A quick Google search for the phrase “retail is dead” generates over 170 million results. If you look a little deeper over those results, you’ll find prognostications from each year in the last decade proclaiming that the internet has put away in-person retail once and for all. In fact, a Forbes article back in 2017 titled Retail is Dead. Here's What To Do Now posited that brick-and-mortar retail space needed major redesigns and new focus on the in-store experience to succeed.
The pandemic then threw a major wrench into major retail operations. The accelerated adoption of online shopping created major difficulties for retailers to adapt in real-time and had lasting effects on what consumers expect from retailers. In spite of these shifts, according to research from Dynata and Quickbase in-person retail remains the top choice for more than half of shoppers.
Brands that are continuing to increase business from in-person retail are meeting consumer expectations and giving customers a reason to visit. So, what’s influencing those choices and how can retailers make sure their spaces fit? Those answers are becoming clearer.
Buy Online, Pick Up In-Store
It may seem counter-intuitive, but a significant driver of retail foot traffic begins with online transactions. Buy Online, Pick Up In-Store (BOPIS) was a retail choice that became a necessity during the early days of the COVID-19 pandemic. While the necessity has waned over time, the popularity of BOPIS has continued to grow and is now the preferred option to waiting on shipping. Catering physical spaces to customers coming in to merely pick up purchases is paying dividends for businesses that have redesigned their spaces properly.
BOPIS provides consumers with flexibility and control over their shopping experience. It blends the convenience of online shopping with the benefits of in-store interactions. This hybrid model aims to meet the evolving needs and preferences of modern consumers, enhancing their overall satisfaction.
BOPIS has the potential to increase foot traffic in brick-and-mortar stores. When consumers visit the store to collect their online orders, they may be more likely to make additional purchases. In fact, according to research by Raydiant in 2021, more than half of consumers made an additional purchase in store while picking up a BOPIS order. This benefits retailers by providing opportunities for upselling and cross-selling.
Shop-in-shop, also known as "store-within-a-store," is a retail strategy in which a designated section or space within a larger store is dedicated to a specific brand or retailer. It involves creating a miniaturized version of a brand's store or a separate retail concept within an existing store. Examples of shop-in-shop are popping up in many major retailers like Target,Bass Pro Shops, and Nordstrom.
The mechanics and features of a shop-in-shop are straight-forward.
- Space allocation: The host store chooses a specific area within its premises to be occupied by the shop-in-shop. This space can range from a small corner to a larger section, depending on the agreement between the host store and the brand or retailer.
- Brand identity: The shop-in-shop is designed and decorated to reflect the brand's identity and create a distinct shopping environment that aligns with the brand's aesthetics. This may include branded signage, displays, fixtures, and overall visual merchandising elements.
- Product assortment: The shop-in-shop typically showcases a curated selection of products from the brand or retailer it represents. These products can be complementary to the host store's offerings or cater to a specific target market. The assortment may include a range of merchandise, from clothing and accessories to electronics, cosmetics, or home goods.
- Brand experience: The shop-in-shop aims to provide customers with an immersive brand experience within the larger store environment. It allows the brand or retailer to showcase its unique selling proposition, create brand awareness, and engage customers through interactive displays, product demonstrations, or promotional activities.
But why would retailers give up precious space in any of their locations?
Shop-in-shop arrangements offer a symbiotic, beneficial relationship to both the host store and the brand. A compelling shop-in-shop concept can attract customers to the host store who may specifically visit the brand or retailer being featured, potentially increasing overall foot traffic (e.g. Going into Target specifically for Disney, Starbucks, or Ulta). The host store can expand its product range and diversify its offerings by incorporating popular brands or retailers through shop-in-shop arrangements. This can attract new customer segments and enhance the shopping experience.
Understanding Customers and Data to Inform Redesign Efforts
Meetings consumer expectations are an evergreen, major concern for retail brands of any size. While understanding the trends in the market is critical, it’s not the only insight that organizations rely on to make major decisions like store renovations. Managing large real estate footprints takes a ton of input from many departments across your business. Unfortunately for real estate executives, gathering all that data and information in a cohesive space is a challenge.
Leading organizations are making major redesign decisions by first prioritizing their data and ensuring the best possible information is always available. For most organizations, all of the information they need is collected, but isn’t easily accessible. In addition to consumer trends, data like sales figures, customer satisfaction insights, customer traffic data, operating expenses, and more may all be housed in separate systems. Best-in-class retailers are turning to no-code dynamic work platforms, like Quickbase, to build the solutions they need to bring this insight together in a clear single source of truth.
Once this data is collected, real estate leaders can capture the whole picture of their retail performance and make the best possible decisions on how to construct their space.
Brick-and-Mortar Retail is Very Much Alive
Despite the many predictions for the demise of retail, forward-thinking, data-driven retailers continue to adapt and thrive. These leading organizations all have two things in common—they understand their existing real estate portfolio performance and they have a feel for what customers expect when they set foot in a retail location. One without the other risks putting the health of your organization at risk. Making smart decisions to make your space work for customers demands that you lead real estate management with a single source of truth.