The Future of... The Store
The rise of the internet has fundamentally disrupted the retail sector and for physical stores, it’s now harder than ever to fight for a share of consumer spend. For retailers, their overall store portfolio has never been more vulnerable as shopping habits call for a more omni-channel and experiential experience.
The majority of property experts within the industry believe that most retailers with a bricks and mortar portfolio are over-exposed, some to the tune of 20-30%. This, combined with the expected growth of online shopping from around 19% of retail spend today to over 50% in ten years times, means the shift in focus for stores has to continue to change at pace.
As customers crave a more sensory experience when shopping in stores, it is likely to be fashion brands, independents and those experimenting with store format that are the enduring ones. And as rents get cheaper and incentives more compelling as landlords struggle to fill empty lots, it’s likely to be more economically viable to explore different ways to offer a physical shopping experience than ever before.
The blurring of clicks and bricks
The exponential growth of online shopping that is anticipated in the coming years means that retailers and big brands will have to organise themselves differently. It’s likely that there’ll be a split between primary locations in city centres and high-end shopping centres and secondary sites in out of town retail parks and regional centres. This will allow the growth of flagship and showroom style premises in primary locations that truly showcase a brands product portfolio, whilst secondary locations will act as hubs to facilitate the online side of retailing. This could include everything from distribution centres and storage facilities through to pop-up collection point for online orders.
The advances in technology that retailers can now benefit from means that physical stores in primary sites will be able to offer a far more exciting and anticipatory experience for consumers that blends the ability to touch and feel with the ease of a digitally-enhanced environment to make possible what isn’t immediately possible.
With the help of AI and big data, retailers could know a customer’s exact needs, sizes and preferences and automatically provide the products that are needed. From clothing to white goods, sophisticated algorithms could find exactly what is needed and provide a range of products to choose from that fit the desired criteria. Add in AR and VR and it’s also possible to see how items could look in a particular space or even how an item of clothing or accessory would look on a person. This technology already exists and its use can only increase as retailers up their game to keep hold of their market share.
How are UK retailers adapting?
For secondary sites, many UK retailers are already adopting these as extensions of their online business and using them as collection points for online orders. As the location of many is out of town or in an area with extensive parking, as well as cheaper rents and rates, it makes commercial sense as well as offering a quick, easy and hassle-free option for customers who need to collect their purchases.
Behind the scenes in these ‘collection’ stores, robotics and other technologies are increasingly combined to allow an almost human-free process. Barcodes or QR codes can be scanned by a customer and then automatically picked, packed and delivered to the waiting customer with no human interaction needed unless there is a problem.
Some stores – particularly those on out-of-town schemes and in regional town centres – will also become vital cogs in retailers’ wider distribution networks and help to facilitate speedy delivery. This is similar to the model used by Argos, which stocks more than 20,000 products at local hub stores, enabling them to be dispatched more quickly for its Fast Track same-day delivery.
Meeting an emotional need
Despite the rise in technology and the ease of online retailing, the more social element of shopping cannot be ignored. People crave human interactions and as the world continues to become more digital, any opportunity to step away from this and be part of a more physical, emotional and real-life scenario is often a welcome one; it’s hard to see how this would significantly change.
Shopping has, for so many years, been a social experience and nothing can re-create wandering through a store with friends. No amount of technology can ever replace human touch and interaction. An algorithm could choose the perfect dress, but it won’t be able to listen to a customer share their excitement about the special event they are shopping for.
There may well be fewer stores by 2030 and the fundamental nature of what they do may well have changed. However, what all agree on is that stores will still exist because as convenient and simple as online retailing can be, the ability to have an experience in physical retailing will always be both welcome and wanted.
The Future of...Retail Parks
Out of town retail parks are quite unique in that they haven’t really changed a huge amount since they were first established as a shopping concept in the 1980s. Much of the appeal continues to lie in the ability to visit multiple retailers in mostly large-scale (big-box) units all within one place and with ample, free car parking.
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