Where is Physical Retail Heading? Navigating 3 Diverging Strategies

The way people shop in stores is changing. Concerns of safety still exist, and many people continue to practice social distancing. Furthermore, with the emergence of COVID-19 variants, in-store shopping behaviors are prone to shift overnight.

Although all retailers are now operating in the same pandemic era, there's no consensus among them on what in-person shopping should look like.

What we do know is that all brands with a fleet of stores have the opportunity to boost business by bridging the physical-digital gap. From services like buy online, pick up in-store (BOPIS) to unique, social media-friendly moments at physical locations, there are many ways to upgrade and integrate brick-and-mortar and online experiences.

Both standalone retailers and department stores have been experimenting with a variety of approaches designed to entice today’s shoppers. Let’s examine three emerging strategies.

In-Store Shopping in the Pandemic Era: 3 Takes

1. The 'In-and-Out' Strategy

For some retailers, like Ikea, winning over modern shoppers means departing from the “treasure hunt” store layout in favor of designs that promote convenience and speed.

In 2020, Ikea announced plans to open 50 locations in urban areas, and began rolling them out last year. Instead of its traditional, maze-like layout — which forces shoppers to walk down multiple aisles before reaching checkout — the smaller-format stores put convenience front and center. They feature curated merchandising in-store with a greater selection of inventory online.

In addition to helping health-conscious shoppers avoid spending unnecessary amounts of time indoors, the decision to launch the new store format comes in response to a general shift in consumer preferences. When consumers can more easily shop online, convenience is pertinent to creating a satisfactory in-store experience.

2. The 'Stay a While' Strategy

On the other end of the spectrum, there are retailers like La Samaritaine, a 151-year-old department store in Paris, that just reopened after a 16-year closure.

Unlike Ikea, La Samaritaine invites shoppers to spend time inside its store by providing a highly experiential and “Instagrammable” environment. Inside the architectural landmark building that houses La Samaritaine, you’ll find photogenic decor, restaurants, bars, and nail and hair salons.

During a time when shoppers have demonstrated they're willing to spend big online, luxury retailers are looking for more ways to draw shoppers into brick-and-mortar stores, too.

“Brick-and-mortar isn't dead in our mind,” Eléonore de Boysson, DFS Group president for Europe and the Middle East, told The Financial Times, “but we do have to offer something different than just product — we need to give the client a real experience which goes far beyond shopping.”

3. The 'Somewhere in Between' Strategy

Somewhere in the middle of this spectrum, there are stores like the new Bloomies in Fairfax, Virginia, which combines a smaller footprint, highly curated product selection, technology, and food and cocktails via an in-store cafe.

It includes some staples of the traditional department store, like alteration services and in-store stylists, as well as some pandemic-era offerings, like curbside pickup and a “tech-enabled stylist service model” to facilitate better in-store product discovery.

In the new Bloomies, convenience and experiential retail are equally important to the customer experience, and both play a direct role in the store’s physical layout.

Let Shoppers’ Intentions Determine the 'Right' In-Store Experience

Merchandising, convenience, technology and experiential perks are all important components of the new store experience. Deciding the correct proportions depends on the type of retailer and its clientele.

The luxury handbag shopper isn't the Ikea shopper — at least, probably not on the same day. The shopper who has set out to find a wooden shelf, light bulbs and a soap dispenser probably desires to find these items as efficiently as possible. For Ikea, opening pared-down stores seems like a logical move — it promotes convenience and helps people exit the store quickly.

On the other hand, an in-and-out experience probably doesn’t appeal to the shopper who is ready to spend $2,000 on a new designer handbag. Presumably, this shopper wants an experience that feels more glam. A few photos against an Instagram-friendly backdrop, a cappuccino, and friendly conversation in an elegantly furnished lounge seems like the perfect setting for a special purchase.

The key for any retailer is understanding who their shoppers are and what elements of the customer experience they value most.

Whatever Route You Choose, Be Prepared to Pivot

The pandemic has taught all of us in the retail industry many important lessons. Curating the customer experience to fit the evolving preferences of your clientele is one. Staying agile in the event of the unexpected is another.

Regardless of the route you take — in-and-out, stay a while, or somewhere in between — retailers must stay agile so they can quickly adapt the in-store experience to rapidly changing conditions. Flexibility will be the differentiator as brands and retailers continue on the path towards finding the ideal format for physical retail.

Vered Levy-Ron is the CEO of Syte, a product discovery platform for e-commerce.