While retail stores and shopping malls are recovering from the impacts of the pandemic, the industry may never rebound from the decades-long decline of the American in-person shopping experience. The number of malls across the country had fallen 72% from its peak of 2500 in the 1980s to just 700 in late 2022, and experts don’t expect a reversal. Retailers are battling the effects of inflation, ongoing supply chain issues, and the impacts of widespread economic uncertainty on discretional spending, as well.

So are physical stores dead? Not necessarily. As the American writer William Arthur Ward famously shared, “The pessimist complains about the wind; the optimist expects it to change; the realists adjust the sails.” Retailers are being challenged to adjust the sails.

It’s important to remember that today’s in-store retailer is not only competing against other stores with similar wares but the entire online shopping experience. And as the space grows more competitive, they’re being challenged to transform physical stores into a complement and extension of the online experience in true omnichannel fashion. 

Some are rising to the challenge. Will your brand be among them? Here are four ways retail leaders are reinventing the in-store experience in physical locations to reduce operating costs, drive new business, and create exceptional customer experiences.

Physical stores as fulfillment centers

Stores are increasingly being used as fulfillment centers to reduce costs and improve the efficiency of last-mile delivery. Dick’s Sporting Goods and Loft are among the brands that have implemented ship-from-store to get products to the physical location nearest the customer, reducing delivery times significantly.

Product returns are an ongoing challenge for e-commerce retailers, as the average e-commerce return rate hovers around 20-30%. More than half of buyers cite free returns and exchanges as the second-most impactful factor in their decision to buy from a brand, so retailers need to make returns as simple as possible. 

One creative solution is to incentivize returns to a physical store by offering free shipping to the nearest location, or free returns if the customer drops off the merchandise themselves. This can help reduce shipping costs and return processing time. It also gets the customer back in-store and can help inspire repeat purchases and drive loyalty.

Recommended reading: 7 Key Trends Driving The Future of Retail

Automation-assisted showrooming

Showrooming is a trend whereby consumers visit a physical store to see, feel, and explore their product options, then make their purchase online. When smartphones initially exploded onto the scene, comparison shopping while in-store was perceived as a troubling trend for retailers. However, this omnichannel experience can be shaped into a rewarding, fulfilling one for consumers and actually drive increased sales and loyalty.

Moreover, technological advancements enable retailers to operate showrooms in physical locations with minimal to no staff. According to Capgemini, most consumers (66%) believe that automation can improve their shopping experience by improving the retail experience.

Customers can be greeted by robots capable of fulfilling the role of store associate, shopping assistant, interactive kiosk, product finder, and security guard. Take LoweBot, for example. Even the early prototype could communicate in multiple languages with customers in the home improvement store, help with inventory monitoring, and guide customers around the store to find products. 

Experiential locations

Japanese retailers are leading edge when it comes to creating exceptional, immersive, and innovative in-store experiences for customers. Take UNIQLO, for example, where customers can become models by trying on product and being photographed by professionals. The retailer also provides an app that enables customers to explore their style preferences and get directions to matching product in the store.

LUSH is another example of a retailer upping its experiential game. At its Harajuku location, customers use an app with AR content to learn more about and experience the products via 3D virtual reality functions and engaging videos.

In the US, M&M’s created fun immersive experiences to bring people together and allow them to spend a unique time in store. Its immersive experiences exclusive to the Mall of America retail location include games, a personalization station, and regional-specific decor throughout the store. In this context, pop-up stores are very meaningful as they can be set up for a specific event and for a limited duration, creating even more buzz by the urgency they generate. 

Recommended reading: Developing a Customer-Centric Retail Mindset 

Immersive retail experiences through self-service

Physical stores can empower customers to lead their own immersive experiences by enabling them to self-serve throughout the in-store shopping experience. Upon entry, a customer could be greeted by an automated assistant or self-serve kiosk with a QR code that opens an app that allows them to search for and explore product, then be guided right to it. The entryway can house a large digital display – a product wall – and help customers either locate the products in the store or upload products they liked to shop the experience online.

Using QR codes at the specific product display can encourage cross and upsells, as in this example from the Amazon Style store in Columbus, Ohio.

Customers could use mobile to pay, and using cameras to tally up purchases as the customer moves around the store would reduce even more friction as they could just scan their mobile and leave. 

Reinventing the in-store experience for your customers

Stores are not dead. Rather, the emphasis has shifted to the value created for customers who choose to be part of the in-store shopping experience. This is the time to be innovative, get creative, and reinvent the experiences customers have when they venture over your threshold and choose to interact with your brand in its physical space. 

I hope the above examples of how exciting and successful physical stores can be and how tightly integrated with online they can become inspires you and your team to take action. Want to learn more? Get in touch with the Method team, and let’s explore the possibilities for your retail business together.


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