With the rise of e-commerce and a more digitally-forward existence, one question remains: what about brick-and-mortar retail?
Some have speculated an abrupt end to the era of retail; however, the numbers tell a different story. Retail store sales are still leading the charge, with almost 80% of sales coming from physical stores.
While the e-commerce space has certainly grown over the past few years, there’s no doubt that in-person retail is here to stay. But consumer behavior is changing. If retailers want to keep up with customers’ increasing expectations for a more engaging, personal experience, they’ll have to think outside the box
Cue: the retail storefront. What seems like an average part of a retail journey quickly becomes a tool for customer engagement and experience – so long as retailers are willing to step away from the notion that their business should have only one type of storefront.
Let’s dive in.
In retail, a storefront is a designated area for shoppers to browse items in person and purchase directly on-site.
For shoppers, the delight of a retail storefront is that they get to leave the building (or area) with a product in their hands. No waiting, no shipping woes, no delivery fees – just a quick check-out.
For retail stores, this advantage comes in many forms: direct engagement with their audience, lower rate of abandonment, and zero consumer shipping logistics.
What makes storefronts particularly interesting is the various physical formats they can. While some things will always stay the same (like branding to inform passersby), the retail storefront comes in all shapes and sizes.
The small stands that you pass while walking down a mall corridor? Those are retail storefronts. Instagram-worthy decorations with limited products in small pop-up venues? Another type of storefront. The kiosk inside of another store? That’s a storefront as well.
With so many types of retail stores to choose from, the question is: why not invest in more than one?
Some of the most popular brick-and-mortar storefronts include department stores, grocery stores, and specialty stores. These retail formats are usually set in stone (pun fully intended).
A department store like Macy’s or Nordstrom’s is typically found as its own large building within a mall or a standalone in a city. Similarly, a brand like CVS can be found as standalone stores across the US.
While these larger companies have different physical locations in shopping centers, malls, and towns globally, each physical storefront is almost exactly the same – similar layout, similar experience. We know what we’re going to get when we step into a CVS… whether it be in NJ or CA.
But, in only re-creating the same large department store or discount store throughout the country, these companies are missing out on quality engagement with their customers through a more personalized lens. How? Three main reasons:
No two locations are the same. Depending on the median income in the area, shoppers might be looking for retail outlets or discount stores rather than luxury boutiques. Or, vice versa. A college town will have a much different demographic than a residential community. Whereas a college-aged audience might benefit from boutique pop-up stores to peruse on their weekends, an audience in a busy city could need something a bit more eye-catching and unique like an experiential store.
Each retail store format serves a particular purpose along the shopping journey. If a brand is looking to expand their audience reach, a store-within-a-store (SWAS) setup might be beneficial for tapping into another brand’s audience with similar shopping history. If a brand wants to provide a next-level, frictionless experience, a self-service store might do the trick. It’s important to take a look at your target audience and determine their wants and needs to help drive which storefront formats will work best.
It was Einstein who said insanity is doing the same thing over and over again while expecting different results? Granted, we’re talking about retail stores, but the sentiment is similar. If brands are creating the same store over and over again, but searching for something “more,” the room for growth becomes exponentially smaller. With a variety of retail formats, not only will companies be able to learn more about their audience; audiences are more likely to engage with something “different” than what they’re used to.
Apart from the convenience stores and chain stores of the world, there’s an entirely different subset of stores that brands can consider (some that don’t include a long-term lease or lengthy contract!)
Rather than entering a long-term agreement, brands can dip their toes into offline retail with the pop-up shop layout. A pop-up shop is typically a smaller physical store that’s open for a limited amount of time to drive a sense of urgency and get customers in the door.
One example that hits close to home for Disney fans everywhere? This fall, Big Lots! discount stores are opening their 1,440 store doors to Disney, Pixar, and Star Wars pop-up shops. But, these shops will only be available from Sept. 2nd to Oct. 14th.
Pros of pop-up stores
Cons of pop-up stores
Small-format stores are exactly what they sound like – smaller versions of larger stores. Big-name retailers like Target, Bloomingdales, and Macy’s are utilizing small-format layouts to facilitate a more personalized, casual experience with a selection of highly-curated products based on location.
Pros of small-format stores
Cons of small-format stores
The store within a store format has been around for quite some time, featuring small kiosks or larger sectioned areas of brands in department stores or retail stores. For example, Kohl’s, a household name shopping outlet, entered a partnership with beauty giant Sephora to add the makeup brand as a freestanding stores within the larger building.
Pros of SWAS
Cons of SWAS
Remember the Rainforest Cafe craze of the 90s? Families everywhere gathered to experience a “storm” that happened every twenty minutes or so, with lights flickering on and off to mimic lightning and animatronic animals coming to life with loud reactions.
This is what we’re getting at when we talk about an experiential store; however, in retail the focus is on interactive displays and product demos. For example, digitally-native brand Karl’s Fishing & Outdoors opened up an experiential retail store with interactive experiences to help novice fishers understand how each product functions.
The social media-worthy themed store layout is all about building a buzz and driving store visits. Plus, creatively speaking, the world is a brand’s oyster when it comes to an experiential retail layout. Glossier recently themed all of its permanent stores by location. Their Miami location? Beach theme. Seattle? Pacific Northwest inspiration.
Much like a distribution center stores products available to be purchased digitally by consumers, a distribution store stores products to be purchased directly by in-person consumers, with no intermediaries involved (not even a cashier or salesperson!)
Focused on a frictionless experience, Amazon opened grocery stores as well as Starbucks pick-up sites where customers can quickly select their products and scan in/out without ever having to speak to a representative or pull out their wallet.
Your product should pave the way for your retail store format. A brand selling fishing gear will have a different look and feel than a beauty brand. Are your products easy to use? Do they need a tutorial experience? Whatever you’re selling should fit in well with your retail format. For example, a product tutorial for a fitness mirror brand makes sense, whereas a vitamin brand probably wouldn’t need one.
Is your target audience likely to shop in department stores? If so, it might be beneficial to enter a SWAS agreement with a larger retailer. Are they a part of the younger generation whose attention spans need a little more TLC? Maybe an interactive experience would work best. Your target audience will have unique wants and needs depending on who they are. Get to know them, ask for their feedback, and understand what they’d like to see your brand do.
Location matters! Where your physical store is will determine your layout, space, and what you can do with it. If your store is in a more residential area, you might have to tune down the music volume or any outside decorations that could upset your neighbors. If you’re within a busy city, it may be in your interest to have an eye-catching theme to lure customers in. Likewise, if you’re situated within malls or department stores, you’ll have to understand the customer flow and where your brand can fit.
In 2022, consumer behavior is changing, but one thing’s for sure – customers are expecting more from brands. More content, more options, and more seamless experiences. Plus, brick-and-mortar is absolutely here to stay.
Whether you’re a small startup, a well-known convenience store, a high-end specialty store, or anything in between, creating an omnichannel approach to distribution (including utilizing different types of physical retail formats) is more likely to keep the majority of your customers satisfied, engaged, and coming back for more.