The Local Upgrade – The elevated retail and experiences transforming our neighbourhoods

During the pandemic the neighbourhood resurged as the focal point for daily life. As working from home continues, so too does local living and the growing expectation to access city perks on one’s doorstep. In response, retailers are relocating to the ‘burbs or elevating existing local offers into more experiential territory. The most progressive are also reigniting the community spirit forged in peak pandemic times.

Taking the relocation route, apparel brand Abercrombie & Fitch Co. has opened boutique-style stores in neighbourhoods with large online customer bases, one being Lakeview in Chicago. Rather than customers making returns at their local post office, they can now do so instore and perhaps make an incidental purchase. Department store Macy’s Inc. is making a similar play with its Market by Macy’s, a smaller ‘off-mall’ format. IKEA is also adapting with its neighbourhood-based Planning Studios and experiential Atelier100 a maker-based concept store for local creatives, delivered in Partnership with H&M. According to Bloomberg CityLab, these moves are off the back of 2022 seeing a total of 1,395 of brick-and-mortar store openings in the United States –?the second-highest number in recent years, many?of which were in the suburbs.

Family-run supermarkets, are also joining the trend, becoming destinations that rival fancy city foodhalls. The Brindle family’s The Good Grocer Myaree IGA, in Western Australia is one such case. Recent renovations have integrated an in-house florist, wine cellar, state-of-the-art tortilla machine, and cold pressed juice dispenser. To bring the community together, wine and cheese tastings are held every Friday evening. The benefits are clear with locals ‘looking forward’ to doing the groceries and customer numbers being up 18.5% on 2021.

Other brands are taking a more experimental and playful approach to appeal to their local communities. For example, footwear retailer, The Athlete’s Foot (TAF) is piloting a neighbourhood concept store in midtown Atlanta with events tailored to the creative set. Locals can drop into a sneaker customisation class, a complimentary shoe clean, or live performances by neighbourhood artists – among other events.?These experiences not only build brand engagement but create opportunities for community connection.

Looking ahead – Provocations for what’s to come

• Will localised, experiential-based retail continue? So far, we believe so. Brickfields’ own research of UK retail centres supports this, with the number one motivation for visiting being to ‘treat myself’, alongside other social drivers such as ‘time spent with family’ and ‘dining and drinks.’ As cost-of-living pressures rise, these free or low-cost moments for connection will be ever more important, and a valuable way to maintain loyalty when spend may wane.
• Could neighbourhood retail experiences be pushed into more tech-based immersive territory, akin to events in major galleries? Perhaps so. Recent studies have shown the number of active immersive specialist companies in the UK alone has more than doubled since 2018 – this includes virtual reality (VR), augmented reality (AR) and mixed reality (MR). PwC also estimates the sector to bring a $69.3bn boost to the UK economy and enhance over 400,000 jobs by 2030. We may well see a merging of retail and immersive events at a neighbourhood scale – bringing new life to local community assets.
• And what about the role of AI in neighbourhood retail? Automation and predictive services will continue, making rudimentary transactions increasingly seamless (as we’ve seen with Boxy and Amazon Fresh). As personal service becomes rare – it also becomes more valuable and special. Opportunities for retailers to lead with genuine care and exceptional service will be important going forward.