$20B+ is being invested into reimagining retail store formats.
In an age of digital domination from Amazon Prime and online shopping, major retailers are strategically responding.
They're transitioning from places where people buy (“I need this one thing”) to venues where they shop. This evolution in retail is a response to the growing need for a more dynamic shopping experience that combines the efficiency of digital platforms with the sensory satisfaction of in-store interactions.
Let's explore how department stores, grocers, and specialty stores innovate to create immersive, technology-driven, and community-focused retail spaces.
1. The move to “experience” layouts
Apple Stores are prime examples of experience layouts.
Their open-plan layouts, hands-on product displays, and spaces for workshops and tech support (the 'Genius Bar') have set a standard for retail. Brands such as Samsung, Dyson, Tesla, and LEGO are creating formats. Brands recognize the visceral and often nostalgic response brought on by touch and communities of shared experiences. Have you noticed that store personnel, more often, hand you a product?
These stores are designed to be destinations where customers learn, experience, and connect deeply with the brand and community. Building a customer journey map is an excellent way to drive in-store traffic. Determine which parts of your online sites bring customers in-store for learning, customization, and community. Build that bridge into your mobile app.
2. Personalized In-Store Experiences
Integrating technology in physical retail spaces paves the way for highly personalized shopping experiences.
Retail chains use data analytics and AI to offer personalized product recommendations, similar to online shopping experiences. Nordstrom, for example, has implemented technology that allows them to provide customized shopping sessions based on customers' online browsing and purchase history. Nordstrom started leaning into this strategy in 2022 and achieved 38% of its sales from digital.
Design for data; the riches are in the niches of data. Capture and report on where consumers linger or not and how that can be tied into your mobile app.
3. Point-of-Destination: Community Hub
Retail spaces are community hubs.
Customers can participate in events and workshops, adding value to their shopping experience. This approach increases foot traffic and provides valuable data analytics and partnership opportunities. A noteworthy example is Michaels Stores, which hosts in-store craft classes and workshops, turning shopping trips into experiential visits. These events drive sales and provide insight into customer preferences and behaviors.
Retailers know buying preferences based on the schedule of these events. The data is collected by loyalty apps and sanitized information from credit card brands.
4. Put a pin in it.
The transformation of retail stores into destinations is a strategic response to the evolving consumer demands in the digital age. This shift revitalizes the physical retail space and creates an evolving ecosystem where digital efficiency and physical experience coalesce. As retailers continue to innovate, the importance of blending online convenience with in-store experiences becomes increasingly evident.
- Design and build experiences with the store as a point-of-destination.
- Create ecosystem partnerships. This has the opportunity for goodwill, broader wallet share, and embedded payment solutions (more on this in a future article).
- Know your flow. Create process maps of the customer journey you want to encourage.
- Measure twice and cut once. Design and planning yield superior results.
What are your thoughts about the point of destination and your retail experience? Do you buy or do you shop?
