Physical retail is experiencing a new Renaissance, as evidenced by the new openings of flagship stores in the most important cities in the world, the new role of department stores and the proliferation of pop up stores. New formats are experimented across different sectors with new co-branding, co-marketing and contamination operations.
We are in the era of Retail Phygital where digital features such as speed, unlimited product availability, services such as return policies land on physical retail while some store modes: relationship, advice, customization, multi-sensoriality (think of Artificial Intelligence or Metaverse) enrich online experiences.
The important thing is to plan a coherent strategy where the different channels and touch points integrate into a single architecture.
1. Retail phygital & Technology
Digital transformation is an excellent opportunity for brands and retail. Omnichannel is a must-have, which has transformed the selling ceremony and the role of brand ambassadors, who must familiarize themselves with technology to offer maximum customization of the experience. The goal is to create a phygital and fluid customer experience, where the omnichannel customer can move in time and with different goals. In Retail Phygital, layout, and staging change, challenging visual merchandising: the physical store becomes the scene of live streaming, social sharing, and content creation. The challenge of the Metaverse is still open, although the interest in this new place seems to have slowed down. Still, for the second consecutive year the Metaverse Fashion Week on Decenterland and Fashion and Luxury brands continue to invest in it. For the Visual Merchandiser, Metaverse is a change of communicative paradigm, but it does not distort the rules of Visual Merchandising and can be used as a tool to drive to the store. There are already showcases and displays with content created by AI, but the human aspect remains essential. The technology allows you to create an engaging and fluid "customer experience", allowing you to create personalized content through media suitable for different generations, simplifying specific steps such as payment and, above all collecting real-time data on consumers and processing them to face a fluctuating and evolving market.
2. New consumer generations and new formats
We are faced with a generational turnover in the world of work and in the consumer scenario: boomers come out hard, millennials predominate, Gen Z loves the physical store as long as inclusive and sustainable, while analysing the habits of the Alpha generation born between 2010 and 2020. Everyone is an individual, but it is established that each generation has its media, values, and founding elements, we are all together but each as in a "silent disc" dances according to its playlist. How do the brands respond, in the light of the fact that in the coming years 70% of Fashion turnover will be achieved by the new generations? Some realities like WOW Unusual Department store in Madrid is proposed as a place of intergenerational meeting, where the target is not registered but for lifestyle. Others who are lovemarks, such as Dr. Martens, working with communication in stores and capsule collections of iconic products designed for different targets, others such as the Spanish fast fashion giant Mango create generational stores such as the Mango Teen sign inaugurated last year in Barcelona. In Italy, it is interesting YOLO in Milan, for now a single store where the exhibition language is designed for Gen Z, with areas of the store perfect for creating social content: Instagram and TikTok.
Another interesting format are the community stores, created around customers who recognize themselves around common values or passions such as the Jordan World of Flight opened in Milan, the flagshipstore La Martina dedicated to the Polo or the beautiful Vans of Via Orefici Milano.
3. Planet & people
Sustainability is no longer a macro-trend but a necessity, a cross-sectional value for sectors and generations. It is a drive that combines different attentions and behaviors from countries and markets. Sustainability is a competitive advantage if it is an integrated process with the vision and mission of the brand. For Gen Z it is a parameter that influences behavior and choices. Among the pioneering brands: Stella McCartney with her constant research for materials that combine aesthetics and respect for the planet and its inhabitants, Patagonia the brand activist since 1973 whose stores are hubs for associations and campaigns and host corners of second hand and to repair clothes, Timberland that in the flagship store in London opened in 2019 inaugurated the format purpose lead store dedicated to sustainability, from retail design, to lighting, to in-store campaigns that are "call to action". The future is a circular, regenerative economy, which means a business model that aims to protect the resources used, restoring value and well-being to communities. If, in the first post Covid the mantra of visual merchandisers, the reopening of the stores was "create immersive and engaging displays" to return customers to the store, now the priority is "reuse, recicle and restore.". It takes a lot of creativity and new skills: research of materials, reflection on logistics, the concept with a sustainable aesthetic, the ability to design in-store and outdoor edutainment actions and information on the respect of the planet and its inhabitants, humans and animals. Let’s add another item to the 3 R, which is rent, because more than renting objects, garments, spaces and equipment is another step in rethinking Retail.
4. The charm of the ephemeral
Evolving but continuing the phenomenon of pop-up stores, maybe used to launch and sell a capsule collection. Pop-up stores, events and capsule collections make us prey to the charm of the ephemeral, the temporary and the limited in space, time and quantity. The pop-up stores, not to be confused with the seasonal boutiques, are booming thanks to special and experimental installations and gratify thanks to a unique customer experience. The pop-up store from the first is not a point of sale, or rather it is even in some cases, but it is a medium to be used for the launch of new products or collections or to strengthen brand awareness and are just some of the goals. As a demonstration of how important the physical store is, the pop-up store is adopted by many online retailers to create a real touch point with customers: among the latest Shein, previously among others, Amazon, eBay, LoveTheDesign, and Zalando.
4.1 Capsule collection and co-branding
The phenomenon of capsule collections has exploded since 2021 with partnerships really new. They are created to intercept the demands of consumers who are always demanding, fluid and on the move, in some cases they are tests that can then open up to wide-ranging collaborations, or ephemeral, short-lived and limited experiences. Often the channel chosen to promote and sell them is the pop up store, or the pop up corner a space within the wholesale channel or in the flagshipstore of the brand.
4.2 Events, Events, Events
In accelerating the store's evolution to a hub of experiences, relationships, and engagement, where the product has a co-starring role, events play a significant role. They are a tool to celebrate brands, emphasize iconic products, and pamper consumers and influencers. Events, in addition to in-store and online traffic, aim to create new relationships by hiring new targets or gratifying loyal customers with immersive experiences and special occasions. The ways of participation, we think of the fashion shows, are hybrid: exclusive in presence, open through the web. The theater can be a store or an unusual location with a combination of different worlds. The weather often coincides with fairs, cultural events or fashion and design week.
It is increasingly evident the nature that the physical store is assuming during this 2023, becoming a real "Immersive Touchpoint", in which through innovative installations and concepts emerge more and more stories, values and relationships. Sustainability and circular economy, the charm of the ephemeral, the phenomenon of capsule collections and events are certainly the main protagonists of this year’s trends.
But not only that, digital technology and omnichannel activities are proving to be great opportunities for the retail world and finally the increasingly central role of the community that is accompanying us from the experience economy to that of belonging.
FRANCESCA ZORZETTO – Master Director VIME ®
SUSANNA LANDI & YU RETAIL'S EDITORIAL STAFF