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Brand Strategy Retail Marketing

Letting customers have their cake and eat it: the challenge for physical retail

By Edward Steele

August 20, 2021 | 63 min read

It’s not news to say that retailers with physical store space in 2021 are experiencing a world of great uncertainty and challenge. On the one hand, when non-essential retail reopened in April queues formed outside the likes of Primark, and Springboard data shows that retail footfall leapt 330% versus the previous week.

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Can the physicality of real-world retail be replicated?

However, footfall for July was down 28% v 2019. Prior to ‘Freedom Day’, a poll by YouGov showed that 58% of people were nervous about restrictions being lifted, so a swift return to browsing the shops will not be for everyone.

The acceleration in the shift toward more online shopping during the last 18 months has been well documented. But it is just that, an acceleration of an existing trend due to e-retailers’ ability to trade during lockdown. Physical retailers now need to think about what is going to fuel the e-commerce trend in the future, and how to overcome the threat.

Although convenience and choice are and will be e-commerce’s core strengths, increasingly online specialists are muscling in on physical retail’s historic advantage – the ability to deliver an immersive and more satisfying shopping experience. This is what physical retailers need to worry about most.

E-commerce is delivering more of what people want, so they are doing more of it – whether it’s offering the chance to experience a product before buying through the likes of Amazon Prime Wardrobe or the incredible Ali Baba and Ford car vending machine in China, or using social commerce apps including Facebook Shops to interact directly with independent retailers and explore their product range in a single leisure-focused environment. Foresight Factory data shows that 28% of people in the UK have bought something via social media so far in 2021, which is a sign of how habituated we are becoming to buying online.

The physicality of retail

Even without the Covid-19 pandemic, both retailers with a legacy of physical shops and online specialists faced the same challenge – when it comes to shopping, we don’t just want one thing. We want it all. We want to have our cake and eat it.

We like to shop locally, and we want to touch and feel products before buying. We also want the ease and choice that online shopping offers. So the trick for physical retailers is to give shoppers the best of both worlds by integrating physical and digital together.

This can be done in relatively functional ways, such as McDonald’s introducing ordering screens. This mimics the ease of choosing and customizing products that online offers, along with dodging the social awkwardness that being picky can bring. But, let’s be honest, ordering screens are there for operational efficiency, not for customers. What retailers really need to aim for is to elevate the shopping experience beyond the one that e-commerce can offer.

One example of a retailer doing this well is Alepa, a chain of convenience stores in Finland. Being a local store makes Alepa convenient, but of course its range is limited. The retailer changed this by using a chatbot to let shoppers request specific items be stocked in their local store. The top requests for each store then appear on the shelves. In this way, Alepa gives its customers more choice, plus the personalization they are used to online, increasing the feeling that it is their local store.

Another retailer to learn from is Burberry, which last year opened a store in Shenzen, China, that allows customer to use the WeChat social app to unlock an enhanced experience. Shoppers use WeChat to scan QR codes and explore the product range in more depth, interact with store displays, select clothes to try on and choose fitting room music. When customers complete actions in store with the app they are also rewarded by unlocking store features such as exclusive menu items at the in-store restaurant.

Luxury Daily

Finally, another example from China, this time from Nike and the launch of its Joy Ride shoe. This case study shows how a digital activity that customers are already participating in can be woven into the in-store experience. Nike partnered with an AR game, Monster Hunt, offering exclusive in-game bonuses that could only be unlocked by visiting a Nike store. This gave people a compelling reason to go in-store in a way that was a natural fit for the brand.

The challenge of making physical retail work is a tough one. But for those who can harness the power of the digital experience and use it to evolve and elevate the world of in-person shopping, the future is bright.

Brand Strategy Retail Marketing

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