This is article was first published in Focus Malaysia Property Section in the Oct 26 – November 1, 2019 edition. Should you have any queries you can contact the writers at email@example.com
Today’s article is based on a topic which we shared during the recent Council of Asian Shopping Centers (CASC) 2019 Conference held in Kuala Lumpur on the 10 – 11 September 2019. The conference’s theme this year was “The Now and The Future – The Mall Story”. In line with this topic, we wanted to have a brief conversation about moving beyond retail store design.
Shopping as we know it today revolves around 2 options, going online or visiting a physical store. Based on a recent study conducted by Deloitte in the United Kingdom, E-commerce accounts for about 20% of all retail sales as of 2018. Although a whopping 80% of all retail sales still takes place in store, the bulk of the growth within the retail sector is powered by online commerce.
Coupled with the shift in demographics today where younger shoppers are comfortable with shopping online and customers preferences for a fast and personalised shopping experience, retailers with traditional business models are struggling to keep up.
With the ever-increasing labour costs and increasing rents within the real estate space, retailers must look beyond the traditional retail model in order to survive.
While this may all seem a little bleak, there are retailers today who are aware of these changes and are rising to meet the challenges within the retail industry and today we would like to highlight 3 of their stories.
Alibaba’s Hema Supermarket – China
The first story we would like to highlight would be the Hema Supermarket by Alibaba. They have taken a significantly different approach to grocery shopping by blurring the lines between online and offline shopping by making your mobile phone a necessity when shopping in their stores. Shoppers get to find out information about the products they are going to buy such as its origin, when it was delivered to the store and even recipes on how to cook these products all from their phone. In fact, customers are required to pay for their purchases via their phones (i.e. through an app called Ali Pay, which is also created by Alibaba). Hema collects all the data from its customers purchase and shopping history and then crunches this data to curate a better and more personalised shopping experience for each one of its users the next time they visit the store again.
Not only is technology playing an important role in the Hema Supermarket; they (i.e. Hema) also understand that shoppers come to the store for an experience, hence they created a restaurant section within the store, where shoppers can pick fresh seafood which is still alive and have it prepared in store for their enjoyment.
Each Hema Supermarket also doubles up as a distribution point to deliver customers online grocery orders. Every online order received is picked up by an in-store associate, packed and delivered to the customers as quickly as 30 minutes. Hema’s efforts to erase to the lines between online and offline has brought a new convenience and experience to shopping for groceries.
This is a brand which is also shaking up the retail scene by distorting the lines between offline and online. Bonobos started as an online only store selling pants to men. However, many of its customers were requesting if there was any way they could try the pants first to see if they fit. Being an only online store, Bonobos quickly pivoted by asking its customers who wanted to try its clothes to come over to their offices where they had created a makeshift store front. This proved to be a hit and before long Bonobos quickly set up their first retail store. However, they chose to do it differently. Instead of setting up just an average storefront Bonobos calls its stores “Guide Shops” where customers are encouraged to book a 30 or 60 minute appointment where each customer is paired with an in store guide who will find them the right style and size that fits them.
What is unique about the shop is that it is a physical representation of the Bonobos website (i.e. it carries 1 item of everything that is on the website). So once the customer has done their fittings and chosen what they want to buy, they place an order online whilst still in the store and walk out hands-free. Their purchases will be delivered to them at their home. No need to carry any shopping bags out of the store.
As younger shoppers (Gen Z & Millennials) exercise more of their purchasing prowess, many luxury brands have struggled to connect to these young shoppers. Millennials and Gen Z do not seem to identify with existing luxury brands but one brand seems to be bucking that trend. Based on 2018 earnings figures, millennials (age 35 & below) made up the majority (62%) of Gucci’s sales making Gucci one of the hottest fashion luxury brands in the market for millennials and Gen Z. So what have they done to differentiate themselves in this space?
In their recent store in Wooster – New York, Gucci decided to take a different approach to their store design by giving millennials shoppers a 70’s & 80’s SOHO atmosphere which centred around a free-wheeling attitude towards music, film, fashion and art.
The store was also packed with experiential elements such as a screening room where custom made Gucci headphones and armchairs were used to showcase films and documentaries while also featuring Gucci’s latest collections. By encouraging customers to spend more time in the store, Gucci is transforming their store into a space for experiences. To top it off, Gucci is also utilizing technologies such as Augmented Reality to allow shoppers to customize their very own totes and sneakers. Gucci’s transformation of their store from a place of commerce to a place of experience has not only revitalised the brand but has also energized their bottom line.
The changes made by these 3 brands reminds us that effective design can have tangible and far reaching impact on brands and businesses. It is our role as retail designers to help narrate the brand’s story through spaces that are more stimulating by combining design, technology, knowledge & service to create retail brands that are both captivating to shoppers & profitable for brand owners.
article by Tim Liew & Pamy Wong
Retail is in our blood. In our 15 years as retail consultants and designers; we have worked with retail brands with only 1 goal in mind, to build profitable businesses for my retail clients. Connect with us if you have more questions about this article or even your thoughts on this sharing. Please feel free to share this piece with your friends who are in the restaurant business. For more questions about how we can help in working with you to design your retail space which will connect with your shoppers, connect with us at firstname.lastname@example.org #VisCreative #DesignProfitableSpaces #Retail #Business #Money #Mall