Issue No.08 — Retail

01 of 04
August 2021

Introducing spotlight issue 8: revealing how retail environments are adapting to remain relevant

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INSIGHT

The pandemic has changed the way we shop and accelerated the shift to ecommerce globally.

In the US, ecommerce surged by 30% in 2020, while the UK witnessed a remarkable 46% increase in online sales volumes between May 2019 and May 2021.

Across the APAC region, particularly in China, the shift towards ecommerce is even more pronounced. Retail sales in China are projected to reach $2.8 trillion in 2022, with ecommerce accounting for approximately 50% of total retail sales, rising to an estimated 55% by 2024.

However, the rise of ecommerce doesn't signify the demise of in-store shopping. Forrester predicts that 72% of US retail sales will still occur offline by 2024.

Recent research underscores the enduring significance of physical stores to consumers. A substantial 62% of global consumers emphasise the importance of brands having a physical presence, compared to 51% in the previous year. Furthermore, 64% of consumers prefer brands that offer both online and in-store services.

Given these trends, how are retailers actively devising strategies to lure shoppers back to physical stores and adapting the retail environment to meet evolving post-pandemic needs and behaviours?

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TX Huaihai physical ‘digital’ brand store – courtesy of Wonderland Magazine

STRATEGY

Retailers are embracing the merging realms of physical and digital through immersive, tech-infused 'phygital' stores.

In Shanghai, L’Oreal's omnichannel concept store exemplifies this trend, featuring live streaming sets, facial-scanning technology, and personalised shopping experiences via WeChat. Adding a touch of Parisian charm, a virtual bike simulator whisks shoppers through cobblestone streets, earning points redeemable for product discounts.

While some brands are boldly introducing new flagship stores, others are opting for downsized formats or locally tailored neighbourhood outlets. Nike's Unite retail concept, for instance, caters to local communities and interests, while Bloomingdale's is launching the smaller multi-brand store format, Bloomie's, in August.

Moreover, retailers are diversifying their physical offerings to stay relevant. Selfridges, introduced a wedding and resale services, as well as mini garden centres, and even an in-house cinema this year.

Shopping centres and department stores are also adapting, allocating more space for remote work and co-working environments. Saks Fifth Avenue, for instance, plans to transform sections of its stores into SaksWorks in partnership with WeWork.

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The Selfridges Garden Centre – courtesy of Selfridges London

DESIGN

As the largest ecommerce markets worldwide and often leaders in pioneering retail formats, APAC markets are pushing the boundaries of 'phygital' store design.

Shiseido's Beauty Square store in Tokyo seamlessly integrates product and brand zones with virtual experiences, app-enabled content, and beauty salon services.

In Seoul, Uncommon store is a totally unmanned shop born out of a joint venture between Archi@Mosphere and Korea’s retail conglomerate, Hyundai Department Store Group.

Scanning a QR code allows entrance into the store, which also triggers a personalised experience based on stored shopping data.

The ‘untact’ system is partly facilitated by Amazon Web Service, and all the cutting-edge technology is carefully integrated throughout the retro futuristic design. This enables the space to function like a single computer, customising elements and capturing more data for future use.

Immersive, phygital retail stores are gaining traction closer to home too.

Farfetch’s “Luxury New Retail” strategy is reflected in its ‘store of the future’ concept rolled out in Browns stunning new flagship.

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The Uncommon Store, Seoul – courtesy of @archimosphere