The future of retail inside brick-and-mortar stores

Automation, artificial intelligence and other tech enhancements are definitely part of the future of retail, but FS’ retail trends report is more focused on the unique experiences that a brick-and-mortar store, albeit a “smart,” connected one, can offer shoppers.

Jacquemus’ new boutique in Paris is an example of the Hyperphysical Experiences trend that FS sees as key to brick-and-mortar success.

“I think for the longest time, we’ve been focused on digital things like the metaverse (and) social commerce,” said Nivara Xaykao, director of culture and consumer insights for New York-based FS, a global creative trend intelligence agency, during a recent seminar on “The Future of Retail.” “But as we were doing research for this report, we found that we were getting the most excited about what’s going on at the brick-and-mortar level. … As people get back out there into the world, we also feel like physical stores will reassert their importance once again.”

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Omnichannel retail continues to be important, Xaykao said, with brick-and-mortar locations increasingly serving a marketing role as a place where shoppers can learn more, touching and seeing products up close, while developing a relationship with the brand. “At the same time, consumers are seeing no distinction between physical and online or hybrid environments, so we always stress that businesses should look at these different channels as one united storefront,” she said.

“The Future of Retail” is part of a series of “The Future of…” seminars intended to help brands, designers, marketers and others identify innovations, key movements and consumer shifts so that they can better understand their current markets and what’s ahead. FS gave attendees an overview of about a half-dozen retail trends. (Fuller reports are available to its clients.) We’re focusing more narrowly here on those most relevant to the home furnishings retailers.

The Service Shop

Research shows consumers — in particular, younger consumers — are less, well, “consumery,” with about four in 10 saying in 2022 that they are consuming less in general — up 10% from the prior year. Inflation may be driving some of that but, “in the long term, the primary motivator will be environmental, with the public increasingly expressing concern over the impacts of consumption,” Xaykao said. “As consumers buy (fewer) physical goods or turn to circular practices like resale, traditional retailers will have to seriously rethink their business models and explore new, sustainable revenue streams. In transitioning out of a material-based economy, services present the next frontier for retail.”

What this means:

  • Retailers could consider offering a host of practical services. Interior design services are a natural fit for home furnishings sellers, but some may begin offering reupholstery services, furniture refinishing or repair, too.
  • With consumers increasingly interested in sustainability, retailers can also serve as a drop-off point for people to dispose of or recycle packaging and goods.
  • Other service-related offerings could include product upgrades (such as on electronics), rewards programs and exclusive perks.

“Brands and retailers that can provide services with a more personal touch, especially when coupled with rewards programs, can stand out and really gain a competitive advantage,” Xaykao said.

Companies leading the way:

  • Online luxury marketplace Farfetch’s loyalty program includes a concierge service that gives its best customers access to exclusive sales. The app also matches customers with stylists who can provide personalized recommendations and track down hard-to-find items, according to FS.
  • Footwear and lifestyle brand Golden Goose offers a cobbler shop-within-a-shop in its new stores. “Much of the floor space is now dedicated to services like mending, cleaning, customization and product disposal,” Xaykao said.

Hyperphysical Experiences

“The pandemic really reframed humanity’s relationship to our five senses: touch, hearing, sight, smell and taste. We had this extended period of limited contact, (and) we saw the world flattened through digital screens, constantly doing everything remotely,” said Nico Gavino, strategist for culture and consumer insights for FS. “And (for some who got Covid-19), we experienced symptoms, including the loss of taste and smell. … These experiences really revealed the integral role that these senses collectively play in our daily health. So, with this in mind, we first see consumers returning to stores, seeking out those sensorial experiences that they may have missed out on.”

“Additionally, as e-commerce continues to drive a greater share of sales, brick-and-mortar stores and restaurants are going have to create an even more unique experience that really compels customers to return,” he continued.

What this means:

  • Retailers that want to bring shoppers into physical stores need to encourage touching and stimulate the other senses with lighting, color, sound and scent. It’s all about giving shoppers a reason to walk in rather than click to buy.
  • Furniture retailers may want to focus more on seating in their physical locations — a product category that may benefit most from in-person shopping as customers experience how it feels to sit in a chair or lounge on a sectional.

 “The future store is going to be a place to experience your products’ sensory attributes,” Gavino said. “So, take some time to think about what sensory attributes your brand can emphasize in your products, and really allow those attributes to take center stage in your store experience.”

Companies leading the way:

  • Luxury apparel brand Jacquemus’ new boutique in Paris is filled with pillows (including on the walls) and plush carpeting to envelop shoppers in a soft, soothing and relaxing atmosphere.
  • Our Place, a cookware brand, has made appealing to its customers’ sense of taste a key part of its first brick-and-mortar store in Venice, California. The space includes a café where it can also host cooking classes.

The Third Place

“Post-Covid, consumers are leaning out again, looking for local spaces to connect with community offline, often through third places. Sociologist Ray Oldenburg came up with the Third Places Theory to describe the importance of the spaces between the home (first place) and workplace (second place), such as coffee shops, public parks and libraries. … Since the world has largely resumed normal indoor activity, many retail outlets have begun to act as third places, as well,” Xaykao said.

To become a third place that draws people in regularly, retailers need to offer amenities that “contribute to individual well-being and enhanced quality of life,” instead of focusing solely on the transactional shopping experience, she said. Brick-and-mortar booksellers who have long included cafes in their spaces understand the importance of this.

What this means:

  • Retailers can offer lounging areas, cafes, bars, libraries, even small outdoor parks — anything that encourages shoppers to linger and to return often.
  • In keeping with this idea, brick-and-mortar stores can also offer events, from speaker series to parties, that encourage people to visit the location even when not necessarily shopping for a specific item. Once inside, they are more likely to browse and buy.

Companies leading the way:

  • Jins, an eyewear brand, created a community-centered store in its hometown of Maebashi, Japan. Called Jins Park to emphasize its role beyond a retail store, the location includes a bakery, cafe, playground and garden, as well as its eyewear.
  • Dear Friend, a bookstore in Brooklyn, New York, has a café — not unusual in that retail category. But it offers food and beverages for dine-in only and bans laptops at the counter to encourage social connections among customers.
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