With retail bouncing back in 2023, we take a look at the brands preparing to capitalise on it by opening new stores and ramping up in-store marketing.
Retail expert Mary Portas has predicted that “physical retail is on the cusp of an exciting new dawn.” The so-called Queen of Shops says her firm Portas Agency has seen signs that physical retail is not only rejuvenating but also reinventing.
ll around us, retail space is flexing, expanding and becoming ever more layered,” she says. “It’s driven in part by a post-pandemic desire for connection, but also the need for a multi-sensory real-world counterpoint to the constant, one-dimensional screen scrolling that has gripped so many lives.”
Consumer data indicates that shoppers are indeed returning to the high street. The popularity of online shopping among UK consumers has fallen -8.2 percentage points since last year, according to a survey by research platform Attest. Today, 42.5% of shoppers favour online shopping, while 22.9% favour in-store.
Although the balance is still tipped in the internet’s favour, what’s most compelling is that a significant 34.6% of Brits say they split their shopping evenly between online and offline. This means that both channels have an important role to play, and that physical retail is far from dead.
Recession? What recession?
Retailers who are poised to tap into this resurgence in real-life shopping are investing in their stores right now, opening scores of new locations throughout the UK and Ireland:
- Marks & Spencer is injecting £480m into 20 new stores
- DIY retailer Screwfix will open 80 new locations
- The Fragrance Shop have plans to open over 100 new storefronts
- Men’s formalwear brand Moss Bros will open 10 shops
- Fashion retailer Ted Baker has signed a franchise agreement for 30 new stores
- Crew Clothing will open 8-10 shops in market towns
- Cake box will open 52 new stores and 10 Asda kiosks
Other retailers are ploughing money into building a high street presence that supports their online business. Luxury jewellers Laings has committed £10m to expanding its showroom in Cardiff, and launching a new 9,000 sq ft premises in Southampton.
These locations will not only showcase the brand’s range, but also offer access to highly skilled craftspeople specialised in watchmaking and goldsmithing. Joe Walsh, CEO of Laings, says the retail stores are, “where our clients can immerse themselves in the history and traditional expertise of our business.
And at the flagship London store of Swiss high-performance running brand On, shoppers can find revolving stages featuring robotics and interactive displays. Till points, on the other hand, are nowhere to be seen.
On co-founder, David Allemann, tells Fashion United: “We prioritise interaction over transaction in our retail spaces as most of our transactions happen on our website, and we use our stores as a canvas to speak to our community and have direct interaction with our consumers.”
Putting the fun back into retail
According to Mary Portas, to thrive in the post-pandemic environment, retailers simply have to ask themselves: “What can’t Amazon do?”. The answer, she says, is to create spaces that are magnetic, culturally relevant and desirable. In short, retail in real life should be fun.
Recent months have seen some great examples of brands putting the fun back into retail, including Balenciaga, which covered its Mayfair store from floor to ceiling in pink faux fur, and Louis Vuitton, which launched a pop-up at Harrods to celebrate its collaboration with Japanese artist Yayoi Kusama. The activation included a mirrored retail space mimicking the artist’s Infinity Rooms, and a 15-metre-high statue of Kusama that appeared to be painting the department store in her signature polka dots.
But it’s not all about eye-popping spectacles; savvy brands understand that it’s meaningful experiences that consumers most desire. Take Superdrug, for example, which hosted a three-day beauty festival in London where visitors could enjoy 30 different brands, makeovers, hair styling, tutorials, and free samples all under one roof.
Consumers can only get experiences like these by leaving their laptops and physically turning up. Likewise, it’s the only way brands can truly immerse consumers in their product. However, to get maximum value from experiential activity, it should form part of a cross-channel experience. Louis Vuitton’s Kusama collab demonstrated this beautifully, with features that pushed people from online to offline and back again.
Visitors to Harrods were encouraged to download a dedicated app where they could play mini games to earn digital “seeds”, which are then grown virtually and used to earn collectibles and unlock rewards. Louis Vuitton also partnered with Snap to create an augmented reality filter that covers six global landmarks with polka dots. Meanwhile, with only a few of the Vuitton x Kusama products available for purchase online, shoppers who are hungry for the limited-edition pieces are driven back to the physical store.
“The key here is being able to move from awareness to discovery to buying the product,” Zoha Zoya, group creative director at R/GA, tells Vogue. “You can build a relationship with your customer beyond a one-off activation to an ongoing relationship where they become even more loyal to the brand.”
Switching marketing budget back to retail
During the pandemic, many brands diverted marketing budgets away from physical stores and into ecommerce. However, leading retailers believe pouring everything into digital marketing tactics would be a mistake in 2023.
Chocolate maker Hotel Chocolat said it had deliberately lowered its digital marketing spend banking on a return to stores. While it subsequently saw a decline in online revenues over the Christmas period, thanks to a strong retail performance, it recorded an overall increase in like-for-like sales. The brand now plans to open 50 new stores over the next three to five years.
“We expect the trend of customers reverting to stores to continue in the second half, which is advantageous to the brand because our stores are well invested to deliver an uplifting experience for customers,” Hotel Chocolat said in a statement.
Delivering “an uplifting experience for customers” will indeed be critical for retailers looking to win back footfall, states Deloitte in its Retail Trends 2023 report: “The demand from consumers for physical experiences will force retailers to offer immersive, technology-filled stores as standard.”
Most marketers agree: 67% say they are investing in more engaging in-store experiences to attract people back to the high street, according to new data from in-store digital engagement company M-Cube.
“This research reveals that brands are shifting away from the online focus that has polarised retail in recent years,” said Alexios Blanos, UK business director at M-Cube. “With the technologies available, it’s an exciting time and a chance for rebirth for the retail industry.”
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