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How brands are redefining retail space in 2018

Thursday 5 April 2018 Omni-ChannelRetail ConsultancyShopping Behaviour

Laura Kempner's picture
By Laura Kempner

With changing consumer behaviour and developing technologies shaping the retail landscape in 2018, brands need to react to stay relevant and continue meeting the needs of their consumers. A number of key shifts in recent years show how brands are proactively redefining retail space in this fast paced environment.

These top trends include: brand partnerships, increasing omnichannel engagement through physical stores, emphasis on retail experience, growth in individual brand presence, and the personalisation of shops and space to provide unique customer touchpoints.
 

PARTNERSHIPS 

Brands are increasingly opting for a safety in numbers approach as large brands form partnerships in our everyday shopping spaces, hoping to increase accessibility and convenience for both brands’ customers.

A key example of this is the recent introduction of Argos to Sainsbury’s supermarkets across the country. This allows Argos to operate as a store in a store; saving on rents, increasing efficiency of operations for both brands, opening new delivery options and providing access to a broader customer base. Other examples of these partnerships include: Sainsbury’s and Habitat, Argos and EE, Asda and Decathlon, Tesco and Next, Poundland and Pep&Co, Tesco and Currys. 

CLICK TO BRICKS

Whilst online transactions are growing, (with 30% of Comparison Goods expected to be spent online by 2026), the role of the store in facilitating online interactions is also growing. The rise in click and collect, showrooming, brand building through experience and return channels all mean that online retailers are starting to understand the significance of in store touchpoints. 

We are seeing traditional pure-play online retailers increasingly investing in physical locations, highlighting the important role the physical store plays amongst shoppers. The likes of Missguided, Made.com, Amazon Go and the Rapha Cycling Club have all invested their online businesses to bring a physical presence to the high street and crucially, create a brand connection that is deeper than that portrayed on a screen. 

 

30% of Comparison Goods are expected to be spent online by 2026

DRIVING ENGAGEMENT 

One of the most remarked on trends in retail is the growth in retail as theatre. Brands are creating stores that reflect their wider ethos through placing the product in a customers lifestyle, using digital technology to add value. This use of physical space to merge the boundary between online and offline retail ensures that brand loyalty is secured across all channels and touchpoints of the customer’s purchase journey. 

Missguided’s two new stores pride themselves for creating “Instagrammable moments”, with relatable quotes, mannequin babes, a live DJ and makeovers in stores for their customers. 

Stores are becoming more like show rooms, displaying less stock to provide a more consumer focused shopping experience. John Lewis have dabbled in this, with their unique “try before you buy” concept in London, Liverpool and Cambridge – allowing customers to sleep over in a showroom and get a true feel for the homewares and furnishings before making the choice to purchase any of the items.

One of the most remarked on trends in retail is the growth in retail as theatre

CONTROLLING THE BRAND

Retailers are increasingly seeking to control their brand by becoming independent operators of space with many breaking out of department stores and defining their own space on the high street.

Apple are the front runner of this trend, creating a unique space to engage with their customers, but other brands are quickly following suit – including LEGO, MAC, Benefit cosmetics, and Adidas.

Dyson have not only expanded their brand presence to create a standalone showroom store on London’s Oxford Street, but also have used this space to connect to customers in a unique way. Visitors are not encouraged to shop and spend, but to explore the science and engineering behind the products, learn about the quality of the brand and receive tailored expert advice from specialists. 
 

PERSONALISATION

Tying in to many of these trends, brands are now working harder than ever to tailor their physical stores to provide unique experiences that are associated with their brands. There is a recognition that a “one size fits all” approach will no longer suffice, pushing brands to be more innovative with their physical space and tailoring their products to experience to the area in which they are located.

Tom Ford’s first standalone beauty store in Covent Garden opened in 2017. This space encourages exploration and discovery amongst consumers, with different rooms used for different retail experiences. The ‘colour room’ which allows visitors to test every shade of lipstick through augmented reality, is joined by a male ‘grooming room’, and an interactive tech-driven ‘fragrance room’ which allows shoppers to digitally explore the perfume range.
 

MAXIMISE SPEND AND ENGAGEMENT

These dynamic shifts in the ways brands are using retail space show how the industry is moving. It is essential that retailers understand how their stores are shopped and segment their estate to reflect how the shopper engages with space, not rolling a format out based on the centre architecture. This means working collaboratively with landlords to understand the shopper, what they want from a store in a centre and tailoring the store to reflect the diversity of its use. 

People shop in different ways in every location and the centre and the store need to understand who their customer is, why they are there and what they expect, then move beyond meeting expectations to surprise and delight their shoppers. This will maximise spend and engagement.

If you would like to know how these trends are effecting your retail space, please get in contact.

An area of focus for CACI’s Space Redefined briefing was to highlight how brands are adapting to the changing shopper behaviour in today’s retail landscape. Within this blog, we uncover key areas of change and give an indication of how brands are starting to break away from the typical channels and models, and thereby defining their own retail spaces in 2018.

Redefining Retail Space