The Retail Planner

New community commerce

Being part of the community will be important to brands that combine retail with offline social activities and events, and offer one-stop-shop experiences.

Nike Flatbush, Brooklyn New York

Lululemon is an advocator of experiential retail, frequently hosting free yoga classes in its stores. Its latest flagship location in New York’s Flatiron District, is its most ambitious and community focused project to date. Hub 17 is designed to host not only regular yoga and fitness workshops but also arts and lifestyle programming including The Gathering (a regular dinner series featuring local chefs and restaurants), The Frame (a monthly film screening courtesy of Rooftop Films), and Super Sundays (a weekly musical performance showcasing up-and-coming talent). In-store concierges complete the full service environment.

Retail and social relevance are dovetailing with Nike’s Community Store program, which continues to expand across the US. The brand is positioning its latest store concept in the heart of the local community in Brooklyn’s Flatbush area and is committed to hiring at least 80% of staff from a five-mile radius within the neighborhood. This connection with the brand’s core local demographic is the base for how Nike sourced the location, ‘we wanted a place that was instantly recognizable, that expressed the unique spirit of Flatbush and Brooklyn and that amplified the values of the Nike brand,’ says Dennis van Oossanen, vice president of Nike’s North America Direct to Consumer business.

‘New York’s oldest new neighborhood’ is the mantra for the Seaport Studio pop-up shops at the Seaport District in Manhattan where property company Howard Hughes Corp. is reinvigorating this historic area, rebuilding Pier 17 and constructing a four-story glass building that features a rotating mix of fashion designers, food and drinks stalls and entertainment on the roof.

Incubator retail

Taking a long-term view, brands increasingly nurture consumers, providing space and support for external innovation and entrepreneurship at every stage of their life to create true brand loyalty.

Over the last two years major retailers such as John Lewis, Tesco, Wal-mart and Westfield have launched ‘retail labs’ or in-house innovation hubs installed to provide insights on cutting-edge technology trends to inform future strategy.

JLAB is a 12-week accelerator programme run by John Lewis designed to bring start-up innovators to the large retailer. Playing around with how tech might work in-store is important for the future of the business,’ says John Vary, innovation manager at John Lewis. ‘We need to recognise if it’s a gimmick or not, he says, explaining one of JLab’s key rolls is to foster a ‘no holds barred’, Room Y, where the team can think by making.  Vary says JLab has a Trojan horse affect, that changes the attitude to innovation from within. Key is the mentoring and facilitating of new ideas that might drive new customer engagement, interactivity and ultimately sales across any channel.

As consumers become more used to smart devices and technology in the home to make their lives more convenient, retailers need to showcase Internet of Things products with this digitally savvy consumer in mind. In 2015, US retail giant Target launched Open House in San Francisco, an experimental pop-up space dedicated to showing and selling smart home devices. Target’s aim was to create a platform that was ‘part retail space, part lab’ for brands to show off creative uses for their products in a 1:1 scale model home and at the same time educate customers about the latest devices that are in fact ready and waiting to turn their homes into connected smart hubs.

Westfield has gone one better than a simple in-house innovation lab. At its San Francisco location the mall operator has launched Bespoke, a monolithic co-working space that is now home to a host of retail technology start-ups that can experiment on potentially 20m shoppers annually. This latest venture from Westfield Labs is spread over 37,000 sq ft and is a testing ground for a community of retail or technology start-ups that can run pop-up retail tests or stage events in a dedicated event space. It’s a win-win for Westfield that both connects to innovation and attracts a technology hungry new audience through its doors.

District rebranding

Retailers are creating department store style districts with a strong sense of place, culture and history in a fightback against the convenience of online shopping. Meanwhile department stores are recasting themselves as hangout areas, driven by lifestyle demographics rather than merchandise categories. Dwell time is the primary concern for department store brands keen to provide relevant spaces for their community. 

The Meatpacking District has new-found upmarket appeal and a fresh visual identity to match, courtesy of design agency Base that has redesigned the district’s website and hoarding fascias to reflect its split personality history. ‘The Meatpacking District is full of stark contrasts – heritage and future, chic and gritty, night and day, culture and commerce, high heels and cobblestones,’ says Base partner Geoff Cook. ‘We aimed to capture the spirit and essence of those distinctive juxtapositions through the visual identity.’

Covent Garden, perhaps one of London’s best known and oldest shopping districts, recently entered the digital era by launching The Pass, an app that helps people navigate its streets and shops, and rewards them with more targeted offers. While the new app is a clever move to personalize the retail district’s shopping experience, it is the way CapCo’, Covent Garden’s landlord, has upped its game, acting more like a nimble department store through collaborations, pop-ups and events that is to be applauded. If Covent Garden lost its mojo in the age of the shopping mall, it’s back on form now.

Covent Garden is acting like a department store with dedicated areas for beauty, menswear and luxury brands, says Beverly Churchill, creative director of CapCo. ‘Through the new app we are offering our visitors a tailored, expert-driven shopping experience, which can help them make the most of their trip with offers that are highly relevant to them,’ she says. The technology allows both retailer and consumer to benefit, since CapCo’s visitor data gives brands that are part of the scheme valuable insights on consumer habits and product preferences. ‘We want Covent Garden to be an international shopping destination with reputation for an ‘insider experience’ courtesy of The Pass,’ adds Churchill.

European department stores have long existed as miniature urban community hubs. Over the next few years, German department store KaDaWe, Berlin is having a major refit courtesy of architecture firm OMA, that wants to challenge the very concept of the department store as a singular mass location. Instead the redesign project, aims to offer four distinct retail quadrants, with unique architectural and commercial qualities – targeting demographics for ‘classic’, ‘experimental’, ‘young’ and ‘generic’. Described by OMA as: ‘four department stores under one single roof, fragmenting the original mass into smaller, easily accessible and navigable components, similar to distinct urban sectors embedded into a unifying city fabric’.

There are two key trends that are driving the renaissance of department stores. Firstly, they are re-emerging phoenix-like as destinations to seek out expertise, VIP services and unparalleled one-to-one shopping. Secondly they are back in fashion as places to visit for the curated, edited experience that can provide an experimental shopfloor showcase for early adopters or consumers looking for niche product ranges.

Selfridges has taken the wellness retail trend and is running with it. Opening in spring 2016, the department store will launch a 37,000 sq ft Body Studio area on an entirely new floor. The floor, it’s largest ever new concept space is dedicated to fitness, eating clean and body image and will feature a huge new lingerie, nightwear and activewear brand offer. Located on the top floor in former office space, it will stock more than 100 brands, as well as a wellness café. The new development will debut with the theme ‘Everybody’, celebrating the body and inner beauty.

Also this spring, Harvey Nichols is relaunching its menswear department as a contemporary lifestyle hub for men to seek fashion inspiration from streetwear to formal suiting. Taking Rapha as it’s ‘community’ cue, Harvey Nichols is merging its usual fashion, accessories and high-end designer departments into a more seamless lifestyle floor where a central café and open-space workshop area will serve to pull different genres and creative inspiration together.

Wellness hubs

Consumers’ growing desire to live a healthy lifestyle has given rise to wellness hubs that combine retail and hospitality amenities in one space.

The trend for fitness retail is geared towards the times of the day people fit exercise into their busy lives. Consumers are increasingly looking for one-stop destinations where they can sweat, socialize and unwind in a harmonious way. What began as a US West Coast movement with yoga and eating-clean hangout The Springs, is now a global phenomenon. Gyms, spas, nutritional advice and training support are all pre-requisites for eco-systems for wellness location retail.

The Point in Los Angeles’ El Segundo area is a new 115,000 sq ft retail complex that offers a variety of stores and outdoor eateries geared to wellness lifestyle. Stores include activewear brand Prana, women’s dance and yoga clothing retailer Athleta, the Six:02 retail concept, as well as a new outpost of SoulCycle.

‘The Six:02 concept is interesting because it is all day fitness: from 6am gym sessions to work and from work to soccer mum,’ says Chute Gerdeman’s Shafley. ‘It’s also a community resource where customers can network or partner with training experts in-store.

‘The void for me was, where can I go to drink a cup of tea, get my work done, and take a class?’ says Tal Rabinowitz, founder of new meditation space, The Den. The homely feel of the drop-in centre combines mindfulness with the casual subtleties of a clubhouse mentality, designed to help people unwind with a matcha tea (say) – on their own or with friends – take some time out of their busy schedule or feel inspired enough to work uniterupted. ‘I want customers to have balance in their life… to learn how to be centered, while still getting stuff done,’ she says.

Ethos, a hybrid yoga and fitness UK brand is expanding from Cambridge to Shoreditch in London with an all-encompassing studio and café space set to both allow customers to work out and chill out, says Michael Sheridan, director of Sheridan & Co, who designed the retail and workout space.

The Ethos slogan is ‘mind body alchemy’ says Sheridan who also worked on the branding, which features five ‘ancient world’ symbols – a key aspect of the brand’s DNA, which enables the brand to expand out its product range alongside the fitness offer. ‘There’s holistic brand depth there. The Studio has everything from yoga to a juice bar, wine and food. We’ve created a brand thread that runs as deep as you want. ’

Dawn-till-dusk food temples

The latest retail buzz isn’t based around malls crammed with fashion boutiques, but around food. Food markets that serve up best-in-class global dishes where local expertise is curated and repackaged for cosmopolitan cities like New York and London.  

It’s not enough to launch a pop-up Asia-style hawker food market these days, now the trend is to gastronomise the street-food trend and tier the food offer for a mix of entertainment and dining in one social, urban experiment.

New York chef and entertainer, Anthony Bourdain is set to open a hotly anticipated mega food market on Pier 57 in New York in 2017. Dubbed the Bourdain Market, it will feature selection of 100 food vendors from New York, and will also house a Singapore-style hawker market with street food stands and communal eating spaces. Bourdain told the New York Times, he has been driven by his determination to bring people closer to the kind of kinetic experiences he shows on TV and to share the food he is passionate about.

The Time Out publishing brand is launching food markets in cities around the world, building on its 2014 experiment that transformed Lisbon’s Mercado de Ribeira into a foodie heaven, that combined some of the city’s best chefs, shops and restaurants in one inspirational, local destination. A dedicated London food market is planned for 2017 and Time Out London has confirmed the British edition will be ‘packed to the rafters with the city’s best food, booze, art and cool cultural shenanigans.’ A New York location will follow in 2018.

London Union is the company behind the capital’s Street Feast and Dinerama pop-up hawker markets, which founders Henry Dimbleby and Jonathan Downey say, despite their hugely popular yet derelict warehouse origins, will have a permanent home soon. Dimbleby compares London Union’s business model to the Apple app store. ‘We’re very reliant on our traders – we create the vibe for them to come to, but they are the magic dust,’ he told Management Today. 

Crowd-scaping; local proximity brands

Brands are using geo-location data to measure and monitor footfall enabling them to personalise the retail experience. The increased desire of consumers for real-time, location sensitive information also speaks to the growing importance of mobile in driving retail. 

Smartphone shopping has created a new ‘front door to the store’ mindset among retailers, according to a recent Think with Google report.  75% of Target customers start their shopping journey on a mobile, and the US retail giant channels this mindset to target the further third of its customers who click on a mobile search advertisement and then visit a Target store.

Being close to the store that sells a searched for product is also key to driving e-commerce from mobile to store according to Google, that reports consumers are hungrier than ever for local information.  While mobile shopping-related searches increased 120% in the last year, those with ‘near me’ included, have grown 2.4 times in 2015 vs 2014. Furthermore, a 2015 Google Consumer Survey found that 50% of consumers who conduct a local search on their smartphone visit a store within a day, and 18% of those searches lead to a purchase.

Google now allows users to monitor footfall at the same time they search for a store location or opening times.  Layered on top, is its Local Inventory Ads program, which allows mobile advertising to be targeted to consumers based on whether a given product is in stock at nearby retail outlets, and even includes information on how far away a consumer is from a given store. Google says consumer attitudes to mobile shopping are changing with a bigger emphasis being put on using the nearest physical store location more like a local distribution centre, where they can pop in quickly to pick up a product they’re researched in advance. For its Digital Impact on In-Store Shopping study, Google reported respondents listed ‘product availability at a nearby store’ (74%) and ‘pricing at that store’ (75%) as the two most useful search result terms. Soon consumers will become more used to digital people counters such as Density, a piece of retail software that measures footfall in stores, better informing them when is the best time to pop out for convenience or browsing led shopping decisions.

Facebook is adding richer, more localized footfall plus (anonymous) aggregated demographic data to the brands that advertise on the platform, in effect telling brands more about who’s near their stores and importantly who has seen their advertisments. The new location-based advertising platform for brands is likely to push more foot traffic into physical stores and brands will be able to tailor their advertisements to appropriate customer demographics when they are nearby, according to analysis by AdAge.

Curator brands

Brands and like-minded collaborators are curating retail environments using art and editorial to tell stories and bring concepts to life.

Le Bon Marche’s Brooklyn themed retail experience was an autumn/winter 15 highlight at the Parisian department store that chose to spotlight a range of local designers and artisans in-store inspired by the largest New York borough’s infectious community spirit and sense of independent creativity. Items from more than 100 different Brooklyn purveyors were on sale, including Catbird jewellery, Kinfolk men’s wear and Mast Brothers chocolates.

This idea of curating a ‘community spirit’ into a retail concept is literally swapping continents and proves local can be global.

Avant-garde luxury label McQ has refurbished a Grade II listed building in Spitalfields, and made it its new home. The interiors feature blackened steel details, blood red paintwork and original brick work, but most interesting is the decision to dedicate the whole lower ground floor to art. The gallery space in the store will provide a platform for emerging artists. Artist Ermias Kifleyesus is the first to take over the space, with an exhibition that takes images created by fashion photographer Harley Weir for McQ, and allows the public to deface and engage with them – a nod to the brand’s rebellious spirit.

Mr. Porter worked with Japanese retailer BEAMS on a capsule collection and pop-up retail showcase of six Japan-based brands for London Collections Men. The selection was informed by designers that represent an ethos of craftsmanship and artisan approach to design and manufacturing in keeping with ‘the BEAMS mantra,’ says Vice President Keishi Endo. ‘We’re proud of being a part of this cohabiting platform to bring more awareness and recognition to Japanese fashion in western markets.’

Nordstrom Space is a new concept boutique in-store at larger Nordstrom locations and is intended to shake up the status quo with contemporary labels that are hard to find in the US. The pop-in store fits are a burst of colour and creativity that was described by the New York Times as ‘for customers who are fanatical about fashion’. Space is curated by Olivia Lim, the department store’s new director of creative projects and Opening Ceremony alumni, who says Space is about moving out of your comfort zone.

Community brands, conviviality culture

As we increasingly live fast-paced, urban lifestyles, the traditional village community is no more. Consumers are looking for new spaces in which to socialise, share, engage and learn, and brands can extend the reach of their relationships by becoming the heart of the community.

02 Manchester, by Dalziel & Pow

Convenience grocery stores need to rethink their retail concepts to focus more on encouraging the local community to spend more time in the store, says Michelle du Prat, strategy director at retail design agency Household. Café areas or fresh food services plus wifi will attract local people to consider these stores as a third space, she advises. ‘This is playing out with a purposeful context at the new concept at Centra Group convenience stores in Ireland. They have completely repackaged the idea of on-the-go food shopping, which is not always just about convenience. Urban convenience locations need to be more community driven.’

US retail design agency Chute Gerdeman’s CEO, Brian Shafley, says Wholefoods is the original community retailer. The grocer started as organic markets that were community centric, highly tailored to the local market. When Wholefoods opens in a new town, the brief is to research what each community is about. For example in Chicago for De Paul University, it’s designed for college students, with a much younger approach, on-the-go, eat anywhere foods. In Streeterville, Chicago it’s more up and coming with an urban sensibility, more working, professional crowd. They have very little time again, on the go so the focus is on convenience but also bringing together the community. There are cookery classes and wine tasting and signage that has a local feel, the signage emphasises the brand’s involvement in events in the store.

Wholefoods is good at community retail agrees du Pratt. ‘They have stopped selling passive stories, they make the stories of their producers come to life via more engaging, highly visual Instagram walls in-store. There is a live feed of the stories of their producers, changing all the time. They don’t need to recreate content from their suppliers they just broadcast it live and direct. It’s more immersive and interactive for the customer to see it as it happens – and in turn, encourages dwell time.’

‘There’s an enormous amount of how-to on the internet – all the YouTube videos for DIY or beauty products drive a certain type of community engagement, says Michael Sheridan, CEO of Sheridan & Co.  ‘The idea of ‘how to’ should be critical in the retail experience too,’ he says, citing how the fitness brand Sweaty Betty invites you to a workshop session and the brand uses that as an opportunity to sell more clothing after getting to know the customer better. ‘This idea of ‘how to’ can be defining in retail, the mix of viral and community and participation is key to linking a highly personalised, relevant experience that invites loyalty.’

Retailers are obsessed with millennials because they drive change and while they are fickle, they are often the tipping point for mass market trends. Millennials are increasingly looking at brands that back social change, says Shafley. ‘There is a powerful message to be made by brands that get it right. The Gap holiday promotion with Bombas, a ‘conscious consumerism’ brand was pitched well and resonated with this target audience.

What defines a community changes, says Shafley. ‘Online community, social community, local community – the undercurrent is, there is an expanding family that brands need to talk to on the same level.’

Convergent retail

Brands are diversifying their spaces, showing their expertise and strengthening their relationships with consumers through shared experiences, learning, working and socialising to create brand relevance.

The concept of cafes mixing with retail is starting to happen more and more – examples like Fernandez & Wells at the Duke Street Emporium and Thomas’ at Burberry. ‘New for this trend is the Oasis Tottenham Court Road concept space in London that introduces a day to night proposition,’ says Dalziel & Pow’s strategy director Paul West. ‘Customers are invited in to experience more from the brand – stay and be pampered is the message.’ Oasis wants to mix a café, prosecco bar and manicure stations alongside fashion. The extended hours idea is engaging for consumers passing through this busy central London location and it brings together key elements of retail, pampering and socialising. It is captivating an existing audience to spend more time here. Key to attracting advocates of the brand,’ he adds.

The health and beauty sector is ripe for the newness of convergent retail, says Kate Shepherd, strategy director at Checkland Kindlesides. ‘Tiered service will be increasingly important in retail as stores need to identify the different needs of customers as they choose to come into stores,’ she says. Sephora’s VIB Rouge store in Vancouver is an interesting concept on this basis, because it mixes aspects of loyalty, online functionality and tiered services depending on the level of customer advocacy. ‘Gold members can get into different areas of the store and there are rewards such as beauty workshops for brand advocates. It’s strategic and thoughtful, it works well to invite loyal customers to spend time with the brand in an elevated service environment,’ says Shepherd who adds, ‘loyalty programmes are back.’

Shepherd also cites the watch brand Nixon as a great example of how to elevate service in store to something special. ‘At Nixon’s new Paris store, the watches are displayed in a wave like structure to invite customers into trying them on. They are out of glass boxes to try on at the customer’s own pace and then sales associates are on hand to provide personalisation services and expertise at the ‘service desk’ (not till), which you can’t get online. It’s like a form of secret access to the brand; people will come into stores for expertise. If they come into your store you have to give them something back,’ she says.

US confectionary brand, Dylon’s Candy Bar is reframing what a candy store looks like, through a convergent retail approach, says Chute Gerdeman’s Shafley.  ‘It has recently expanded the concept into new cities including Miami, LA, Chicago with a larger store format and incorporated a bar with candy themed cocktails for adults, plus an outdoor café area. There is a nostalgia offer, for example a dedicated fudge corner for older customers. They have tried to create a store that appeals to all demographics,’ he says. The new Union Square store has a ‘darker’ design for a more youthful, hipster crowd demographic – there are real attitude driven products. Personalisation and customisation are a big play at this store. ‘All this is much easier to do in-store than online. It’s driving footfall to shop for fun, for inspiration or as an emotional pick me up. If you’re going to invest time in shoppers you need to make it about destination over product.’

Experiential retail

The role of bricks-and-mortar retail is being re-invented. No longer solely focused on the transaction, brands are creating inspiring, interactive and immersive environments that engage the senses and give consumers a reason to linger for longer.

In the Middle East there is a heightened brief for retail experience. ‘Everything centres on engagement and increasing family time when it comes to designing retail spaces,’ says Colin Melia, director at agency HMKM. The agency is responsible for the concept design of Tryano, a new department store destination from Chalhoub Group in Abu Dhabi. ‘It’s a triple category department store space that features beauty, fashion and kids. It’s located across two floors in the Yas Island mall, and with a half an hour journey to get there, the brief was to make it a ‘special day out’ shopping destination for the whole family,’ Melia explains.

Designing for the Middle Eastern customer needs a luxurious touch he says. Design cues came from the central theme of Parisian meets Bedoin. ‘We gave each of the three departments a seasonal theme, spring, summer and winter while the entrance area is autumnal. The entire experience centres on a walk through the Versailles garden – there are walkways, collanades and structured wayfinding throughout. It appeals to this customer’s luxury aesthetic and brings the idea of nature from the outside in – which is necessary in this part of the world,’ he adds.

In the centre of each area is a destination entertainment area.  In the beauty area it’s a digital light installation by London agency KIN, to give a personalised experiential element. ‘Passersby can’t help but interact with it, it becomes more personal and you engage with the space around you, making it memorable. It’s a sparkly environment, catching your eye from afar,’ says Melia. ‘We wanted a fully sensorial attraction in the middle of each department, from the mirrored and lighting elements for visual attraction or, the sound-scapes that are more subtle. This is a memorable, interactive entertainment-driven retail experience unique to this destination,’ he says. 

Checkland Kindleside’s Shepherd says, for lifestyle brands the element of surprise and education via technology can attract customers to visit stores more. Ray Ban in Covent Garden uses gaming techniques to lure customers into looking at product in more detail. ‘On one display, it looks like the screen is broken when customers approach a pair of glasses, but as soon as they try them on, the screen comes to life. There’s something magical in offering someone an experience they didn’t think they were going to get,’ she says

Transforming something mundane like filling out tax-free forms into a service-led experience was the brief for Selfridge’s new international VIP lounge explains Tom Bartlett, co-director at WaldoWorks. ‘We needed to make those actions feel special or make those people feel well looked after; the physical space was imbued with lots of care and attention and the VIP area hosted by concierge staff, is like a hotel suite,’ he says. Waldoworks ensured it was a VIP experience throughout, by conveying the luxury message through tiny design details: the lip of the desk was curved up for people to lean on it, the chairs don’t scrape on the floor, the lighting is not glaring, there is a sense of privacy.  ‘People spend serious money here; the suite needed a serious atmosphere,’ he says.

‘This cultural meleau of different people and cultures means we had to consider both very demanding or very subtle service demands,’ says Bartlett. The mix is Chinese, Nigerian, Middle East and Malaysian, among others. So Bartlett says there were fast and slow service needs. British don’t like to be ‘serviced’ too much, where as Europeans like it. Middle East customers really like to be serviced and Chinese only like it when they are spoken to in Chinese. The Chinese don’t like to wait, but the Middle Eastern customers might take all day to do their tax. So we streamed the slow or fast service areas so everyone – even large groups – can find their own pace,’ he explains. Overall the space means that when these customers are served it’s a much richer experience than usual, there are luxury treatments throughout.

‘Five years ago design briefs focused on bringing digital into the store, now brands are moving away from that,’ says Bartlett. The reality of being in a store and all that it can offer should be more important than replicating the online digital experience consumers see on a tiny mobile screen. ‘Visiting a store is a time of luxury, brands need to think of that time as how a consumer rewards themselves with a little shopping treat, it’s time out away from the screen. You don’t get the same experience from online stores so don’t try to do the same thing – that should be dedicated to convenience based shopping. Visiting a store is still the best way for brands to communicate the shopping experience in a physical format,’ says Bartlett.

Time well spent is a D&P mantra, says strategy director West. ‘We talk about immersive retail environments, about the line between commerce and entertainment. The idea is there is so much a brand can be doing other than retail. Consumers have to have things to do now, as well as things to buy,’ he says.

Retail spaces are becoming new platforms for brand messaging, where traffic is a starting point as much as a destination. ‘A retailer’s starting point is engaging online, then it’s about driving multiple touch point engagements, says West, citing the agency’s new store concept for mobile brand 02, that drives learning and education more than commercial products. ‘It’s about creating a new destination for the latest technology and how it fits into your life. The brand needed to create a stronger platform for technology tutorials. There are 02 gurus on hand for service and it’s a sign that the Internet of Things is hitting retail now. Technology brands need consumers to understand tech better, it’s a very competitive landscape, especially between the big players. Connectivity is also much better. There is parity on availability of handsets and so it’s not about the hard sell anymore, it’s about lifestyle changes.’

Convenience culture

We are now an urban species, with always-on, around-the-clock, digitally connected lifestyles. The internet has created a sense of immediacy, where we expect to have everything at the click of a button, redefining consumer expectations for immediate gratification.

Consumers report they live hectic, digitally enhanced lives and so demand convenient retail solutions, says Westfield’s Ryan. But in today’s hyper-connected world convenience means more than just speed and efficiency. Retailers need to add inspiration along the way. ‘The top reasons for shopping convenience are: click n collect, search and price comparison.  Inspirational convenience could also come from online reviews, QR codes used in new ways, or mirrors to help visualize clothes,’ says Ryan.

The report indicates consumer attitudes to virtual reality will become ubiquitous in the next few coming years. In the meantime, shoppers want virtual reality technology to help bring in-store products closer to their everyday lives. 41% of survey respondents in the UK would like to use new technologies, such as virtual reality headsets, to experience how products will look in their home. A third (33%) say they would be interested in using virtual assistance to see how clothes would look on them.

Technology in-store should be about convenience meets online convergence, says Chris Mitchell of digital retail specialist Engage Works. Successfully integrating technology in store should be about how every single touch point communicates the brand experience. Mitchell cites Sephora’s new Flash retail concept in Paris as a clever way to update stores in an omnichannel world. ‘The store is like an expanded website experience but the focus is on service and experimentation. It’s a smaller retail footprint so it can be tested in more locations and fulfilment is easier to do. It’s about driving a digital experience for click-and-collect via multiple store locations.’

Fun and convenience collide courtesy of Amazon’s latest pop-up initiative, the Treasure Truck. According to Household’s du Pratt this says: ‘we’re putting the fun back into shopping because you can buy anything anytime, so come find us for something special.’ Amazon launched the travelling truck with a Go Pro camera promotion that invites Prime customers to download the dedicated truck app, which is geo-locative, to order the product and go and pick it up for a special price. ‘It’s a stamp in the ground that says online can be fun and we want to bring back the joy of shopping,’ she says.

Fast-food and beverage retail are being reworked for convenience, according to Checkland Kindleside’s Shepherd. At Starbucks Express in Wall Street, New York, the emphasis is on speed and nothing else. ‘This idea of tiered levels of service to determine retail design is encouraging – brands need to look at stores that serve people who have ordered online and come into the store to pick up,’ she says, suggesting brands should be utilizing more ‘ask an expert’ for different levels of service.

Chute Gerdeman’s Shafely says he has looked at the convenience conundrum for Best Buy in Manhattan. ‘We created an automated retail concept for Best Buy in Chelsea, that’s like a giant vending machine. Our job was to create a personality for the kiosk. It’s a retail destination that acts like online, but is dedicated to 24/7 convenience,’ he says. The Best Buy kiosk sells everything that Best Buy does online, from the latest video games or films to phone chargers. ‘We needed to make the shopping experience even more accessible than Amazon.’ There is an ATM / lobby interface that sells technology that people might need in the middle of the night or any time of the day on demand. In the face of same day delivery, people still want to shop ‘now’ he says.

Auto brand Hyuandi is testing a new retail concept through its UK partner Rockar, that has opened a digital-meets-physical selling experience in Bluewater. D&P’s West is impressed with the maverick approach that turns traditional car dealership sales techniques on their head. ‘There are brand angels that encourage customers to do a test-drive in the car park and everything else is researched online after a customer walks into the store. It’s immediate and feels like the future of digital-enabled retail convenience,’ he says.

Place-maker stores

The future-proofing retail strategies of physical retailers need to be about building on the physical attributes of omnichannel offerings, as well as location-based customer service that focuses on a brand’s sense of place. In this macro-trend report, (published in three parts) I explore the thinking around place-making retail strategy: how brand destinations are now increasingly a hybrid mix of new format convergence stores that can create a sense of community as well as rediscovering the art of experience.

JW Anderson Workshops at Ace Hotel

Mall developer Eric Kuhn believes that the soul of a city is found in the heroic routine of everyday life; in the markets, playgrounds, neighborhoods and parks. ‘Family is the building block of civic society – across all cultures,’ he says. Wherever his architecture firm, Civic Arts builds its malls, he believes they need to have sense of scale and place that root them firmly in the culture of their city hosts, reconnecting them with the lessons of their past. ‘After nearly a century in which individualism has ruled retail thinking, we are going back to community concepts driven by a bigger society and a world of development where the greater the mix the better,’ he says.

Urban retail: reinventing destination shopping

Retail is being reinvented in London’s West End, with retailers embracing the need to enhance the physical store experience and make it more relevant for consumers, says Steven Medway, managing director trading environment at New West End Company, the retail firm that manages the main shopping thoroughfares Regent Street and Oxford Street. ‘We’re seeing retailers across the board make changes at every level, from tweaks to layouts driven by data insights through to the incredible technological advancements such as RFID, interactive mirrors and live streamed events.’

Click and collect has become the norm for many stores, he says, with a 50% uplift recorded by retailers here over the 2015 Christmas season. ‘What’s more, the arrival of Crossrail in 2018 is precipitating retail change; inward investment is gathering pace and already 2.5 million sq ft of new commercial space is in development to accommodate the additional 60 million visitors expected in the area per annum.

‘As more brands and customers pour into the West End, we expect to see retailers continue to innovate the shopping experience and ensure their flagship stores are differentiated by experiential, disruptive technologies.

Channeling and learning from, the footfall of major shopping destinations is an evolving trend to watch as mobile-driven behaviors of consumers will start to define future retail strategy. For this, the ability of beacon technology to connect with consumers shouldn’t be underestimated After early adopter, the Crown Estate launched its dedicated Regent Street shopping app two years ago, and beacons began to be implemented in more stores across the US and UK, consumers were slow to pick up on the benefits vs the nuisance of multiple, sometimes value-less messages. ‘Consumers don’t have the patience to persevere with this type of technology if they don’t see the benefits straight away,’ says a Bloomberg analyst.

However the personalization opportunities these apps offer to mall or umbrella shopping destinations who can pass on aggregated messages from partner retailers is why beacons are still yet to reach their potential. Simon Property Group is one of the largest mall operators in the US, and has installed 4800 beacons in 192 locations nationwide and sees the beacons as ‘a service for existing retailers in the mall who can integrate their apps and message shoppers directly.’ The onus is on brands to wake up their app potential and deliver a relevant personalized message to the consumer when they are in the right place at the right time, Mikael Thygesen, chief marketing officer of Simon malls told CNBC.

With e-commerce growth still outpacing the growth of brick-and-mortar shopping, malls are looking for ways to engage consumers through more interesting dining options and stores that aren’t found everywhere.

The rise of online and the changing patterns of consumer behavior have impacted UK retail footfall in 2015 Q4, according to Springboard. Out-of- town, which incorporates the three core c’s of retail trading – convenience, choice and customer service, according to the firm –  has increased visitor numbers by +2.3%, on top of an increase of +1.3% in Q4 2014.

Consumer expectations for seamless digital to physical store experiences are higher than ever says, Diane Wehrle, insights director at retail market research firm Springboard. ‘Retailers have been doing their best to counter the growth of e-commerce, but consumers’ demands for convenience and the immediacy of online shopping are not being matched by retailers who are slow to catch up due to their large physical store portfolios,’ says Wehrle.

It’s true 85% of retail sales are still in-store, but consumers are increasingly disappointed when they don’t see the same product assortment in-store as they do online; so retailers need to react with inspirational experiential offers, advises Wehrle. ‘We are starting to see more change happening in hybrid retail destinations, where food and beverage locations are being added and store opening hours are being extended into early evening or nighttime.’

Between 5-8pm is a golden footfall opportunity when retailers can attract more families or people who want to combine eating out with shopping, instructs Wehrle. ‘Retailers need to change their habits, open at different times and introduce more social occasions to the retail experience,’ she says. There is increasing recognition among retailers that they have to offer more than just shopping: it’s all about destination attraction and the feel good factor.

Changing consumer shopping behaviours

Westfield’s latest How We Shop Now study reflects how consumers are changing their physical shopping habits, where virtual retail experiences, enhanced assistance and classroom-retail are key trends. 

‘Consumers don’t want a remote online shopping experience,’ says Myf Ryan, chief marketing officer for Westfield UK. They want to step away from their screens for a super sensory or educational experience that drives them to seek out something special, she says.

Consumers want much richer retail experiences where they can learn new skills, especially in cities. London has the biggest appetite for this – over a third (35%) want to learn a new lifestyle choice or skill at their favourite store, according to the report that was conducted in the UK and US. The most popular lesson topics are: health & wellness, cooking and social clubs.

‘Enhanced assistance is the point of difference where technology in-store can aid rather than replace the retail experience. That’s the ownable area for physical retailers. As technology evolves it defines how and where we shop. This shapes what a shopping journey should be – and that’s more sensory as a whole experience.

Shoppers are looking to retailers to provide an overloading of the senses with extraordinary sensory experiences.  All five senses were deemed to enhance the shopper experience, according to the survey. Vision and touch came out top, but just under a third of shoppers also identified smell and hearing. Taste was also important to more than a fifth of shoppers (28%). The largest share of UK shoppers said that touch and feel, and trial of the products, was a main benefit of physical stores (73%).

Millennials vote with their feet

Echoing these trends for physical shopping activities a recent GFK survey indicates millennials in particular are shifting back to visiting stores over shopping online due to concerns over security and a preference for tactile purchasing. 40% of digital natives have serious concerns about delivery costs, 37% worry about the security of their personal details and 40% again, prefer to experience products before they make a purchase.

Mobile drives omnichannel

It is crucial for retailers to have a mobile-first strategy when it comes to attracting customers into stores. Black Friday and the Thanksgiving holiday is now seen as the biggest annual retail event to track consumers through their mobile devices, when according to the Wall Street Journal, it is estimated that more than half of Black Friday shopping came from mobile devices. And this figure is growing every year. According to research firm Comscore, mobile devices drove nearly $13bn in holiday sales in the US in 2015, up 59% from the previous year.

The big trend from this year’s NRF retail show in New York was the shift from tracking devices to tracking consumers, according to retail technology website CIO. Personalisation is key, retailers realise and while beacons have helped some way along the path to personalisation, wifi and the act of individuals logging onto to store networks is better. Beacons are in a holding pattern and as long as consumers are willing, they will be driven in-store, when with the right tools, retailers can go a step further to analyse customer shopping habits across in-store, mobile and online, combined.

Department stores and urban malls swap roles

Department stores and urban malls are having a renaissance, especially in New York, as consumers seek a diverse mix and inspirational, destination-led retail experience.

Manhattan is about to see a boom in department store openings, including not one but two new stores from Saks Fifth Avenue (full price and outlet), one or possibly two Nordstrom concepts in midtown, and a Neiman Marcus at Brookfield Place in the lower west side. The latter are both set to open their first Manhattan stores in 2017 and 2018 respectively.

The handful of new luxury department stores are focused around mid or lower Manhattan and will reinvigorate the southern and western parts of the city, alongside the massive boost that the lower west side will receive from the Hudson Yards development, set to open in 2017. Described by developers, Related Companies as a ‘perfect blend of commercial, residential and retail’, Hudson Yards will be important for the creation of a whole new neighborhood between 34^th and 30^th streets and 10^th and 11^th avenues, where crucially one million sq ft of retail space will be built, as well as four commercial towers, residential space and a public square.

Malls are increasingly the place to launch retail concepts. Testing the local demographic in terms of appetite for a certain new product or service, is in itself a reason visit a mall for early adopting consumers keen for new experiences, education and just being in the know.

Macy’s in New York is looking to reach an older youth demographic through its new basement floor, One Below, that’s more of a store within a store than a department. Targeting 13-22 year olds, it features products from a range of lifestyle categories, from fashion to tech, beauty and food. There is an emphasis on customisation through installations such as a Levi’s laser-etching embroidery station, a Fossil watch-building stall and a Benefit Brow Bar. Macy’s plans on using One Below to test concepts on the fickle millennial mindset.

Chute Gerdeman’s CEO Brian Shafley cites Macy’s as starting to focus on community more. ‘It has struggled with bringing in new customers, so now it is thinking: we have to go where the customers are.’ He likes Macy’s new micro-store concepts that have launched as more neighbourhood specific stores, with a smaller footprint. ‘Here we have a more specialised assortment, that really focuses on omnichannel and the store as a connected hub. Macy’s is communicating with its customer pre-store and while in-store through social commerce’.  He adds, the One Below concept in New York is very community driven and increases dwell time for a younger demographic with carefully considered millennial-targeted brands where interaction with the customer is key. Macy’s has invested in Blue Mercury, for a dedicated ‘aspirational luxury’ beauty area. When it comes to community driven retail, brands have to have clarity to target the right demographic, he says.