Future formats: Attracting the gaze of tomorrows consumer

Retailers and brands have had a tough year on the high street. Consumers have been turning off or gazing in other directions. There has been an increasing onslaught of disruption across all consumer sectors, and as a result, many of the current formats of retail fail to meet the needs of their ever-more demanding audiences. How can brands and retailers make their stores work to win back their gaze?

Many of our own clients are rightly focused on optimising & realigning their mix of consumer touchpoints. Key to this, there appears a strong desire to re-imagine the role of retail formats within future focused omni-channel strategies.

A universal truth for formats

Our late founder Rodney Fitch once said ‘No retail format can be successful unless it meets the expectation of the society that it serves’. Thinking about his statement, it strikes me that it could be considered a universal truth for brands and retailers, an idea for any time and place. However, shifts in consumer behaviour require a different interpretation of success, and of the expectations of society.

The measurement of success in a format has traditionally been seen through the lens of square foot sales. New metrics must be added to account for the wider effect of the format across all channels. Also changed are our expectations. We demand more from brands at retail; more speed, more humanity, more personalisation, more social & environmental awareness, and in an ever increasingly competitive landscape, more uniqueness.     

Format purpose & a role in the whole

Seamlessness is another expectation, and the temptation for brands and retailers is to turn each format into a multi-functional entity, a kind of swiss-army knife experience, where the customer can achieve everything everywhere. This approach doesn’t recognise the consumers need for relevance at the point of interaction, or more simply put, a clarity of purpose. Therefore, brands and retailer need to find a more specific role that each format will play in the whole.

But what role? Consumers are shifting behaviours away from buying & owning toward experiencing. In addition, online retail is increasingly replacing the physical store as the buying destination on the path to purchase. It's clear that brands and retailers need to ready themselves for these broad emerging trends to play out.

Some new emerging formats are testing and re-defining the purpose of the physical store, re-thinking the role of products and the wider fulfilment chain. With fast home deliveries now expected and commonplace, stock holding at retail is put to question. Nordstrom is experimenting with smaller local stores that carry no inventory, but provide customers opportunities to try products, then arrange for purchased items to be delivered.

Then in China, Hema fresh food grocery stores double up as warehouse hubs for online orders. Store pickers collect products from supermarket shelves & send them on automated carousels directly to drivers, enabling them to deliver within 30 minutes to a 3-mile radius.

In both examples, the physical design of each store has been totally re-imagined within a newly connected retail model.

Leveraging format attributes

Re-imagining the role of the store around new models of fulfilment is one option, but what are the other considerations for future formats? 

Brands and retailers need to start by looking at the natural attributes of each retail channel & format. For the physical store, it comes down to 3 I’s: Instant, immersive and inhabited.

Instant

Still, no other channel is as convenient as the physical store when it comes to immediacy of access. Retailers need to embrace the opportunity by moving closer to their audiences. This might mean downsizing & multiplying or even moving to meet the customer where they spend time. Brands and retailers should be experimenting with mobile formats and vending formats to meet our needs for convenience.

Immersive

The physical realm is a multi-sensory dimension that puts us in the centre. Theatrical spaces, event driven spaces, spaces that tell stories and involve us in the narrative. For formats that are less about selling and more about experiencing, retailers need to find their immersive angle and run with it.

Inhabited

Real people are the magic & stickiness that can only be fully experienced in the physical space. Staff can be the strongest brand advocates, so retailers need to put their people at the heart, either to guide the experience or to explain a complex product offering or service.

Belief in physical

For big brands and retailers, what’s needed to make the necessary change?

The first big step is to establish a belief in the power of physical retail as an antidote to the new online worlds that we spend much of our time. You only need to look at the list of online retailers who have now opened physical spaces. Amazon, Everlane, Warby Parker & Misguided to name a few, some of whom swore never to open stores, then saw the opportunity of physical formats to engage more meaningfully with consumers.

In the end, businesses that are not looking forward and adapting to change will inevitably be left behind. To secure future success and win back the gaze of future customers, brands will need to be brave, to try new things, learn from them and try again. They will need to re-imagine their formats, to be even more convenient, more immersive and more human.