Experts see innovation and pop-up stores

LONDON – The future of physical stores is being called into question by the coronavirus pandemic, but experts believe the key to survival will be to find out again.

Retailers have been trying for some time to attract customers by creating in-store experiences, but now they need to get creative as shopping habits change and customers become more demanding.

Online shopping has increased since the beginning of the pandemic. In the UK alone, internet sales rose from less than 20% to more than 32% in just three months at the start of the first Covid-induced exclusion. And experts expect that the convenience of buying online means that consumers will continue this habit even after the pandemic.

Meanwhile, nearly 50 stores in the UK will close every day in 2020, according to accounting firm PwC.

Both trends show how important it is for retailers to get their physical presence right.

Kristina Rogers, global consumer leader at Ernest Young, told CNBC in March that there was a “true redefinition” in how retailers use their physical spaces.

“It’s not just an exchange of goods,” she said, adding that retailers need to understand who their customers are and what they want.

She highlighted how Target, one of the largest retailers in the US, has chosen to have more space in its stores for Apple products. This enables customers interested in Apple devices to effectively check it while shopping for other items in Target. It is also convenient for current Apple users who can combine two trips into one.

“They are recreating a ‘mini mall’ in their store,” she said.

But not every retailer has such a large area to work with. In fact, some experts believe that successful stores of the future can be stores that, regardless of size, still offer new things.

“There will undoubtedly be fewer physical stores as we move forward,” Matt Clark, managing director of AlixPartners, told CNBC’s Street Signs Europe in March. “But the stores that remain need to offer an even greater experience and an extra set of services, as well as just the ability to buy products.”

One way retailers stand out is by focusing more on pop-up stores. These are spaces that are temporarily open to show off a particular line or product, and that have become popular in recent years.

“One of the biggest opportunities for pop-up stores is to create new opportunities for exploration. It’s not about a consumer going to a Ralph Lauren store that is the same today as it was ten years ago or 20 years ago,” Alex Cohen, an expert commercial property at Compass, told CNBC.

Some big brands have already looked at pop-ups as a way to attract more customers. Stella McCartney, the British fashion designer, presents various local businesses in her flagship store in Old Bond Street, London, in celebration of the lifting of restrictions for retailers in the UK. Guess is about to open its first pop-up store in Germany. for Activewear.

Pop-up spaces allow retailers to create something “really fresh” while saving their costs, Cohen said.

“The brands have the opportunity to spend much less, not commit themselves to a long-term contract, to spend less on modular installations and to do so very quickly,” he added.

In addition, these types of stores reinforce the idea of ​​exclusivity – a feeling that is becoming increasingly popular with many customers.

‘The whole idea of ​​exclusivity is really important. The fact that a pop-up will expire … creates excitement among consumers. ‘ Wow, if I do not look at this pop-up retail offer … next 3 months it will disappear, I will never be able to see it, ” he said. It adds that kind of excitement to many traditional stores.

So it’s not just about the feeling of an exclusive product, but also an exclusive experience. And that means retailers can take advantage of other ways in this exclusivity trend.

“As far as exclusivity is concerned, many of the big street retailers now require that they, by appointment or actually when you arrive at a store, be connected to a salesperson. Or worse – create a sense of exclusivity,” Cohen added.

Brands also recognize the growing importance of sustainability, both from a business perspective and because of the growing customer awareness.

And that comes not only through more “ethical” product lines, but also in what services are available at physical stores.

At its flagship space in Stockholm, for example, H&M offers services to repair old clothes and rents some of its outfits for special occasions.

“The sustainability movement really highlights one of the most important dichotomies facing the fashion industry in particular, but also broader retail,” said Clark of AlixPartners.

‘The debate over value versus values: the need to be really, really clear about your sustainability evidence, ethical acquisition, etc., but at the same time offer good value for money which means not only cheapness but value for money for the consumer not.’