Whether it’s restaurants or retail stores, brands are defining and deploying the physical channel of experience in fresh and innovative ways. From creating conveniences to providing white-glove service, the physical channel of experience is one that really sticks with consumers. In fact, according to retail designer Sergio Mannino in Forbes, “The power of experience is unstoppable and it will also allow you to differentiate your brand from your competitors.” We know that the best retail and commercial spaces are where form meets function. What we’re seeing today is brands using their physical channel to test new concepts and expand the power of their brands in the mind of the consumer.
One trend we’ve seen continue unabated into the fourth quarter of 2018 is the number of online brands launching physical retail outposts. As we’ve previously noted, forays into the physical store include well-known online brands like Amazon and Warby Parker, but now, other less famous brands are making the leap into their physical retail environments. Most recently, Shopify has opened the door to brick-and-mortar retail stores with a “new retail concept conceived as a hub for local business owners to network and learn.” Their large floorplan store will feature furniture and décor while providing a home to local businesses – for workshops, demonstrations and meetings – all in a trendy LA neighborhood.
According to real estate investment company JLL, online only brands will open around 850 stores in the U.S. over the next five years, most clustered in high-density urban areas like New York and LA. What is driving this migration from online to physical? An intersection of two trends, actually. First, as gen-1 retail brands are closing down, premier physical spaces are opening up, so brands can take advantage of trafficked locations to bring new consumers onboard. Second, online brands are coming to understand the value of physical interactions with goods and are seizing opportunities to meet with consumers IRL (in real life) and wow them with the brand’s products and people.
When people think of quick service restaurants (QSR), innovation is often not the first thing that comes to mind. But many of these restaurants are exploring different formats and approaches to make customer experiences rise above consumer expectations of “fast food.” For example, Chik-fil-A – a restaurant that understands the concept of on-the-go better than many QSR brands – was one of the first to provide human order-takers in their drive through to facilitate traffic flow and customer experience. Now, they’re taking the on-the-go concept further, testing retail locations without dining rooms, to allow the brand to focus on delivery and catering orders, bringing their famous chicken to you.
Also on the QSR front, one tech trend we’re seeing is geolocations and geocaching to make quick service even quicker. This technology enables push notifications from QSR when a restaurant brand’s customers are out and about in their cars or just walking by. Consumers can opt-in and get reminders that their favorite coffee shop or burger joint is nearby, and their customized food or drink is just a click away. QSR coffee brands are also using their apps to provide customized convenience and curated coffees to customers as they rush to their next appointment by encouraging advance ordering and pickup at their nearby convenient locations, continuing deployment of digital into physical spaces.
If a brand is not quite ready to go all-in investing in build-outs and multiple physical locations, they can test new retail store formats through pop-up shops and prototype stores. That’s exactly what Wayfair is doing with two holiday pop-up shops in November. The Paramus, NJ and Natick, MA shops will feature home décor and housewares for sale, augmented with online ordering. The pop-ups will also feature hands-on workshops for home-improvement and design projects. Most interestingly, consumers will be able to browse hundreds of fabric swatches. This will enable them to create custom furniture, allowing an online only company to deploy a sensorial strategy with consumers able to touch fabrics and see the colors in store, not just through a computer screen.
New concepts are also on the marquee for Barnes and Noble. The book brand is launching a concept store in the Chicago area that features two “book theaters” as the brand looks at how to update and innovate the bookstore model. These theaters allow consumers “explore new books in what the company is calling a new ‘360-degree experience.’” This revamp on the brick-and-mortar experience allows the brand to take intelligence gleaned from its 600+ physical stores and marry it to the latest tech-trends, testing it in a prototype store. Before rolling out new concepts across its entire network, the concept store will allow the book brand to test what works and what doesn’t in just one location first.