The Future of Retail: Reinventing and Preserving the In-Store Experience

Consider retailing a two-pronged challenge: On the one hand, retailers must accommodate the increasingly mobile consumer. On the other hand, the traditional retailer can't ignore the need to drive that consumer to a physical store. 

As highlighted in our previous post on the future of retail, there is a flurry of activity surrounding online retail initiatives right now, with particular emphasis on mobile. Mobile payments in particular are getting a lot of attention as retailers figure out ways to transfer the shopping experience to every sort of handheld device.

But there is an equally intense effort to reinvent the traditional store. In fact, many retailers are beginning to realize that rather than close stores, they can sustain them by giving them a much-needed facelift. More than a surface makeover, however, reinventing the store involves a thorough rework that often includes a growing trend: creating a "brand story" to engage and involve a consumer in the shopping experience.

Not surprisingly, this trend may bring with it interactive, intuitive and  futuristic elements, such as virtual shopping screens, audio/video presentations, QR code integration and even robotic store displays.

As Interbrand points out in its just-released Best Retail Brands 2013 report: "The store, as the heart of the brand and its emotional center, cannot be starved of investment and innovation, or appropriate levels of design, media and technology. It needs to be the showcase for interesting new collaborations to keep things exciting, whether it's a luxury jeweler or a humble dollar store."

The report continues, "In the future, retail stores will look different than they do today. The digital dimension and corresponding consumer behavior continue to evolve and change the way a brand experience is delivered. Now that the idea of shopping can't be anchored in geography or managed as an event, the brand experience is too important—and holds too much promise—to be ignored. It's critical that retailers focus on enhancing brand experiences no matter where they are."

While the overarching strategy is store reinvention, the manner in which specific store brands, or even retail shopping areas, accomplish such a feat varies widely. Take the iconic British "high street" strip of stores and small businesses, which until the financial crisis hit bustled with shoppers. The complexion has changed dramatically since the 2008 recession. Vacancy rates are skyrocketing and chain stores are closing their doors. 

But today, there is a slow rebirth occurring, thanks to the growth of smaller, specialized shops that cater to particular tastes—like Ms. Cupcake, a high street establishment in southwest London's Brixton area selling "the naughtiest vegan cakes in town."

Independently-owned stores "account for two-thirds of Britain's high streets," reports The Economist. "The number of independent bakeries on high streets rose by 17 percent from August 2011 to July 2012, according to Simply Business, an insurance provider. Besides quirky, independent outlets, the businesses faring best often provide a service."

British retailers have gone out of their way to make a lasting impression on today's consumers. One novel approach designed to stop shoppers in their tracks was renowned department store Selfridge's "No-Noise" in-store experiment in January that featured name brand products with no logos. Why? "To help you find balance in this fast-paced world," says Selfridge's.According to the store's creative director, Alannah Weston, the silent shopping space cleansed the palate for the new year, inviting "customers to find a moment of peace in a world where we are bombarded by a cacophony of information and stimulation."

Iconic British brand Burberry, on the other hand, has relied on digital and high tech for its brand of reinvention. For the grand opening of its largest store in Asia Pacific last April, Burberrydramatized its bad weather gear by making it virtually rain during its "Burberry World Live" launch. Then in September, Burberry turned its flagship London store on Regent Street into a "living website"—a digitally-enhanced shopping experience that filled the 44,000-square foot space with innovations of all kinds (including that previously debuted digital rain). For its Chicago store opening last December, the store hosted a unique local event that continued its theme of "retail as theater," meshing digital, entertainment and fashion in a seamless experience.

UK-based Marks & Spencer recently installed 10 virtual mirrors in their retail stores to coincide with their virtual mirror application available on their website, the San Diego Business Journal reports. Customers can see, in-store, what a particular shade of eyeshadow looks like or how a punchy shade of lipstick looks against their skin, without the makeup ever touching them. "The days of old-fashioned dressing rooms are numbered," said Vipanj Patel, CEO of TAAZ, which owns the chain, in a statement. Patel notes that this particular technology is extremely valuable within an industry with so many choices and possible combinations, allowing consumers to recreate looks seen in-store without the hassle of trying on or applying anything. 

Small retailers are also using digital in innovative ways to reinvent the shopping experience. In Seattle, Washington, for example, a tiny store called Hointer sells designer jeans for men. Nothing unusual so far. But the shopping experience is unique: consumers use a smartphone to scan a QR code or tap a tag on the products they want. Then the items are robotically delivered to dressing rooms. Shoppers can go online to request more sizes and colors. The purchase is completed via a slide-through credit card machine—and the shoppers exit the store without interacting with a live salesperson. Founder Nadia Shouraboura, a former Amazon executive, toldthe Seattle Times,  "The whole idea behind Hointer is to combine the ability to try on items with the very fast and efficient model of online shopping."

North of the border, meanwhile, Walmart and Mattel took advantage of last year's holiday shopping season to collaborate on Canada's first pop-up virtual toy store. Toronto shoppers were able to view three-dimensional toy images, scan a QR code with their smartphone and purchase the item of their choice—with free shipping if desired.

Interestingly, the store was set up in an underground tunnel where commuters pass by—echoing Tesco's HomePlus chain's 2011 augmented reality-based shopping experiment in South Korea (at top) and a more recent test involving online grocer Peapod's virtual store in Chicago. Peapod wrapped a commuter station tunnel with graphics that looked like supermarket shelves filled with products. Shoppers could then scan QR codes of the virtual products and instantly create an order for home delivery.

These are just a few of the examples that demonstrate the way in which retailers are reinventing their stores, mostly with the help of technology, and often with the integration of e-commerce. While any idea is fair game for the future, it may be some time before this latest idea takes hold with consumers: In a London shopping center, an enterprising company has set up a small 3-D printing operation. This makes it possible for consumers to actually order customized items to be manufactured while they wait instead of shopping around in traditional stores. As Adam Fraser of Nokia writes, "Imagine a one-stop shop where you can not only print household items, but also your clothes, and your dinner—to very specific requirements based on your preferences."

Okay then... print me a pair of jeans, and make it snappy!