In-Store Transformation

Covid-19 restrictions are being eased while vaccination rates are rising (e.g. 76.8% of the population in Spain is fully vaccinated). Stores are re-opening and shoppers are returning to brick-and-mortar stores (also to restaurants, bars and discos). Retail sales are expected to grow between 10.5% and 13.5% to an estimated total of $4.44 trillion to $4.56 trillion in 2021, as the economy rebounds from the coronavirus pandemic and customers spend money they have socked away, the NRF’s chief economist, Jack Kleinhenz, said at a virtual event. The NRF also increased its projection for full-year GDP growth to about 7%, compared with the 4.4% to 5% it expected earlier this year (Melissa Repko. CNBC. June 2021).

In-store retail is still very much part of the customer journey. A lot of brands closed stores and are now opening new ones in better locations or with better lease conditions. I’m meeting retailers that are planning to “transform” their in-store experience and brick-and-mortar formats.

Apple’s iOS change is impacting the ability of advertisers to target ads the way they have been, since people likely won’t opt in to letting apps track them. So Digital marketing expenses are increasing while ROI is decreasing (lower conversion rates and higher CPA, CPL, etc). Therefore, not only retailers are adapting their retail strategy, but pureplayers or omnichannel players that are struggling with the latest iOS update are also planning to grow offline. Pureplayers are moving to physical retail!

Physical retail has changed, as I commented in Retailtainment. It’s not about selling products, it’s about creating a special atmosphere, a unique experience where communities, tribes and fans, communicate with brand’s lifestyle and values. Stores are the new museums or art galleries. This is the essence of flagship stores, concept-stores or pop ups.

A brief selection of the latest concept stores that recently opened:

Hermés Pop Up Gym Experience in Brooklyn
Onitsuka Tiger Milan
Hyundai Seoul Deparment Store

In South Korea, Hyundai Seoul Department store opened its doors a few months ago. It’s the biggest department store in the city and has stores with no sales people, developed by Amazon Web Services technology or kiosk robots to welcome visitors. One of the floors is dedicated to global art and culture.

Uncommon Store in Hyundai Seoul
Zegna Lab – Soho (opening soon)
Louis Vuitton Pop Up Store – Shibuya Miyashita Park (Tokyo)
Levi’s NexGen Store at Palo Alto

Levi’s new stores include integration with the company’s app, curbside pick-ups and contactless returns while assortment is optimized thanks to local customer data.

Off-White, Paris

PÁR store in Prague – Photography: Tomáš Souček
Louis Vuitton, Los Angeles – Photography: Brad Dickson
Stone Island, London

2 responses to “In-Store Transformation”

  1. […] Online apparel sales represented around 5% before COVID-19, and brick-and-mortar stores were essential to display clothes. Customers visited stores to see, touch and try on clothing. From […]

  2. […] out shopping are back on the agenda for consumers. After more than two years of intermittent store closures, physical retail is rising in demand – and businesses are once again extending their […]

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