What could the store of the future look like? This is not a new question but the answer is something that seems to be under constant review and in regular need of updating. Over the next four pages we will take a closer look at what this phrase means, how it is affecting or accelerating certain elements of physical retail and highlight some examples of stores that are putting these changes into action.
The retail store was already in the midst of a makeover before the world changed over two years ago. Because of the monumental effects that Covid-19, and the ongoing changes it has created in the industry, retail stores the world over have undergone a program of evaluation and acceleration.
Retail is under pressure. External factors such as increasing competition, technology advancements, and pandemic restrictions are driving change online and offline. Consumer preferences are also changing quickly. These are the opinions of Mathew Sweezey, the Director of Market Strategy for Salesforce, and Partner in the Salesforce Futures LAB in his article ‘3 Trends That Will Shape Retail Stores of the Future’.
That doesn’t mean it’s time to abandon the physical retail store. According to the Fourth Edition of the Connected Shoppers Report, 82 per cent of the $23tn worth of sales occurred in physical locations in 2020. Retail stores in the future are likely to remain significant moments in the customer journey. They will aim to support customers’ needs for entertainment, product engagement, fulfilment, service, and support. However, we may see those needs fulfilled in new ways, Mathew continues.
The three trends that Mathew points out are the following:
AR/VR can help customers make better decisions
AR and VR can be used as tools to compress the customer journey into a series of concurrent experiences that occur in a single moment. This provides a new way for customers to ask questions and obtain more information than was previously possible. Risk is removed from the purchase, and the customer can make better decisions. For example, a brand may deploy an advertisement via social channels that connects the consumer to an AR/VR-based product demonstration. Next, the consumer may choose to engage with a bot to ask questions. This completes the consideration phase of the buyer’s journey and leads
Retail stores may become influencer studios
Shopping will likely continue to be a form of entertainment for consumers. Retailers may consider merging online and offline selling by turning their stores into influencer studios. Retail staff can become influencers who sell products on the ‘Edge’. The ‘Edge’ refers to non-traditional brand or retail spaces, such as social media channels. We’re already seeing retail sales staff at high-end brands like Tiffany’s sell to their own social media followings through their personal social media accounts. We may even see the rise of powerful influencers who lead tours to different stores, and book retail studios like music venues.
Retailers may open hyper-focused stores and DTC pop-ups
Brands may take personalisation to the next level with new hyper-focused retail stores. These can carry a single product line to create super-niche experiences. Adidas, for example, recently opened a Terrex flagship store in Shanghai that only stocks the brand’s Terrex product line. Smaller DTC brands may partner with larger traditional retailers to scale beyond online sales. These partnerships can also benefit traditional retailers. For example, they can consider embracing DTC pop-ups to refresh their offerings each time the customer visits the store.
Examples of Stores of the Future
Imagine a store where shoppers can see and summon all their sizing, style, and colour options in stock without ever leaving a fitting room. And where managers know what’s selling and what’s on the shelves right now, while associates learn while working on their own. This store isn’t in some fantasy world. It’s in Beverly Hills, California, where retail tech at the COS (Collection of Style) smart store is already elevating the customer experience, optimising omni-channel opportunities, enabling operational efficiencies, empowering staff, and evolving retailing whether in-store, online, or hybrids of both. The brand is leveraging gStore, a mobile-first Software-as-a-Service application by GreyOrange. The app helps its staff combine the ideal aspects of e-commerce and in-store shopping and provide unique and personalised experiences that customers want but can only get in person. COS are looking to create enhanced & frictionless in-store customer experiences. Touch-screen smart mirrors in fitting rooms use radio frequency identification (RFID) tags to automatically recognize the products and sizes customers have already picked out. The mirrors can also offer in-stock options for colours, sizes, styles, and complementary accessories that shoppers can summon associates to bring to them.
Amazon opened its first physical clothing store back in May in Glendale, California. Called Amazon Style, its customers can shop for both men’s and women’s apparel, shoes and accessories. The store, first announced by Amazon in January, uses some new technologies not found among traditional clothing retailers. Marking the e-commerce giant’s first foray into brick-and-mortar apparel retail, the store opened at The Americana at Brand. Amazon Style is just the front—the homepage, if you will—behind which a large warehouse facility keeps a gigantic surplus of inventory. A floor-to-ceiling glass window on the main floor gives shoppers just a peek behind the scenes, as employees help load industrial-sized elevators with racks of goods to send upstairs to the dressing rooms. One doesn’t just pick an item off the rack and take it with them while they shop at this store. Instead, each rack has a barcode that you can scan via the Amazon Shopping app, which has your sizes pre-loaded from previous purchases. That cues an AI-enabled algorithm to start searching through the store’s warehoused catalogue and zip the desired item over to the second floor, where the dressing room provides its own glimpse into the future of shopping. The store also boasts a version of The Drop, a Style staple that allows online customers to shop an entire influencer-curated collection for a 30-hour flash window.
Siam Discovery, a shopping mall in Bangkok, Thailand, merges the physical and digital worlds together with a new phygital retail activation. Fight for the Future, the name of the third volume of the shopping centre’s Future Lab, is its first online-to-offline (O2O) venture. Each iteration is aimed at activating a unique shopping experience with a different theme. The present installation is based on the central theme of boxing, with training bags and boxing-ring flooring dressing the space. Merchandise from mixed martial arts gear from Thai boxing equipment brand Fairtex lines its walls. A QR code is placed in the centre of the space, granting visitors access to the OneSiam App, where they can access the Sandbox metaverse. Besides discount codes and special offers in the app, customers can create an avatar and engage in augmented reality experiences as well as personalize boxing gear, which they can also do in the physical space.
Online hypermarket Ochama (owned by Chinese internet giant JD.com) opened two new stores in Rotterdam back in January. The physical shop can be found at Big Shops at the Vierhavenstraat. Tricia McKinnon, CEO and Founder of Indigo9 Digital says in her article ‘6 Examples of the Store of the Future that the two stores named Ochama which are located in the Netherlands are automated stores manned by robots. They sell a range of goods from food to beauty to home furnishings. After placing an order on the store’s app your order is picked and packed by robots. Once you arrive at the store to pick up your order all you have to do is scan a barcode to receive it from a conveyor belt. Customers can also have their goods delivered to their home. The name Ochama is a combination of the words “omni-channel” and “amazing.” “With rich experience in retail and cutting-edge logistics technologies that the company has accumulated over the years, we aspire to create an unprecedented shopping format for customers in Europe with better price and service,” said Pass Lei, General Manager of Ochama, JD Worldwide.
As mentioned earlier, hyper-focused stores and DTC pop-ups may well be the way forward, and this certainly seems to be the case in Asia this year, as hyperphysical stores seem to be undergoing a renaissance.
In May, Moncler Genius and Gentle Monster launched a pop-up space within Gentle Monster’s Seoul Hause concept store. The store brought to life the launch of ‘Swipe’, the new collaboration between the brands where four pairs of the Korean brand’s eyewear pieces were reimagined. The hyperphysical retail pop-up blurred the lines between reality and the digital world. Inside, items were displayed in extraordinary installations that had a physical and digital presence, and a conceptual presentation of the Moncler Genius X Gentle Monster collection, which also included clothing and accessories. The all-black and concrete pop-up reimagined a minimalist and modern world for visitors to step into.
Bringing a slice of the Big Apple to Singapore, New York luxury brand Coach opened its food-inspired hyperphysical store in partnership with Two Men Bagel House in early April. Located in Duxton Hill, the pop-up features decor inspired by a traditional bagel shop, showcasing the quintessential flavours of New York City. Shoppers could browse the latest Coach ready-to-wear collection by Creative Director Stuart Vevers, as well as its best-selling handbags, including the Cashin Carry Tote and the Soft Tabby. After shopping, customers could have their bags customised for free with bespoke Coach graffiti motifs by local artist Tiffany Lovage, offering customised spray painting. The Two Men Bagel House team also designed five bespoke personas dressed in Coach’s key pieces from the spring 2022 collection. The “bagelsonas” were featured in co-branded merchandise such as water tumblers, enamel pins and stickers and will be available as gift options with in-store purchases.
Nike has updated its Nike House of Innovation site by opening a cutting-edge, multi-sensory weather simulator in its Paris flagship store that transports customers to different climatic environments for product testing. Giving customers access to extreme climates in the heart of Paris, the installation spotlights the ‘unique protective capabilities’ of the latest Nike FIT ADV product line. Real-time 3D-creation tool Unreal Engine powers the display of three landscapes on a seven-m-wide, high-resolution LED screen. Standing in front of this screen, clients – outfitted phygitally with the FIT ADV garments – are captured by a cutting-edge robotic film camera that tracks their movements. Even if customers don’t leave the House of Innovation with new equipment, they take something home with them: scanning a QR code, one can obtain a custom video edit of their try-on experience, a souvenir of their 3D teleportation shareable on social media networks. While the store launched a few years back, this new installation highlights how it continues to evolve and remain current to customers in a changing world.
Back in May, Philipp Plein opened its doors to a first-of-its-kind ‘Crypto Concept Store’ in London, perhaps marking the beginning of a new era for luxury retail. One of fashion’s biggest advocates for the metaverse, the German designer said shoppers at the Mayfair boutique can expect to be overwhelmed by the flagship’s “retail experience 4.0”, which would be rolled out to his 100 other outlets around the world, if successful. Aiming to merge physical and digital shopping, real world money and cryptocurrency all within one unique space, Plein’s futuristic flagship store has been paired with a free and independent NFT trading platform online in a bid to make cryptocurrency and NFTs – or non-fungible tokens – more accessible to ‘normal people’. Over three floors, the store hosts a show-stopping Philipp Plein collection that mixes fashion with cryptocurrency and NFT digital art – with the Museum of the NFT Arts taking up an entire storey and having already launched in the metaverse Decentraland at Plein Plaza as the first physical NFTs art gallery in the world. Highlights include the chance to peruse the Philipp Plein ‘Lil’ Mon$ters’ NFTs collection, with all pieces available to buy to customers with crypto to burn.
Earlier this year, Mall of the Emirates, owned and operated by Majid Al Futtaim collaborated with Cisco, a worldwide leader in IT and digital transformation, to launch the Store of the Future. The first retailer to take over the cutting-edge space is THAT Concept Store, Majid Al Futtaim’s home-grown luxury brand. According to Majid Al Futtaim, the store will elevate the traditional shopping experience by incorporating digital retail to introduce customers to a futuristic shopping journey. This will be created through five of Cisco’s core technology features – Digital Display Canvas, Lift & Learn, Magic Mirror, Beauty Mirror and Store Analytics.
Personalisation is enhanced through the Lift & Learn feature, which customises recommendations and displays a product’s information on screen once it is picked up by a customer from the shelf. Adding to the product discovery journey, the Magic Mirror helps customers browse a variety of products, which are available on online stores, through an embedded digital and interactive touch display. Additionally, the Beauty Mirror limits the physical contact aspect of discovering beauty products and makeup by helping customers try them through augmented reality and interactive touch. The store’s advanced technology also leverages wireless infrastructure location service analytics and intelligent cloud-based ceiling cameras to provide consumer behaviour insights and analytics.