The physical space, that is the shop, will always be here to enable people to engage and interact.
However what are the challenges for stores to remain relevant in a world that is enticing us to access and be more social online?
Even former Marks & Spencer Chief Executive, Marc Bolland has said, “online has replaced Marble Arch as our flagship store.”
According to a report from Deloitte Digital (2015) that analysed the purchasing habits of consumers, 6.5% of global sales are now digital, where the majority (93.5%) is still offline. Global trade is acknowledged to be over $4 trillion.
So what does the physical shop/store have that the online alternative doesn’t? Let’s pick up our on-going conversation with the Resolution Interiors team, with Claire Aldersley (Design Manager), Laura Burnside (Creative Designer), Nick Flory (Sales Manager) and Pippa Saunders (Marketing Manager).
By 2020 there will be more mobile phones on the planet (6.1 billion) than fixed line subscriptions (according to Ericsson’s Mobility Report), does this mean that we are looking at a retail future that will be driven by the screen in front of us?
Laura dismissed this, “There will always be a need for a physical presence. It forms part of our basic human need. We are programmed to socialise and interact.”
Claire continued this theme, “Engagement with a shop creates a sense of social bookmarking with friends and family. It presents approval, conversation and personal intimacy. You can’t get that online. From a retail perspective, human behaviour is critical to having a better understanding of who our audience is, and how we create the right customer experience”
From both aspects (physical and digital), both have clear delineations. Pippa explained, “They both represent two totally separate feelings. So the emotional slant is key here. For instance, you will never get the same feeling from trying on new outfit in a store changing room and feeling like a million dollars to alternatively clicking a button based on a decision.”
Nick continued this theme of emotion, “Retail (in the physical sense) should encourage and stimulate smell, touch, taste, sound and sight.”
“A shop is so much more than part of a sales channel, it represents a space to engage all our senses, and create a strong sense of desire over riding more rational worries such as cost/need. Online only presents sight and sound, and we find ourselves being more practical – making cost comparisons.”
Retailers must tap into this higher emotional need, inspiring and entertaining customers to provide a reason for people to visit, versus the more convenient and cost effective online option.
Claire commented, “Often smaller independent retailers take hold of an opportunity to open a shop without really knowing who their audience is and undertaking geographical research. Naturally there are a whole host of overheads to consider, even down to in-store music.”
“We cannot rely anymore on town centres to pull people into independent stores.”
“Local independent stores are going to be seen as more of a necessity in terms of a quick purchase.”
Pippa continued, “Customers are more demanding than ever, sometimes it is hard to keep up. With the small stores, understandably there are rates to cover so there is the onus to sell product. Whereas the more established brands are not just about the opportunity to sell per square footage available, but curating an experience.”
“For instance, the physical retail space is evolving. Brands such as Heals are introducing a co-working café to its Tottenham Court Road store. Electronics retailer Sonos have done the same by opening their working space in East London as a music centre and freelance office space for the local community.”
“What we are now seeing are retailers taking responsibility within the spaces that are theirs having a wider appeal to different groups.”
Future success for retailers will be driven by remaining relevant to an audience not just for next season but the next five years.
Laura highlighted, “People go shopping rather than just online as it taps into an emotional response. Top Shop, for instance, provides a social experience so brands have to tap into this and create an environment that serves others by creating amazing experiences that people can’t get elsewhere.”
It was agreed from a Resolution Interiors perspective for retailers to look at the role that they play for others, not just as a means to contribute to sales but creating a deeper feeling with those who come into contact with a brand.
The physical environment brings people together. It enables us to bond with a brand and connect on a personal level either with friends/family or someone representing the shop.
The future success and opportunity is to create a sense of community and be responsible as a hub for others.
When a brand can extract value from its stores for others, the physical space will always be a place to interact, engage and where people feel part of something.
The design and layout of retail space has to support and enable this higher purpose. Multi-use places and flexible spaces will be critical to anticipate the constancy of evolution.