The shop strikes backNew ways of engaging with customers

Tuesday 14 July 2015Shares

As consumers’ behaviours and expectations have changed dramatically, retailers are often playing catch-up in an environment that has seen great change over the past six years.

Whilst the growth of out-of-town centres was a major feature of the latter part of the last century, online shopping has now become the most dominant force. As a result of this the UK domestic market expects a contraction of physical shopping space by 25% in the next 5 years (1).

Online sales totaled £104bn in 2014, up 14% from the previous year, marking the first time consumers have spent more than £100bn online, according to IMRG Capgemini’s e-Retail Sales Index.

However it seems that the much talked about “death of the high-street” has worked as a wake-up call to many high-street retailers and a revival of the high-street can be observed in many areas across the UK. Latest figures show that year-on-year average weekly retail sales increased by 4.8% in January (2). Overall vacancy rates are now at their lowest level since 2010, and reoccupation rates for the high-street are much higher, at 70%, than they are for shopping centres or retail parks. (2)

Is the high-street exploiting the new opportunities created by online shopping better than retail parks and shopping centres? And how are retailers across the board innovating to answer customer’s new expectations and demands? We investigate and exemplify some of the trends taking place.

1. The evolution of Click & Collect

Click and collect is one of the key trends of multi-channel retailing and we believe it is only going to grow in strength. With already 58% of UK consumers saying that click and collect encourages them to visit stores more frequently, the online versus physical argument seems null.

First logical step of a multichannel approach, click and collect services are linking the convenience of online shopping to physical shopping spaces.

Leading this approach is Doddle, the network of station-based parcel shops launched last year by Network Rail, which recently opened its 35th store at London’s Paddington Station. “The company’s outlets allow Internet shoppers to direct their parcel to a Doddle store for collection on their way to or from work, or at the weekend, to avoid missed deliveries at home.”(3)

To support the long-term growth of this service and keep it relevant to fast-changing customer’s expectations retailers are creating improved services, mixing the best from online convenience and in-store experience.

Westfield London’s click and collect hub, equipped with fitting rooms and returns service proves that shopping centres can also dedicate space to increase convenience and service for the time-pressed shoppers, instead of pushing for longer dwell-time.

Perfectly suited to new aspirations for high-quality personal service and ultimate efficiency, start-up WildeRooms is launching a try-before-you-buy service for online fashion that allows customers to order from multiple retailers simultaneously, try on items in a luxury lounge/fitting room, pay only for what they want to keep and let the staff deal with returns.

2. Enhanced experience

We have already observed how successful high-street brands have understood that shopping in physical space is today more of a leisure experience than a necessity. It can be engaging, surprising, beautiful or informative experiences that will attract customers in store.

The Y and Z Generations look for brands that will make them feel unique, while allowing them to share and feel part of a broader community. Nike’s new 550m2 concept store in New Beach, California, mixes new technologies and experiential shopping for its female “athletes”. The store’s studio offers weekly training sessions, allows customers to shop the full Nike range thanks to in-store touch screens, while fitness machines are available to test products (4).

Stores built as a brand showcase are more and more common on the high-street. A recent example is shoe brand Melissa’s Galeria in London’s Covent Garden, displaying its shoes collection in a moving installation, museum-like arrangements and mesmerizing digital art wall. 

Sitting opposite the convenience of click&collect is Italian temple of slow food Eataly. Founded in 2004 in Italy, the concept stores create a story behind the food, with an environment that mixes grocery shopping, eat-in outlets, cooking classes and food theatre. Interactive spaces are also located throughout the immense stores including a mozzarella show, where fresh mozzarella is made every day under the eyes of the clients. Real foodie paradise, Eataly has become a tourist attraction in New York and has major expansion plans for the future.

3. Personalisation and customisation

With service personalisation and product customisation, brands are increasingly offering a conversation with their customers. The younger generation, growing up with social media, is keen on crafting their image, almost a ‘self-brand’. Older generations who have known the days of personalised service and are increasingly digitally-savvy, are also making the most out of the convenience of online shopping. Presented as the “Uber for tailors” American company ZTailors offers an app where old-fashioned luxury service meets new technology. “Customers can book a tailor to meet them at their home, office or anywhere convenient, and the tailor will measure and refit any piece of clothing for a set price. Altered items will be returned to customers within a week.”

If customising the colours and materials of your Longchamp Pliage bag online (mass customisation) does not match your idea of luxury service maybe you will appreciate the sense of exclusivity and unique lifestyle offered in Louis Vuitton’s new Parisian store. The store’s layout feels like an elegant apartment decorated with contemporary art, while product customisation and bespoke services are emphasized, from hand-painted monograms on leather bags to custom-made shoes. For this brand, representing luxury lifestyle in store means that concierge service can answer any customer’s request on site, while a private area, “l’Appartement”, is available for customers to organise private events. (5)

Despite their large scale, shopping centres have also come up with relevant innovations to personalise their shopping experience. Applying the principle of mass-personalisation to the classic food hall format, Westfield Stratford allows each member of a group to pick food from their favourite outlet before sharing a meal together. Westfield FindMyCar touch screen or app, mapping out the way to your parked car, is another innovation mixing extreme convenience and personal service.

Taking its role of “retailers’ host” seriously Westfield is currently testing a new way to function as one single “searchable” multi-brand platform to fit the expectations of consumers used to multi-brand online platforms such as Polyvore, Google Shopping and Asos etc.

‘In Australia, we have a pilot going on that we call ‘Searchable Mall’, where we aggregate product from over 161 retailers that trade physically in our shopping centres, so when a consumer goes to our website, they can basically find a Westfield and then search not only what stores are in that shopping centre, but what products those stores sell, and then map a journey on a digital map to locate that product in the shopping centre.’ (6)

4. Continuous Variety

Recognising that consumers are increasingly able to choose exactly what, when and how they shop, retailers are forced to become more flexible, both with their space and their offer. A flexible offer can be created around a principle such as New York’s store STORY where the product range and decor changes every 4-8 weeks according to a new theme, a new ‘story’, taking “the viewpoint of a magazine” as founder Rachel Shechtman explains.

Flexible space can also take the form of co-branded shops or simply a mix of uses. New York-based company Pelotón is an innovating concept selling exercise bikes with a tablet giving online access to spinning classes. The store is equipped with a spinning studio for classes, showers and lockers, a café and equipment rental service. If this type of shop/gym/social space is still rare we’re noticing an increasing number of brands adding a café area to their store such as Rapha Cycle Club, Jigsaw’s Duke Street Emporium and Regent Street’s Burberry.

Allowing flexibility in content, time and space is the much acclaimed pop-up trend.  We’ve seen major brands and large shopping centres jump on the bandwagon. From Trinity Leeds ‘Kitchen’ carefully selecting street food vans to appear temporarily indoors, to pop-up mall BoxPark planning a new site in Croydon.

But is pop-up still a valid format for retailers and owners? We believe so, provided that it is used as in a creative way. As Appear Here boss Ross Bailey explains, pop-ups are about being somewhere at the right moment and disappearing before people get bored. Pop-up is an interesting format provided that they do not rely solely on their temporary nature. They can be used in a variety of ways, to test the market for a new product, to connect to a moment (think World Cup, cocktail week etc.), as a brand showroom (e.g. House of Peroni) or to create real-world relationship with customers for online retailers. Retail today is about having a great story to tell, offering a great service and a memorable experience, no matter what the medium is.

Author: Pauline Sabatini


Read about recent immersive retail pop-up experiences at Westfield here

Our other perspective retail articles can be found here and here