A new breed of retail store is rewriting the rules and proving that people value inspiring experiences and expert solutions that make shopping more personal, says Echochamber retail futurist Matthew Brown
It’s still a brutal time for retail. Radio Shack and HH Gregg in the USA are veering towards bankruptcy. If you walk down Tottenham Court Road, the old electrical stores are nearly all gone.
Looking wider, the whole department store sector, from Sears and Macy’s, to M&S and JC Penney, is starting to resemble a dinosaur – big, unwieldy and slow to move. Ironically, it has never been such a good time to be small and nimble.
If you fail to face the challenge of online, you are finished. Just look at Blockbuster. I spent my teenage years browsing their aisles, and paying late fees for films I never watched. My 13-year-old daughter asks me why I didn’t just use Netflix. She looks at me in astonishment when I tell her we didn’t have the internet back then.
Online may have created the curse of ‘showrooming’, but the good news is that stores still matter. ‘Clicks to bricks’ brands, such as Amazon, Warby Parker and Made.com, are not only moving into physical retail, but pioneering innovative spaces that connect online and off-line to transform retail itself.
Physical stores will continue to exist, but the old rules have changed. If it’s stuff you need, then shop online. Stores are for inspiring experiences and expert solutions that are genuinely personal. I call this ‘me-tail’.
I recall a conversation back in 2002, with a client, following a visit to Apple in New York. The stunning space, in a converted fire station in SoHo, was one of the first of Apple’s new breed of retail stores. At the time, it was their biggest and best.
“It’s not real retail”, was the verdict. “It’s very nice, but it’s just a gallery. It’s there for brand building. It can’t possibly work as a commercial environment.”
Fast-forward 15 years and Apple is the world’s most profitable retailer.
Apple broke the established rules and pioneered a new approach to design and service that has now become the global benchmark. With stores that are architectural icons, often inhabiting beautiful and unique heritage buildings, a city now judges itself as having ‘made it’, when Apple opens a store on its streets.
As customers, we now expect technology stores to look as crisp and elegant as the product they sell – ‘gallery retail’ has become the new norm. Gone are the tattered carpets, grab-and-go boxes, fake displays and hanging cardboard point-of-sale. Customers expect retailers to clean up their stores and wow their audience.
For a while, everything in retail seemed to copy Apple slavishly. Thankfully, I am now seeing a flurry of innovation in my travels that is moving things forward. These new concepts are embracing elegant store design, offering solutions, telling stories, and creating community spaces that are about being, not buying.
It’s an exciting time out there. Brands are using retail as a channel to connect with customers directly and to control the message. Multi-brand and department stores are fighting back with curated, expert concepts that help customers navigate the confusing world of choice.
On the brand side, Dyson’s first retail showroom in London’s Oxford Street is a masterpiece of three-dimensional storytelling. The store is dedicated to celebrating manufacturing. A wall of prototype evolution, cut-out cameos and video wall content are used to communicate the passion and expertise underpinning Dyson’s innovation. A wall of dust and dirt in jars, and a giant sculpture of a hairdryer in the lobby prevent it from getting too museum-like and earnest.
Sonos launched its community-focused Sonos Studios in 2015 – an art gallery, coffee and co-working space in Shoreditch, where music is the subtle star and customers can come in to hang out or attend events with no pressure to buy.
Sonos followed with a second studio in New York in 2016 – a super-cool SoHo space, with individually designed room pods, which demo the connected power of speakers in a home-style setting. The store is a beautiful art installation style space that connects culture, music and sound.
New York is back on form as the world’s number-one retail destination: Devialet recently opened its own stylish showroom on the same SoHo street as Sonos, while Google opened a pop-up ‘Made by Google’ store around the corner before Christmas. Branded a ‘little corner shop’, it had a VR forest installation where you could try out their Daydream headset and pixel phone interface.
The Internet of Things is hugely exciting, widely talked about and poorly understood. Trusted retail brands have an opportunity to introduce them and show how they can enhance our lives.
John Lewis has Smart Home in Oxford Street and in its stunning new store in Leeds.
My favourite IoT concept is Target’s Open House in San Francisco. This super-cool store is a Perspex ‘house’ with living room, kitchen, nursery and garage. Transparent colour walls come alive to explain how products can connect in real world situations. Sensors for your baby can connect to cameras, so parents can monitor remotely. Connected speakers can play lullabies and lights can dim automatically as children go to sleep. The interface throughout the store combines live product and well-crafted video content on large touch-screen tables. This is how multi-brand retailers establish credibility and loyalty.
B8ta is a start-up version of Target Open House. First launched in Palo Alto in the heart of Silicon Valley, B8ta now has stores in Santa Monica and Seattle. It pioneers a new approach to retail, since its revenue comes not from selling product, but from renting space in store to start-up tech brands who want to learn how to bring new product to market. The store is a test lab, which measures how customers interact with product, and then sells that information back to the brands. The store itself is a sleek and stylish gallery of the coolest new connected technology, from phone-controlled drones to smart luggage and home security.
By far the biggest trend in retail is the fusing of hospitality. Microsoft’s Digital Eatery in Berlin is a social lounge, with a great café at its heart. It displays Microsoft products almost as an afterthought, alongside comfy sofas and communal tables. Charming and stylish, this is the best thing Microsoft have ever done in retail.
The big news, of course, was Samsung 837. Located in New York’s Meatpacking District, this amazing space is the ultimate challenge to Apple. Billed as an ‘unstore’ – the only thing you can actually buy is coffee and doughnuts, while you hang out in the huge, comfy, first-floor lounge. A giant auditorium with a screen made out of 94 screens, stretches three stories high. Simulator rides demonstrate Samsung VR technology, while a changing programme of art installations combine culture and technology. Social Galaxy, for example, turned your own Instagram handle into a video tunnel, while your own selfie was broadcast on the main screen made out of thousands of pixel photos. The ultimate in me-tail indeed.
Great design matters, but ultimately the future of physical retail is all about community, hospitality and expert solutions. If you want customers to get up from their sofas and look up from their phones, then your stores have to surprise and delight.