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Three Concepts Expected To Emerge In The Future Retail Store

12/15/2021
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This article originally appeared in Forbes.

The fundamental role and purpose of retail stores are changing. Digital transformation has forced bricks-and-mortar outlets to evolve as more of the path to purchase has shifted towards online channels. Now, as e-commerce expands, retailers are reimagining the functionality of stores and tapping into digital tools to keep those stores relevant.

Physical retail will remain the largest and most important channel for the foreseeable future, but how space is leveraged will transform. In Euromonitor International’s recent Commerce 2040 virtual event, Jason Goldberg, Chief Commerce Strategy Officer at Publicis, noted that stores are no longer a singular touchpoint in the shopping journey; now, stores play several roles, becoming platforms that serve multiple missions and stakeholders.

Retailers are increasingly reducing their footprint entirely or using physical outlets to support online fulfilment operations or branded experiences. Personalised, immersive and collaborative concepts will advance the store experience of tomorrow.

Check in before check out

A hallmark of the future store will be identifying the customer at check in rather than check out. Historically, stores have not been equipped to detect the identity of a shopper until payment, limiting the ability to personalise in-store shopping trips.

In the future, facial scanning will recognise customers upon entry, enabling retailers to tailor the in-store experience based on personal information and purchase history. As of 2021, one third of global digital consumers are open to companies using facial recognition software to personalise in-person interactions, according to Euromonitor International’s Voice of the Consumer: Digital Survey. This sentiment is strongest among younger cohorts - 40% of millennials are comfortable using this technology to power more personalised interactions. Leveraging facial recognition across the store will allow associates to assist consumers with product choices in the context of what they own, for example.

Experiential ticket entry

Retailers will leverage technology to remove the inconvenience of shopping for mundane items while tapping into the innate desire and curiosity to test and try before buying. For products that require greater consideration, such as furniture or electronics, physical retail will shift from stores where products are sold to a stage for immersive brand experiences.

In recent years, consumers have adopted a minimalist mindset, prioritising experiences over continued accumulation of products. In fact, 46% of global consumers would rather spend money on experiences rather than things, and this percentage has increased 10 points in the last five years, according to Euromonitor International. Creating unique engagements has the potential to generate new revenue streams. For example, consumers could visit a sports-themed experiential centre and compete against top athletes in an alternate reality experience. Retailers looking to capitalise on this concept will need to create a playground-like atmosphere that ensures the experience matches the price tag.

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Community collaborations

Bricks-and-mortar outlets can become places where store associates and consumers come together to design and co-create products. This in-store experience will emphasise onsite product customisation for the end-consumer. Shoppers may be able to choose specific colours or textures for shoes, clothes or accessories to create the ultimate one-of-a-kind product.

Retailers that focus on community collaborations could also drive sustainability and target values-based buyers. Globally, 32% of consumers will buy from brands that support social and political issues that align with their values and 27% will go so far as to boycott brands that do not, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2021. This store concept presents the opportunity to bring consumers, employees and local experts together to collaborate on circular projects that repair or upcycle previously purchased items.

image9eoff.png“The store will become more of a hub of a community in the future,” Emily Xu, chief marketing officer of Mitchell Gold + Bob Williams, said during Euromonitor International’s Commerce 2040 virtual event. Xu noted that this type of in-person experience can teach consumers about concepts such as sustainability.

The retail store of tomorrow

Stakeholders operating across retail need to reconsider long-term strategies. While the first wave of digital disruption was linked to how stores could compete with e-commerce, this next wave will be about integrating and uncovering synergies. Data will be key to providing the necessary business agility to do so.

“If you cannot move quickly on the real-time prescriptive recommendations that are coming to the store or restaurant, it is all for naught,” Barry Thomas, head of international customer marketing and future of commerce at The Coca-Cola Company, emphasised during the aforementioned event.

In the future, retail outlets will be multidimensional, with stores simultaneously operating as transactional, fulfilment, engagement and branding spaces.

Watch Euromonitor International’s Commerce 2040: The Future of the Store in a Digital World event to explore how evolving consumer expectations, new competitive realities and the accelerated digital transformation will impact the future of the store.

 

 

 

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