The rapid growth of e-commerce is unlikely to put an end to the existence of physical stores. Both online and offline platforms will co-exist, becoming increasingly intertwined. However, in-store technological innovations will change shopper behaviours in shopping centres. These are the key findings revealed in the Retail Revolutions report by international real estate adviser Savills.
Retail Revolutions presents an overview of changes taking place on the retail market. According to the Savills report, retail stores are being turned into showrooms where products are not stored but are put out for customers to see. In the US, for instance, both Bonobos and MM. La Fleur have decided to phase out physical store sales altogether – the purchase can also take place online in their stores through internet-connected devices provided to customers.
Retailers are responding to the growing popularity of click & collect services by taking the opportunity to up-sell customers coming to their stores to pick up items ordered online. Owners of shopping centres also cater for new trends by arranging for parcel lockers to be put close to their retail schemes in order to enable customers to collect products. Speedy delivery is of overriding importance in the modern sales model. Most retailers focus on organizing their logistics systems to ensure one-day deliveries, and having a physical store helps to speed up the process.
Marta Mikołajczyk-Pyrć, Head of Retail Property Management, Property & Asset Management at Savills, said: “The line between e-commerce and brick-and-mortar retailing is growing increasingly blurred. The shopping experience has become longer with several pre-purchase activities, both online and offline, affecting consumer decisions. There is no escape from digitisation. Multi-channel retailing is not a thing of the future, it is a process that is already taking place.”
Another trend on the rise on the retail market is the use of store space for various events. In the United Kingdom, for instance, Uniqlo has incorporated a dedicated event space into its store on Oxford Street while Apple hosts panel discussions in its stores with notable public figures. On the Polish market, dominated by shopping centres, common areas serve the purpose. Such use of physical stores indicates that they offer additional shopping experience to drive sales, irrespective of the channel in which the actual purchase takes place.
In-store technological innovations are also being deployed on an ever larger scale. Media Markt in Belgium and the Netherlands is currently trialling Pepper, a robot that transports customers’ products to cash registers. In Poland, mobile apps provided by retailers are moving up in popularity. Essentially, they keep customers updated on products offered and current promotions while returning customers can earn points. Such solutions have already been put in place by health and beauty retailer Rossmann and H&M fashion stores, while hypermarket retailer Carrefour is offering virtual fitting rooms and an electronic sommelier advising shoppers on their choice of wine in the Posnania shopping centre. This is evidence of ongoing digitisation of the in-store experience by both retailers and shopping centre owners.
Marta Mikołajczyk-Pyrć, Savills, said: “In Poland, modern solutions for customers are being implemented primarily by property managers. On the Polish market, in addition to hosting events in common areas, shopping centre owners are introducing their own mobile apps and beacons on an ever larger scale. These technologies provide valuable statistics helping improve sales and enhancing comfort and the shopping experience. They are also a platform for loyalty programs.”