Brands and retailers are doubling down on the physical experience. And it’s easy to understand why: after several years of an ecommerce boom driven by COVID-19 lockdowns and heightened safety measures, consumers have been clamoring for immersive and engaging physical brand experiences.
However, brick-and-mortar strategy requires careful thought and attention to detail. In addition to deep customer understanding, brands need to ensure that their physical environments address their unique products and services, business differentiators and the critical aspects that support the design itself, such as material selection and technology.
Retail TouchPoints recently interviewed four retail industry luminaries to get their perspectives on the trends that will drive the future of store design and experience strategy. Although the final article outlines six fascinating topics, these were the three that stood out to us, especially as we continue to shape the 2024 agenda for the Retail Innovation Conference & Expo.
Trend 1: Store Design Teams Bring in Other Stakeholders
Experts indicated that because stores now encompass so many different components, store design teams and committees are starting to evolve. Rather than simply having design and construction in its own silo, teams should also include marketing, operations, IT and other stakeholders. This will ensure that all store design and experience decisions align with the broader brand strategy and that all tactical elements are considered.
“You really need that trifecta — the store design team, the business development and marketing team, and then the IT team to an extent, depending on what kind of technology integration is happening,” said Melissa Gonzalez, Principal at MG2 and past speaker at the Retail Innovation Conference & Expo. “Having all these people together allows you to bring together the art, the science and the business.
“Having that lens is critical because you’re having a more comprehensive view of what’s possible. You’re pushing things forward with the art, but it’s backed by science and data. And then of course, the business lens of it to make it scalable.”
Trend 2: The Evolution of Store Metrics
The Retail TouchPoints’ 2023 Store Operations Survey found that retailers still largely rely on traditional key performance indicators, such as store revenue, same-store sales and foot traffic. They also still largely track a lot of metrics, which can actually make analyzing and gauging store success incredibly difficult.
Nikki Baird, VP of Strategy for Aptos, reaffirmed that “store KPIs need to change.” The biggest problem is that “they are far too centered on the store as a stand-alone entity and not as part of the overall customer experience, which means they tend to drastically undervalue the store’s contribution to that customer experience. There also tends to be a lot of ‘metric creep,’ where retailers throw another metric on the pile and over time the pile becomes so huge as to be useless.”
Baird offered an alternative: sales per engagement minute.
“For every minute that a customer is engaged with a retailer, whether that’s time on the site or time spent with an employee in the store, how much spend does that drive? It’s a great number because it lets you look at that by channel, but also across channels and touch points,” Baird explained. “Once you have a baseline, you can do a lot with that number.”
Trend 3: Loss Prevention Becomes a Design Issue
There have been a lot of debates around the significance of loss prevention in retail. However, the headlines don’t lie: Dick’s Sporting Goods, Lowe’s and Target all mentioned loss prevention in their earnings reports as a major issue for their businesses.
As a result, it has become a consideration for all teams, including store design.
“We are already observing a good share of retailers revisiting their shopper experience to tackle organized crime,” said Mardi Najafi, VP of Retail Strategy & Design at Figure3. “Everyday items are behind locked plexiglass, but technology will become a key driver of loss prevention efforts. For example, I expect the adoption of self-identification requirements, such as Amazon Go technology, to become more widespread. AI-enhanced video surveillance also will enable retailers to battle this dilemma.”
We plan to dig into these topics extensively during the 2024 Retail Innovation Conference & Expo through our candid track conversations, workshops and networking meet-ups. Sign up for updates to get the scoop on our agenda and speaker lineup!
