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Retail Reinvention – Part 3: Purpose & new store formats

19 Aug 2021

The purchase of products is part of our everyday lives and while traditional retail may be in decline, retailing is not – it just requires transformation into something new. In this three-part blog series, we will explore what the store of the future will look like, what kinds of innovations are emerging and the new propositions and technologies behind it.

In part one of our blog series, we looked at how traditional retailing is being disrupted and how the key to survival is reliant on reinvention. In part two, we looked at how touchless technologies, beacons and stores as experiential destinations are finding new ways into customers’ lives as the retail journey is transformed. Now, we will explore purposeful consumption, new store formats and what is required of retailers to win the ‘reinvention’ race.

Purposeful consumption

The impact of consumption on the environment and society has become part of the mainstream consumer conscious, with 53% preferring retailers they shop with to showcase a sense of purpose and give back to community. This context unlocks opportunities to offer users new ways to shop by creating curated products or services in line with their social, economic, and environmental values.

Brands have started to respond to this trend and are finding innovative ways to communicate solutions. Launched last Winter, Looop by H&M, is the world’s first in-store recycling system, turning unwanted garments into new ones. In just eight steps, it shreds them and knits a new piece from the fibers – using no water or dye in the process.

As a logical extension of their already laudable environmental commitment (‘we’re in business to save our home planet’), outdoor fashion brand Patagonia has launched ‘Worn Wear’ – a website where customers can trade, sell and buy second-hand Patagonia goods, as well as learn how to repair rather than repurchase. With an explosive growth totalling $800m in yearly revenue, Patagonia’s approach to sustainability has had a tangible increase in their brand equity.

Innovations are not limited to fashion, however. UK value grocer ASDA estimates it will save one million pieces of plastic a year with its new sustainable concept designed to help shoppers reduce, reuse, and recycle. They have partnered with big consumer brands such as Unilever to pilot new ‘unwrapped’ refill zones, offering more than 30 household staples including dry goods, detergents, and beauty products.

New store formats

The collapse of once established retailers leaves gaping holes in high streets and malls across the globe. The big question now is, of course, what to do with all the space?

Evolution is the word of order for shopping malls and department stores. Faced with a decline in foot traffic, they are now being called upon to convert empty commercial spaces into something else and reimagine retail environments from multi-level boxes to more exciting places in sync with customers’ needs. Majid Al Futtaim, the mall operators behind the innovative Mall of the Emirates, have converted the empty Debenhams unit at City Centre Deira into a unique food court, featuring sustainability, with a focus on home-grown food, live cooking stations, street food and a retail theatre. This is now the anchor for a major redevelopment of the mall.

Target has recently opted to have a bigger space in its stores for Apple products, allowing customers who are interested in Apple devices to check them out while shopping for other things in Target, making it convenient for them to merge two trips into one. But not every retailer has such a large area to work with. In fact, successful stores of the future will be ones that, irrespective of size, are continually innovating.

One way for retailers to stand out is by focusing on pop-up stores. Growing in popularity in recent years and creating new opportunities for exploration while saving on costs, these spaces are open temporarily to show off a particular line or product. Stella McCartney, for example, is celebrating the post-pandemic reopening by featuring different local businesses in its Old Bond Street flagship store.

As online retail becomes even more of a vital part of our everyday lives, so does developing new solutions for logistical pains. Finland’s state-owned postal service Posti, has opened a new type of high street click-and-collect store called Box, where e-commerce meets the physical space. In addition to parcel collection, there are dedicated spaces for customers to unpack goods, fitting rooms to try on clothing, facilities to repackage returns and recycle packaging. There is even a dedicated pop-up space for up-and-coming direct to consumer brands to showcase their products. Who said post offices must be boring?

Winning the race

The pandemic has not impacted innovation; instead, it is accelerating existing trends, rocketing online, and consolidating the importance of sustainable, ethical, and responsive retail.

Technology is here to stay, and experiential spaces will soon become the norm. However, the challenge lies within ensuring solutions are relevant and real-world, otherwise retailers run the risk of implementing expensive one-off novelty experiences which fail to bring customers back into stores – whether physical or digital.

As consumer expectations evolve and new entrants and technologies disrupt the market, winners in this race will the ones who understand their customers’ needs and can best strike the balance between automation and the human factor – knowing how to both engage and retain their customers.

Our ambition is to partner with clients to reimagine the business of shopping, while always engaging and retaining loyal customers, helping them every step of the way on your transformation journey. In this new digital world, Inventive Shopping becomes a powerful engine for growth. To find out more, get in touch.