INSIGHT

The pandemic has changed the way we shop and accelerated the shift to ecommerce globally.

 

US ecommerce grew by 30% in 2020, while UK online sales volumes increased by 46% between May 2019 and May 2021.

 

Some APAC markets are seeing even more rapid shifts towards ecommerce: retail sales in China are set to reach $2.8 trillion in 2022 – with ecommerce sales accounting for an estimated 50% of total retail sales and are expected to reach 55% by 2024.

 

But this doesn’t signal the end of in-store shopping. Forrester projects that 72% of US retail sales will still take place offline in 2024.

 

Research from Wunderman Thompson shows that physical stores are still important to consumers: 

 

62% of global consumers think it’s important for brands to have a physical store vs. 51% last year, and 64% prefer to shop with brands that offer both online and in-store services.

 

So how are retailers attracting shoppers back into their stores and how is the retail environment adapting to changing needs and behaviours following the pandemic?

STRATEGY

Retailers are tapping into the blurred boundaries between physical and digital with immersive, tech-enabled ‘phygital’ stores.

 

L’Oreal’s omnichannel concept store in Shanghai offers a live streaming set, face-scanning tech and personalised shopping with WeChat. For an extra taste of Paris, a virtual bike simulator takes shoppers through cobbled streets to collect points which can be used towards product discounts. 

 

While some brands are opening bold new stores, others are downsizing to offer more convenient formats or locally tailored neighbourhood stores. 

 

Nike’s Unite retail concept is designed around local communities and interests, while Bloomingdale’s is launching smaller multi-brand store format Bloomie’s in August.

 

Retailers are also diversifying their physical offer to be more relevant.

 

We’ve seen Selfridges open a wedding suite after obtaining a wedding license for its building, introduce wedding dress rental and resale, introduce mini garden centres, and unveil an in-house cinema this year.

 

Shopping centres and department stores are also dedicating more floorspace to remote and co-working spaces, with Saks Fifth Avenue set to turn parts of its stores into SaksWorks with WeWork.

DESIGN

As the biggest ecommerce markets globally and often leaders in pioneering retail formats, APAC markets are pushing the boundaries of ‘phygital’ store design. 

 

Shiseido’s Beauty Square store in Tokyo showcases product and brand zones alongside virtual experiences, app-enabled content, and beauty salon services.

 

In Seoul, Uncommon store is a totally unmanned shop born out of a joint venture between Archi@Mosphere and Korea’s retail conglomerate, Hyundai Department Store Group. 

 

Scanning a QR code allows entrance into the store, which also triggers a personalised experience based on stored shopping data. 

 

The ‘untact’ system is partly facilitated by Amazon Web Service, and all the cutting-edge technology is carefully integrated throughout the retro futuristic design. This enables the space to function like a single computer, customising elements and capturing more data for future use. 

 

Immersive, phygital retail stores are gaining traction closer to home too.  

 

Farfetch’s “Luxury New Retail” strategy is reflected in its ‘store of the future’ concept rolled out in Browns stunning new flagship.