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Customer Experience CX Bricks and Mortar Retail

Re-imagining the retail store: the new, connected third place

By Bruno Garcia, Managing consultant



The Drum Network article

This content is produced by The Drum Network, a paid-for membership club for CEOs and their agencies who want to share their expertise and grow their business.

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March 17, 2022 | 6 min read

In town planning and sociology, 'third places' are the spaces that sit outside of the binary of our two main places: home and work. If the last couple of years have done anything, they've toyed with that binary, affecting the places in between. Bruno Garcia of Frog UK looks into the opportunities for retail stores to become a new kind of third place.

Frog name the retailers exploring innovation and embedding it into their physical spaces.

Frog name the retailers exploring innovation and embedding it into their physical spaces.

Post-pandemic digital acceleration has made efficient online purchases a given. Even the most conservative and traditional instore shoppers have adapted to online purchases for everyday needs. With online shopping providing extended shopping hours and flexibility with returns, the rise in online purchasing is expected to become the new normal. Because of the exodus of people from densely populated urban areas to greener locations, traffic levels and sales from retail stores are unlikely to go back to historical baselines.

But what happens to all the shiny, premium, high-street retail space brands are operationally invested in? And what will balance more meaningful experiences with reduced store level revenues?

The re-definition of the third place

According to CEO Howard Shultz, the backbone of Starbucks' success was being seen as the ultimate third place: an extension to people’s lives, a space where people could go if they didn’t want to stay at home or go to work. Though this competitive advantage is now considered mainstream, we can learn something here about building an experience.

Euromonitor’s 2022 consumer trends report showed 35% of consumers prefer experiences over products, and over the past six years, that number has grown significantly. But few high-street retailers have focused on transforming their store experience to provide customers with an alternative third place. With retail traffic and sales now at risk, it is time to scrap the old framework 'all that matters is traffic' and focus on building meaningful and unique experiences.

Retail as the new space for social bonds & community

Nearly 80% of millennials feel attending live events makes them more connected to others. Retailers should rethink their space to enable enhanced social interaction and socialization, in ways they haven’t done before., the 'family experience company', is the latest retail third place for families, overtaking the traditional toy store business. Activities such as Mozart for Munchkins and Pom Pom Caterpillar Game have enabled greater socialization and meaningful interactions for their customers. Through enhancing their retail experience, have seen 50% of customers returning once a month and 17% returning once a week.

Elevating store-within-store through partnered brand experiences

Store-within-store involves a retailer allowing other brands to have their own independent shop in-store to help tackle under-utilized space. Examples include Argos in Sainsbury's and Decathlon in Asda. This follows the logic of category complementarity, where brands come together with retailers to widen up the product offering.

Retailers can now work with brands to develop a truly unique experience. This approach requires a more thoughtful and strategic interplay, as they must partner up with brands that share common purpose and goals. Curating multiple online independent brands through stores is something Brit & Clik is doing successfully through experiential stores, small in size, macro in experience. A less disruptive but relevant example is Macy’s which added Starbucks in stores to allow people to have a coffee whilst shopping.

Providing personalized store interactions

Another way brands can improve experiences is by providing personalized interactions with customers.

In central London, IKEA’s store provides free planning and house organization services, rather than selling the products you typically see in their megastores. Succeeding on this model requires a powerful interaction between engaged store staff and customers willing to share data on personal projects. The retail store becomes a strategic data acquisition channel, where brands conquer customers’ trust, using data to provide truly personalized experiences.

At the CornerShop, Capgemini’s retail innovation store in partnership with SharpEnd and The Drum, the store’s atmosphere is personalized, and customers can control artwork, music and lighting from the moment they arrive in store.

Re-imagining the retail experience

According to Forrester´s 2022 consumer predictions, consumers are more willing to try unconventional brands, alternative ways to buy, and innovative systems of value like NFTs than they have been at any point in the past 20 years. Now is a great time to be bold, try new approaches, and push the boundaries of customer experience.

Zhongshuge Bookstore is a great example of a re-imagined third place experience. In this store, 80,000 books do not scare, but beckon immersive exploration. It includes creative areas, a study hall, and a social area with group tables decorated as a bamboo forest.

From now on, the retail in-store experience must take customers to a new, re-imagined and exciting third place, which entails community dynamics, meaningful personal interactions, personalization, and curated co-branded experiences.

Maybe Nike stores could become clubs, where members pay a subscription to multiple fitness and wellbeing services. Maybe Wholefood’s experience could help people plan their diets and live better.

Our ambition is to partner with clients to reimagine the business of shopping, while always engaging and retaining loyal customers.

Customer Experience CX Bricks and Mortar Retail

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frog is a leading global creative consultancy, part of Capgemini Invent. Partnering with passionate leaders and visionary entrepreneurs, we apply creativity, strategy,...

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