The Language of Luxury
The Language of Luxury
Steeped in tradition, true luxury brands are admired for their dedication to incomparable quality and craftsmanship. They are leaders in white-glove customer service and bespoke shopping experiences. But to rise above the noise of today’s digital marketplace, they need to pair their rich heritage with the latest in digital innovation.
According to Statista, an estimated 25% of global luxury goods sales will be made online by 2025. Today’s brands must keep up with the technologies and trends that customers have come to expect, from mobile-first web design to a frictionless checkout process. For high-quality – and high-priced – luxury goods, customers expect even more. Luxury brands must differentiate themselves by transforming the highly curated, ‘white-glove’ experience of their brick-and-mortar stores into immersive high-tech online brand experiences.
Stewards of luxury brands need to understand the three core levels of ecommerce: user experience-driven eCommerce features, end-to-end bespoke customer experience, and brand storytelling.
These levels build on each other to create recognition, drive online sales, and provide the premium experience customers come back for again and again. By taking advantage of the three levels, innovative luxury brands can become leaders in the digital marketplace. The brands that rise above will be the ones that understand that the digital experience is part of the luxury.
User experience-driven ecommerce features
Robust technology and user-friendly interfaces are the foundation of excellent ecommerce. For customers exploring and purchasing luxury goods, the experience must be seamless. Slow site speed and loading times, disjointed checkout flows, and awkward personalization can frustrate customers. Trust plummets and so do conversion rates. When implemented well, ecommerce platforms create an effortless and meaningful shopping experience.
The best platforms include flexible and robust features. They enable seamless integration with analytics, data management, and the latest third-party tools – including future-forward technologies such as metaverse connectivity and virtual reality experiences. Coupled with highly customizable personalization features, a carefully designed ecommerce platform can provide the end-to-end white-glove service that complements the in-store luxury experience while seamlessly scaling to support growing product lines and global audiences.
The creation of high-quality online luxury experiences has helped to refine and advance the luxury brand industry online. For example, Fraser Hart is one of the UK’s leading jewelers, specializing in bespoke jewelry and unique, individualized ring customization services since 1936. They needed to reimagine their online digital presence, and in doing so, address several technical challenges: improving site speed and reporting processes; supporting their growing global audience; and capturing their unique product catalog across all devices.
Fraser Hart worked with BORN Group to determine the best digital solution and deliver a world-class customer experience across all Fraser Hart’s products and services. The new site enables a high-quality, unified digital experience across devices. It includes best-of-breed localization features that empower shoppers regardless of their region. Strengthening the connection between their digital and physical presence, the new platform also helps to centralize stock-level management between stores and improve internal merchandising. The design overhaul integrated many unique features of the platform to bring Fraser Hart’s mission of tailoring jewelry to the individual to life. The new design and underlying technology empower a level of personalization and merchandising that the brand had not seen before. Coupling BORN’s design prowess with an upgraded eCommerce platform, Fraser Hart’s new digital presence enabled its audience to experience the luxury of the brand outside of the store, converting and delighting more customers in this new digital space.
End-to-end bespoke customer experience
A strong digital platform enables a strong customer experience. For luxury brands, the customer experience is part of the luxury. Customers who expect white-glove, individualized customer service in physical stores expect the same in the digital space. From the customer’s first glance at the website to the post-purchase emails they receive, every interaction must delight and resonate with them. Customers expect that the messaging and services will cater to their needs and wants.
A customer-centric, high-quality, end-to-end customer experience relies on a deep understanding of the audience. User data, research, and emotional intelligence — leveraged to evaluate, understand, and influence emotions — can help. This consumer knowledge helps brands deliver the right message, at the right time, through the appropriate channel. Brands can approach their audience in a way that resonates on a deeper level. This is particularly important for luxury brands, where emotions play a key role in purchasing high-quality, high-cost, or bespoke luxury goods.
Engaging with an emotionally intelligent brand tailored to fit the customer’s needs makes them feel like they’re part of the experience, not just part of a transaction. For generations, the oldest clothing retailer in the United States, Brooks Brothers has been a timeless choice for shirting, suiting, and more. As the breadth and depth of their offerings evolved, they sought out ways for customers to see them as “far more than a store.” BORN overhauled Brooks Brothers’ ecommerce site, redesigning and customizing content to educate, guide, and engage users in the right place at the right time in the customer journey. Part of this work involved customizing the product detail page with “buy online, pick-up in-store” capabilities. This helped to create a more seamless experience between the digital and physical paths in the customer journey. For the shirt-buying experience, the team redesigned the product listing page with filters to direct customers to “their” perfect shirt, amplifying the individualized touchpoints throughout that purchasing flow. In addition, the team also focused on the loyalty rewards and redemption pages. The redesign aimed to inspire excitement, loyalty and repurchasing. BORN’s redesign of key touchpoints in the end-to-end customer experience helped to strengthen customer relationships with the brand and to encourage their return to the Brooks Brothers experience.
Brand storytelling
Storytelling is the thread that ties the customer experience together. Marketing through storytelling is a powerful strategy to help luxury brands stand out in the flood of online retailers. With their heritage, history, and strong values, luxury brands have strong stories to tell. The key is to tell the brand story throughout the customer’s digital journey, by infusing every touchpoint with the brand’s voice. Successful brand storytelling can be used to build a community of customers who share similar values. Brand storytelling is a way to demonstrate values in an authentic way. Today, people prefer companies that have strong values that align with their own. Studies show that, if cost and quality are equal, more than 70% of customers prefer to buy from a purpose-driven company. The social issues that a luxury brand supports (such as sustainability and ethical resourcing) amplifies its values and brand story. While product and service quality are paramount to a luxury goods brand, it is their story that resonates with its audiences— it builds deep connections, encourages loyalty, and ultimately drives ongoing engagement.
Storytelling is a valuable part of a luxury brand’s digital presence – and the foundation of BORN’s approach to luxury brand design. Since 1860, Frette has produced linens and home furnishings of unparalleled quality, and this rich heritage forms the base of their story. Frette recently approached BORN for a complete site redesign and re-platform. BORN worked with Frette to gain a deep understanding of the nuances of the brand and its product offerings. Leveraging this knowledge with their expertise in the luxury space, BORN infused Frette’s brand essence and heritage throughout the site re-design. The new design integrated content-rich stories featuring designers and inspiring interiors, highlighting the brand’s values alongside customer-centric messaging. Updated content was designed to educate consumers on Frette’s craftmanship, product quality, ongoing innovations, and time-tested partnerships. The finished web design was a Platinum Winner at the dotCOMM Awards. Integrating brand storytelling throughout the end-to-end customer experience, BORN helped to position Frette as the global authority in fine handcrafted linens.
In the digital world of luxury brands, every digital experience touchpoint should bring surprise, delight, and a reaffirmation of the renowned and timeless quality of the brand. BORN’s digital-first approach combined with the richness of luxury brand storytelling helps bring the in-store experience online, seamlessly. With customized ecommerce implementations, end-to-end customer experience design, and brand storytelling, BORN helps luxury brands deliver luxurious digital experiences.
The Role of Emotional Intelligence in e-commerce
The Role of Emotional Intelligence in e-commerce
Shopping is a highly emotional experience. Studies reveal that emotional impulses drive up to 95% of purchasing decisions.1 The products and services we buy influence how we feel. As society emerges from the pandemic and online shopping continues to flourish, consumers desire a personalized shopping experience where they feel understood. In response, retailers must develop emotional intelligence to attract and retain customers.
Emotional Intelligence Drives Sales
Emotional intelligence refers to evaluating, understanding, and controlling emotions. There is an immense payoff when companies connect with customers’ emotions. Customers who like the companies they do business with are more likely to continue to buy. Additionally, 78% of loyal customers recommend favorite brands and products to friends and family.2 Therefore, retailers must develop emotional intelligence to create a retail experience that is in tune with the feelings of their customers. Harnessing the power of emotional intelligence gives retailers the ability to target customers at the right time, through the appropriate channel, and approach them in a way that resonates on a deeper level.
Customer Experience is the New Battlefield
In today’s highly competitive market, conventional business wisdom is not enough to succeed. With countless online retail sites, it is increasingly difficult for brands to differentiate themselves. Creating an emotionally intelligent brand with an optimized website makes customers feel like part of the experience, not just part of a transaction.
For customers, it is critical to feel prioritized by the brands they consume. Research shows that 86% of buyers will pay more for a great customer experience.3 This sentiment has increased the need for brands to take their marketing and websites to a new level by incorporating empathy and emotional intelligence into digital experiences and customer communications.
Emotional Motivators
As eCommerce companies craft their websites, they must remember that customer purchases are inherently driven by emotional responses. A study by the Harvard Business Review studied customers’ interactions with hundreds of brands across all categories. It concluded that more than three hundred “emotional motivators” influence consumer behavior.4 Learning which emotional motivators lead to sales help brands strategically target the feelings that motivate customers to make purchases. These motivators provide retailers with valuable insights that can be applied when designing and improving a company’s products, services, and retail site.
Broaden Customer Reach through Digital Channels
Brands must be accessible to their customers on the internet and through their smart devices in this digital age. Tech companies like Amazon, which offer a hassle-free experience and expedited shipping, have encouraged some consumers to skip in-person shopping altogether. To compete with the convenience of retail giants like Amazon, Retailers must focus their attention on developing emotionally intelligent websites to win over shoppers and drive sales. Data shows that 86% of customers with high emotional engagement want access to a brand through numerous channels.5 Brands must become both emotionally and digitally intelligent so customers return for the experience as well as the product.
Multiple Payment Options Increase Sales
For a business to succeed, it is critical to offer easy and convenient ways for customers to pay. Providing customers with multiple payment options encourages sales. While credit cards are still the dominant online payment form, accepting alternative payment methods such as PayPal, debit cards, and cryptocurrencies maximizes sales. According to a study by PPRO 42% of consumers in the U.S. say they would not follow through with a purchase if their preferred payment method is not available.6 Retailers can also offer deferred payment through Buy now, pay later platforms that make purchases more achievable for some customers. Providing as many choices as possible allows customers to choose the way that works best for their needs at the time.
Building Trust
There is a significant connection between trust and closing a sale. To build trust, retailers should include extensive contact information on their website, provide chatbots, FAQs, and call center phone numbers to answer customer questions, and display customer reviews prominently. Online consumers rely on reviews when making purchasing decisions. Studies show that 93% of customers read reviews before buying a product.7 Additionally, retailers should promise shoppers a safe and secure checkout that protects them from fraud.
Incentive Programs
Customer loyalty is essential to growing a business. Repeat customers are extremely valuable to brands. Research shows that 70% of emotionally connected customers spend twice the amount when they are loyal to a brand.6 Retailers operating in markets with multiple competitors can set themselves apart from the competition by developing loyalty programs. Creating a customer loyalty program helps incentivize customers to become repeat customers by providing rewards for making repeated purchases. Discounts, rebates, rewards, free merchandise, and coupons motivate customers to spend more with brands and reinforce the consumer/brand connection. Focusing on loyalty programs helps brands align themselves with the segment of their customer base spending the most and deepens the relationship.
Consumers are looking for digital retail stores to go the extra mile and cater to their needs. Approaching the customer experience with emotional intelligence is necessary to drive sales and win repeat customers. Personalizing sales techniques to fit customer needs, being transparent and helpful, and creating incentives to encourage customers to be part of a digital community will drive sales and lead to future purchases. Building websites that connect with the emotions of their customers will lead to a significant return on investment.
Footnotes:
2)https://www.semrush.com/blog/word-of-mouth-stats/
4)https://hbr.org/2015/11/the-new-science-of-customer-emotions
6) https://www.volusion.com/blog/why-accepting-multiple-payment-methods-is-vital-for-ecommerce-success/
7) https://www.shopify.com/blog/15359677-why-online-store-owners-should-embrace-online-reviews
Building eCommerce For The Greater Good
Building eCommerce For The Greater Good
As eCommerce reshapes the modern marketplace, many shoppers are spending more time and money online, leading eCommerce to grow, with sales expected to reach $5.5 trillion in 2022.1 The accessibility of online shopping and the growing use of digital payment options have resulted in a dramatic shift in consumer shopping habits. While there are advantages to expanding online, the rapidly changing landscape has also created financial, economic and social benefits.
eCommerce Encourages Entrepreneurship
The eCommerce industry encourages entrepreneurship by reducing start-up costs. An eCommerce site can be launched for as little as $1,000, depending on the necessary features for business.2 Whereas a significant amount of time and money is needed to open a physical store, an eCommerce store can be operational in just a few short weeks or days. Fewer barriers to start and a more significant market share encourage businesses of all sizes to compete. As more retailers enter the marketplace, sustained growth and competition lead to more innovation and online experiences. To keep customers coming back, retailers must focus on the customer experience and create compelling products that stand out. This focused attention helps attract new customers and incentivizes current customers to return to online shops, driving economic growth.
Widely Available Goods and Services
Businesses can connect with customers through online channels and have far greater reach than physical stores. It’s estimated that 2.14 billion people worldwide, roughly a quarter of the world’s population, will make an online purchase in 2022.3 ECommerce ensures customers can find everything they need in one place. Without the limitations of a brick and mortar store, online retail stores can offer a greater number of products to their customers. In addition to increased purchasing options, customers can browse and make purchases at their convenience. Online stores enable customers to spend their time shopping instead of driving to physical stores or waiting in long lines. Online stores are always open and provide 24/7 access to vital goods and services. Secure payment options, including digital wallets, credit or debit cards and crypto, facilitate payment and encourage sales.
More Affordable Products
The increasing number of online storefronts has resulted in competition among retailers to provide the best deal to consumers. This gives consumers the ability to compare prices and quality. Additionally, lower operating costs allow online retailers to sell products for less than traditional retailers. The demand for certain products encourages companies to create more affordable alternatives. With so many online options, consumers can find products at their desired price point, encouraging even less affluent customers to shop. Retailers can also offer deferred payment through Buy Now, Pay Later platforms that make purchases more achievable for customers. Giving customers the option to pay later can boost sales by making larger purchases more obtainable.
A Lifeline During Uncertain Times
A key benefit of online retail is that it is a lifeline for businesses and customers during turbulent times. As the world went into lockdown in response to COVID-19, commerce habits shifted to online purchasing. Shortages of essential items on store shelves resulted in many customers turning to eCommerce. Online shopping boomed because it was a safe and viable option to obtain necessary items. Companies that focused their efforts on online selling were more likely to survive and grow. Expanding their online presence also meant some businesses could continue to provide jobs to workers during a period of record unemployment and uncertainty.4
Career Opportunities
The growth of online retail translates to increased career opportunities. According to the data and analytics company GlobalData, the number of eCommerce jobs has increased by 180% from September 2020 to September 2021.5 Jobs in marketing, sales, design, web development and IT positions are vital to keeping an eCommerce company operating. While online websites automate many processes, the human element cannot be eliminated. Talented IT professionals are necessary to create and keep websites up and running, while creative sales and design teams contribute content to educate and connect with customers. Lastly, skilled customer service departments are necessary to handle customer queries.
Why Should Businesses Care
The eCommerce industry has revolutionized commerce worldwide. Entrepreneurs can now set up shop easier than ever, providing new opportunities. The increased number of online retailers has generated more diversity in goods and services, which helps keep costs manageable. During times of uncertainty, eCommerce offers a lifeline that enables consumers to find much-needed supplies. Businesses that shift to eCommerce can continue to expand while helping the greater good by providing employment, goods and services to everyone.
Footnotes:
1.https://www.emarketer.com/content/global-ecommerce-forecast-2022
2.https://www.bigcommerce.com/articles/ecommerce/ecommerce-cost/#conclusion
3.https://www.oberlo.com/statistics/how-many-people-shop-online
The Future of Retail Part III: Navigating Today’s New Landscape
The Future of Retail Part III: Navigating Today’s New Landscape
We conclude our three part exploration into our future relationship with retail and how do we navigate this “new Normal”.
Stores And Malls Will Need To Rethink Existing Spaces
Before the pandemic the US had the most retail square footage per capita in the world, but now with more people shopping online, retailers don’t need such an abundance of store space. Walmart have created automated fulfilment centers in some of their larger outlets, while in the UK both John Lewis and Marks and Spencer announced plans to downsize their flagship Oxford Street stores and convert entire floors into office space. It’s likely that other large retailers will follow suit, either entering partnerships to share space with other brands or local businesses, selling off space, or finding other uses for it, concentrating on tech-enabled service and online ordering, rather than having huge amounts of stock on site.
As stores like Macy’s and Sephora steer away from new mall openings and test stand-alone stores instead it seems like malls will also have to find new purpose.1 Their future again is likely to be mixed use, with office space, gyms, warehouse space, entertainment venues and more. Who knows, in the future maybe that ugly out-of-town mall will devote some of its space to becoming a market garden.
Local Produce, Digital Fashion and Re-use Goes Mainstream
It’s not just local neighbourhoods that will see an increased focus but local products too, driven by ethical and environmental considerations but also perhaps by practicality. After years of globalization, the world has been experiencing a supply chain crisis caused by an endless list of problems: Covid, trade tensions between the US and China, the Suez Canal blockage, rising shipping costs, a shortage of truck drivers, and in the UK’s case, Brexit.
Some may scoff but digital fashion is another growing area, giving brands an opportunity to interact with customers at home who can show off their items online. Balenciaga have created digital fashion for Fortnite.2 Farfetch are gifting influencers in digital garments from pre-order collections, saving on shipping costs and gauging interest before investing in stock.3
The impact of consumption on the environment is increasingly on consumers’ minds, and It’s likely that resale options will move further into the spotlight. IKEA are already offering a buy-back service, finding new owners for resale goods in their ‘bargain corner’, while the original owner gets an agreed value loaded to a card they can spend in the store.4 FarFetch and Zelando have also added pre-owned sections to their online businesses.
Conclusion: New Opportunities For Retail In A Time Of Change
All the above paints a complex picture. Change is happening in every aspect of the retail landscape. Consumers and retailers will need to get adjust to the ‘new normal’: where online shopping is an efficient way of meeting needs, but physical shopping is a treat, where we shop locally but the big platforms become bigger, where retailers need to build their operations on agile technology platforms that connect every aspect of their business from inventory to marketing.
It’s been a strange and worrying time, but now more than ever there is a chance to make changes that not only keep online and physical retailers afloat, and consumers supplied but that create a low-carbon future that protects the planet. Yesterday and today has brought much turmoil, but there’s no reason we can’t be optimistic about tomorrow.
- Labour To Scrap Business Rates and Replace With A Fairer System, Labour, https://labour.org.uk/press/labour-to-scrap-business-rates-and-replace-with-fairer-system/
- High Digital Fashion Drops Into Fortnite With Balenciaga, Epic Games, https://www.epicgames.com/fortnite/en-US/news/high-digital-fashion-drops-into-fortnite-with-balenciaga
- Vogue Business, Influencers Are Wearing Digital Versions of Physical Clothes Now, https://www.voguebusiness.com/technology/influencers-are-wearing-digital-versions-of-physical-clothes-now
- A Circular Economy Starts With A BILLY Bookcase…Or INGO Table, Or NORRARYD Chair, Ikea, https://www.ikea.com/gb/en/this-is-ikea/sustainable-everyday/buy-back-and-resell-service-pubcc071810
We Have Reached Cruising Altitude: Why Airports Need To Elevate Their Experiences
We Have Reached Cruising Altitude: Why Airports Need To Elevate Their Experiences
Airports are undergoing an evolution to improve the customer experience and generate profits. Realizing their potential to be more than just travel hubs, airports are exploring innovative ways to make guests feel safer, provide unique shopping experiences and make time in the terminal more meaningful. Imagine a space similar to a lounge or upscale shopping mall where travelers can relax, eat, drink and shop as they wait for their flights. Airports can provide a personal and stress-free experience through physical and virtual interaction based on passenger data. Deeper engagement made possible through digitalization and modernized infrastructure would allow airports to improve relationships with travelers.
Improving Airport Infrastructure
The airport experience should be an enjoyable part of the journey rather than a processing station getting passengers to their destinations. Though many airports around the country are dated and offer limited shopping and dining options, there is a renewed focus on updating existing infrastructure as travelers return to airports following the COVID-19 pandemic. In 2021 the U.S. Department of Transportation released US$76 million in grants to upgrade airport infrastructure. Although the offerings apply to only three U.S. airports right now, these are just the first of a series of more than 1,500 grants that will infuse US$3.2 billion into hundreds of airports around the country.1 Even without the grants, many cities are reimaging existing facilities to support an ever-growing number of travelers.
Focus On Health And Safety
In addition to improving airport facilities, lessons learned from the COVID-19 pandemic play a significant role in enhancing customer experience. Features such as automated passenger processing and touchless services have become increasingly popular. Passengers also desire a sense of space instead of overcrowded lines and limited seating. Airports, including Changi, are implementing bright colors, natural lighting, and large open spaces.3 With a focus on health, contactless TSA checkpoint entry and more open spaces have already begun changing the passenger experience.
Improving The Customer Journey With Data
Airports can provide a more enjoyable customer experience by better understanding the movement of passengers through their airport journey. Data from WiFi, cameras, people counters and other data sources provides real-time information about movement, occupancy and standing time in various airport areas.2 These insights can help airports optimize staff schedules, reduce waiting times, reduce stress and encourage spending in retail locations. Additionally, data collected from guest WiFi networks enables targeted marketing from nearby retailers to be sent directly to passengers for an increased chance of making a sale.
Business Opportunities In Travel Retail
Modern airports recognize the critical economic role of travel retail for growth and development. They have the advantage of a captive audience looking for ways to pass the time. Airports offer brands an opportunity to maximize visibility and customer engagement. While most retail has shifted transactions and fulfillment online, physical airport storefronts can provide strong customer interaction.3 These retail spaces can display products and engage with customers in meaningful ways to aid in conversion and retention. By creating personalized and unique experiences, brands can expect further engagement and sales after customers leave the airport.
Aligning Luxury With Everyday Products
Airports are undergoing renovations by designing footpaths and atriums to maximize exposure to retailers. Mass-market and luxury retailers are now joining popular duty-free stores, newsstands and gift shops. High-end luxury retailers see airport storefronts as a way to market their products to international audiences and generate more sales. According to Allied Market research, airport retail sales are expected to top US$40 billion by 2027, with perfume and cosmetics leading the way, then wine and spirits following.4 Luxury retailers have a massive potential for profit by opening shops within airports and targeting travelers who are shopping to pass the time.
Technology And Automation
Nowadays, most brands generate sales through digital marketplaces, and it’s the same for airport retail. However, airport storefronts benefit most from digital marketplaces that enable remote ordering and automated check-out. Currently, retail giant Hudson Group is testing Amazon’s Just Walk Out technology in select locations. These Hudson locations allow customers to tap a credit card on entry, pick out items, and exit, all while avoiding check-out lines.5 Automating the process allows for easy transactions and reduced labor costs. However, retailers must have a robust digital marketplace to handle all transactions. During the 2020 Black Friday holiday, customers spent US$160 million shopping on digital marketplaces powered by Mirakl, which maintained 100% uptime, showing the importance of having strong technology as demand increases.7 It’s also about using a combination of technology that gives retailers an edge. Other providers, including FetchyFox, offer intuitive digital marketplaces that enable speedy contactless shopping and features artificial intelligence (A.I.) for data collection.6 Using a digital marketplace with automation and data capabilities will help airport retailers keep up with demand and modernize their business strategy.
The Future Is Now
Airports worldwide are starting to elevate the travel experience. As COVID-19 fears are dissipating, passengers are eager to travel, and airports are busier than ever. Government funding is being used for improving infrastructure and health safety. Passengers want fewer crowds and more open spaces to relax while waiting for departures. They also want to shop, and the time-honored tradition of duty-free isn’t going away. In fact, airport retail is growing faster than ever and now includes high-end luxury brands. However, the traditional storefront is changing, and customers can now shop from digital marketplaces that offer more options, automation and no lines. This is the time for airports and consumer brands to join forces to create an unbelievable experience for everyone.
Footnotes
2)https://skyfii.io/blog/how-data-can-help-convert-an-airport-passenger-into-a-retail-customer/
The Future of Retail Part II: Retail as an Experience
The Future of Retail Part II: Retail as an Experience
We continue our exploration of the current and future shape of retail around the globe as brands commence the lengthy road of recovery for some and normality for most.
What will the new retail landscape look like? Now that the wide scale lockdowns are mostly over, supply chain issues and staffing woes still abound, hampering a return to retail as we knew it. How will brands adapt to these new consumer behaviors and are they here to stay? Read on.
Physical Stores Still Have Their Place
Despite the normalization of online shopping and home delivery during lockdown, many consumers were counting the days before they could walk through the doors of physical stores again. Tomorrow’s retailers still need to win hearts and minds in the real world and shouldn’t give up all their store space just yet.
One of the reasons for this might be just how much people love browsing. Shopping online tends to be goal-based and transactional, but people browse in-person not only because they need something, but because they enjoy it. A study by Michael Guiry,1 Associate Professor of Marketing at West Chester University of Pennsylvania, suggests that for some of us shopping forms part of our self-concept, cementing, and playing back, our ideas of who we are. Although customers appreciate the best efforts of online retailers in creating browsing journeys, they are still only a facsimile, lacking in the excitement and sensory details that are so much part of the experience in real life.
For all the news headlines on the rise and rise of online shopping, most retail is still taking place in physical spaces. In the US, by February 2021 it had settled at around 15% of sales.2 And although many retailers have closed branches and reduced shoppable space they’re unlikely to get rid of it completely. The digital and physical stores of the future will have a symbiotic relationship, with digital driving footfall to physical stores that support online sales.
A Future Of Experiential Retail
Real-life shopping at its best isn’t just about making a transaction, it’s about entertainment, about entering a different space and socializing with friends, family, and community. Physical retailers can offer many of the things we’ve all missed during the pandemic: the excitement of new discoveries, human connections, personal service, sensory moments. These experiential retail experiences, powered by new technologies, will be center stage in the next couple of years as retailers try to tempt consumers back, and with footfall likely to be reduced, they will be looking to squeeze every drop of value out of the customers who come through the door.
For example, Nike, always ahead in experiential experiences, have launched Nike Rise in Guangzhou, China and in Seoul, South Korea: technology-driven retail hubs that work with the Nike App to create experiences powered by customer data.3 Dick’s Sporting Goods in the US opened its biggest-ever store in the spring of 2021 in a bid to drive deeper engagement with customers. The ‘House of Sport’ site in Victor, New York includes an indoor rock-climbing wall, golf driving bays and a putting green, as well as a health and wellness shop and a track and turf field.4
In London, with the pandemic still on everyone’s minds, Lush’s redesign of its Oxford Street store includes tech innovations imported from its Shinjuku store, with QR codes and video displays creating an interactive experience that doesn’t have to be hands-on – no mean feat for a cosmetics retailer.5 Meanwhile, shopping mall Westfield London is launching Situ Live, a ‘discovery playhouse’ where customers can try out new products.6
In the post-Covid world, retailers will be looking to use technology to examine footfall, drive sales and create new customer experiences. LiDAR technology uses infrared light to sense movement, meaning that retailers can measure footfall and dwell time as well as analyzing the success of visual merchandising and customer engagement, tracking individuals with no loss of privacy as only an outline is ever recorded. Simultaneous Localization and Mapping (SLAM) technology can help anyone with a smartphone navigate around a mall, but it can also be utilized by furniture retailers. IKEA’s newly revamped IKEA Studio app not only enables the user to see a chosen piece of furniture in situ in their home, it allows them to redesign the entire room.7 In-store QR codes can provide product information, special deals or an easy way to buy online in a bid to lessen the practice of ‘showrooming’, i.e. looking at goods in physical stores before buying them at a lower price from an online competitor.
Local Shopping For Local People
Repeated lockdowns and the shift towards home working has meant a new focus on shopping locally. In the UK the number of independent stores grew in the first half of 2021 for the first time since 2017,8 able to take advantage of government support measures, such as business rates relief and furlough schemes, as well as deals on rent offered by landlords keen to fill spaces vacated by failing chain stores.
There’s an opportunity for local main streets to evolve to serve new needs: a return to the times before out-of-town malls and retail parks. Even before the pandemic, city planners across the world including Paris, Barcelona, Portland, and Melbourne were responding to climate change by encouraging ‘15-minute cities’, creating blocks where people can access all their everyday services within a short walk or bike ride, reducing traffic and pollution and creating more space for trees.9
Larger chain retailers are already responding to new patterns of hybrid working. In the UK Sainsbury’s has recently announced a new partnership with Itsu, Leon and Wasabi, trialling ‘lunch stands’ across 300 stores, aimed at consumers working from home or in the office. Sainsbury’s Food for Later category planner Frances Hughes said: “As a hybrid style of working becomes more normal, we’ve been working hard to analyze customer needs when it comes to their lunchtime meals…the introduction of the in-aisle lunch stand makes it easily accessible for anyone to pick up an affordable and balanced meal, no matter what your daily ritual is.”10
Downtown Areas Need New Purpose
Downtown areas that were once busy with office workers are significantly quieter since the pandemic. In the future they will need to find new reasons to attract visitors and fill space, with shops, grocery stores and restaurants alongside medical centers, community, leisure, housing and workspace.
There needs to be a greater emphasis on flexibility and sharing, finding purpose for underused spaces, and providing the amenities that communities need, supporting small businesses, creatives and social enterprises who might otherwise find it impossible to have a physical presence. And it’s the perfect time for experimentation, finding out what works as we move into our post-pandemic future. In some ways the lasting effects of Covid could give a new lease of life to physical retail locations that had been declining over the years.
But it’s not just down to stores and other businesses to create the successful downtown shopping areas and main streets of the future. Governments and landlords will need to work with them to create areas suited to local communities and their changing needs. They also need to relook at rates and rent models that have decimated businesses unable to operate during lockdown. The alternative is yet more businesses going under, boarded-up shops and the hollowing out of retail areas. Some landlords have already offered their retail tenants turnover-based rents in a bid to save main streets. In the UK, the government are under pressure from within their own party to reform business rates, and the opposition Labour party has already announced their wish to scrap them in favor of a new system that increases the digital services tax on tech giants.11
Footnotes
- Defining And Measuring Recreational Shopper Identity, SpringerLink, https://link.springer.com/article/10.1177/0092070305282042
- State Of Retail, National Retail Federation, https://nrf.com/topics/economy/state-retail
- Nike’s Latest Retail Concept Powered By The Pulse Of Sport, Nike News, https://news.nike.com/news/nike-rise-retail-concept
- Dick’s Sporting Goods Just Opened A Massive Store With A Virtual Driving Range And Outdoor Track. Here’s A Look Inside, CNBC, https://www.cnbc.com/2021/04/09/dicks-sporting-goods-new-store-has-a-driving-range-and-outdoor-track.html
- In Pictures: Lush Oxford Street Reopens With Innovative Global Concepts, The Industry.Fashion, https://www.theindustry.fashion/in-pictures-lush-oxford-street-re-opens-with-innovative-global-concepts/
- “It’s Not A Store, It’s A Venue”: How Situ Live is Transforming The Way We Shop, Charged Retail Tech News, https://www.chargedretail.co.uk/2021/05/19/its-not-a-store-its-a-venue-how-situ-live-is-transforming-the-way-we-shop/
- IKEA’s Fancy New App Lets You Design Entire Rooms, Wired, https://www.wired.co.uk/article/ikea-studio-ar-app
- Independent Retail Sector Returns To Growth, Drapers, https://www.drapersonline.com/news/independent-stores-benefit-from-chain-closures
- The 15-Minute City – No Cars Required – Is Urban Planning’s New Utopia, Bloomberg, https://www.bloomberg.com/news/features/2020-11-12/paris-s-15-minute-city-could-be-coming-to-an-urban-area-near-you
- Sainsbury’s Launches News In-Aisle Concept With Over 20 Lunch Meals, The Grocer, https://www.thegrocer.co.uk/sainsburys/sainsburys-launches-new-in-aisle-concept-with-over-20-lunch-meals/660142.article
- As Macy’s and Sephora Flee the Mall, Will Other Retailers Follow?, The Motley Fool, https://www.fool.com/investing/2020/02/13/as-macys-and-sephora-flee-the-mall-will-other-reta.aspx
