since your last visit that align with your personal style preferences.” The store’s dynamic smart walls transform to showcase a curated selection of outfits tailored for Emma, blending seamlessly into her chic and sophisticated aesthetic.
Emma’s eyes dance between the displayed ensembles, as a virtual reality (VR) fitting room invites her to try the outfits without ever lifting a finger. She dons a lightweight, sleek VR headset and is instantly transported into a virtual space with a 360-degree view of herself, wearing the selected outfits.
As Emma twirls in front of the virtual mirror, she notices a digital fashion advisor, who offers her personalized style tips. “How about trying this statement necklace to elevate the look?” The advisor suggests. With a simple nod, the accessory materializes around Emma’s neck, completing her outfit.
Content with her selections, Emma exits the VR fitting room and shares her choices with Amara. The AI assistant processes her order, and a group of in-store robotic assistants prepare the items for her in eco-friendly, reusable packaging. Emma’s transaction is completed through a quick biometric scan, ensuring a secure and efficient shopping experience.
On her way out, Emma spots an interactive sustainability wall, where Fashion Haven 2040 proudly shares its commitment to ethical sourcing, eco-friendly materials, and support for local artisans. Emma smiles, knowing she’s made a conscious choice to invest in the future of fashion, and walks out into the twilight, ready to conquer the world in her new attire.
I’m a believer, are you?
1 Wong, M. (2022, May 10). Five Myths About The Death Of Retail. Forbes. https://www.forbes.com/sites/forbesbusinesscouncil/2022/05/10/five-myths-about-the-death-of-retail/?sh=d93265876e32
2 Reuter, D. (2023, April 12). More than 1,400 stores are closing across the US in 2023. Here’s the full list. Business Insider. https://www.businessinsider.com/stores-closing-in-2023-list
3 Thomas, L. (2022, April 13). UBS expects 50,000 store closures in the U.S. over the next 5 years after pandemic pause. CNBC. https://www.cnbc.com/2022/04/13/ubs-50000-retail-store-closures-in-us-by-2026-after-pandemic-pause.html
4 Thomas, L. (2021, April 5). More retail pain ahead: UBS predicts 80,000 stores will close in the U.S. by 2026. CNBC. https://www.cnbc.com/2021/04/05/store-closures-ubs-predicts-80000-stores-will-go-dark-by-2026.html
5 PricewaterhouseCoopers. (n.d.). Store openings and closures 2022. PwC. https://www.pwc.co.uk/industries/retail-consumer/insights/store-openings-and-closures.html
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19 Cano, X. P. I. (2023, March 15). The benefits of Store as a Service | Openbravo Blog. Openbravo Blog | the Official Openbravo Blog. https://www.openbravo.com/blog/benefits-store-as-a-service-experience/
20 Digital, K. (2023, April 13). What Is BOPIS and How Can BOPIS Benefit Your Retail Strategy? Kyanon Digital. https://kyanon.digital/what-is-bopis-and-how-can-bopis-benefit-your-retail-strategy/
21 Dennis. (2023). Nike By You – Design Your Own Sneakers. Grailify. https://grailify.com/en/nike-by-you-design-your-own-sneakers
22 Zara.com. (n.d.). STORE MODE IN THE APP. https://www.zara.com/ca/en/help-center/StoreMode
23 Achim, A. (2019). Big Data: The Vital Tool for Luxury Brands in China. Jing Daily. https://jingdaily.com/big-data-the-vital-tool-for-luxury-brands-in-china/
24 User, R. (2021). H&M Explores New Way of Shopping with Instagram. H&M Group. https://hmgroup.com/news/hm-explores-new-way-of-shopping-with-instagram/
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32 Hookham, M. (2023, March 12). Sports Direct uses facial recognition cameras to catch shoplifters. Mail Online. https://www.dailymail.co.uk/news/article-11849347/Sports-Direct-uses-facial-recognition-cameras-catch-shoplifters.html
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