Shreya Porekar’s Post

Had a fun time discussing the trend of smaller stores serving as showrooms and the increasing focus on experiential retail in a recent interview with The Atlantic. In our conversation, we explored how retailers are adapting by shrinking their physical spaces and emphasizing customer experience, rather than sheer volume of inventory. This shift, which we've also covered in our research on the role of physical stores in omnichannel retail (in Journal of Marketing, https://lnkd.in/gCNiZBa3 and California Management Review https://lnkd.in/gMwejgQi ) is shaping the future of retail. Smaller, showroom-style stores don’t just display products—they educate and engage consumers, creating deeper connections with the brand. For omnichannel retailers, this trend means more than just rethinking store sizes. It requires analyzing data from both online and offline touchpoints to make better-targeted decisions, utilizing regional online shopping behavior to optimize what’s shown in stores, and ensuring that the physical space provides engaging, multi-sensory, and memorable experiences. https://lnkd.in/gzxvgzbf

In a time when many retailers are downsizing or closing their stores, SEPHORA is going in the opposite direction. The global beauty retailer is preparing to undertake the largest capital project in its history: a complete re-design of its 700 stores in North America. A bold move. The key question: why would you double down on physical stores when many others are sizing down? Multi-brand retail is facing tough times. Macy's is closing 150 stores across the US in an effort to return to profitability. Kohl's, another department store chain, is closing 27 locations. On the other hand, Amazon and other online players are continuing to thrive, capitalizing on their online presence & delivery infrastructure. Sephora, however, has resisted the pressures that have led to store closures across the industry. And it's not the first time the company zigs when others zag. Since its founding, Sephora has been challenging the traditional beauty retail model. In the 90s, when luxury beauty brands typically sold products behind glass counters at department stores with sales associates, Sephora introduced the open, self-service environment: a revolution. The model allowed customers to explore new products, and encouraged them to try a wide range of items. This wide range, many of them indie or emerging brands, was another differentiator. Contrary to relying on a select group of high-end brands, Sephora opened its doors to smaller indie brands, offering customers options they couldn't find elsewhere. This helped them build a HUGE, loyal customer base and resulted in them becoming the (luxury) industry leader. But what made Sephora stand out the most all this time? Commitment to keeping their stores customer-centric. The store redesign follows this ethos: it's not about chasing the latest design trends, but aims to improve functionality based on data. Forget "store of the future", enter "customer journey of the future". What can we expect? 1. Improved checkout experience: Sephora's moving toward mobile checkouts, with retail associates equipped with mobile devices to avoid long lines. 2. Repositioning beauty studios: the services will move to the (more private) sides of the stores, as customers voiced their concerns about getting the treatments in the centre of the stores. 3. Enhanced lighting for selfies: the redesign will feature more flattering lighting to ensure customers look their best when taking selfies. 4. Rethinking gondolas and displays: Sephora is rethinking how products are displayed, particularly in its iconic gondolas. 5. Consistent global experience: whether shopping in NYC or Vancouver Island, a uniform experience will be installed. Sephora's decision makes sense for many reasons. This redesign is just the latest in a series of innovations that demonstrates the brand's willingness to invest in the best customer experience. For Sephora, the future looks bright and is happening in store. 💄

“Data from the United States shows retail foot traffic grew almost every month in the year to May 2024 compared with the previous twelve months. And the industry has refocused on the enduring value of stores as pillars of brand identity, sources of inspiration, convenience and competitive prices for customers.” “The ‘halo’ effect of the store is crucial in this resurgence. Stores offer an unparalleled way to legitimize the brand and build trust with local communities.” “This willingness to rethink store concepts and shopping experiences is at the heart of modern retail strategies. Look, for instance, at H&M’s new store in New York, which includes the brand’s first ‘pre-loved’ in-store experience offering second-hand assortments. Similarly, H&M’s new Seoul concept store includes a raft of digital innovations like immersive 360-degree fitting rooms.” “The most successful department stores today recognize the need to curate a compelling reason for customers to visit, whether that’s the tactile experience of being able to touch and feel the product, feeling a sense of exclusivity and personalization with ‘VIP-style’ experiences, or being able to tap the expertise of store associates.” “They also know it’s about curating a balanced mix of established brands, emerging labels and in-house lines at attractive prices. It’s why they’re increasingly offering startup brands the opportunity to sell via pop-up stores-in-store or digital marketplaces.” “Look at Hudson Yards in New York. While this strikingly designed mixed-use space initially struggled to attract footfall, especially during the pandemic, it’s since been transformed into a thriving retail, tourism and community hub. Key to its resurgence has been a flexible mix of luxury and affordable offerings and a regularly refreshed range of amenities, like barbershops, cobblers, wine stores, and day spas. It’s made Hudson Yards an essential location for daily shopping necessities and local socializing.” “In fact, according to a recent Accenture report, as much as 50% of all working hours across retail could be transformed by the latest AI models, in areas like inventory management, demand forecasting and supply chain optimization. Not to mention more effective personalization for customers. It’s no surprise that 93% of industry leaders are planning to scale up investment in the next three to five years.” - Jill (Puleri) Standish

Being passionate about Retail, it was great to read about Currys and Superdrug investing in their store estate, both refurbishing existing and opening new sites too. In fact Currys are investing in 65 stores and having worked for that business previously, demonstrates the importance of aligning the store experience to the customer need, especially in todays omnichannel world. Superdrug is celebrating 60 years on the High St and plans to open 25 new stores this year, as well as extending seven existing stores and refitting 60 over the course of 2024. Simply changing the space allocation and flow by category and bringing in new ranges helps to align with customer need as well as increasing sales of course. Over time some of the core ranges may become overspaced relative to their sales contribution, equally some emerging ranges may be under represented not reflecting the potential to grow sales and market share in the medium to long term. Previously Currys stores used to be very unfriendly and hard to navigate with many using the old-fashioned herringbone store layout as opposed to perpendicular formations. Many of the products were behind counters and in cabinets making them difficult to access let alone try. Product spec on the tickets and POS was written to highlight features not benefits, confusing the customer further with ‘Core Duo’ this and ‘8 Ram’ that. Customers are seeking a much more hands on experience where products can be tried and handled supported with great advice tailored for their needs. Increasingly I believe, Retailers will need to create the benefits of shopping online in a store environment. This means easy access to video content, customer reviews, star ratings and more product information to help inform their decision making. Being able to compare features and benefits across different products at a glance would be useful too. I often compare stores to your home, if we don’t update and refurbish regularly then we won’t feel comfortable inviting guests round. As is the case with Retail, customers will always vote with their feet.

Once largely associated with lower-income households, dollar stores are now becoming retail staples even for more affluent households, inspiring retailers in these categories to invest more heavily in marketing, merchandising and technology innovation that will help them differentiate. #dollargeneral #dollartree #omnichannelretail #retailtech

Retailers know #omnichannel is the way to go! "Now, Wayfair is the latest in a stream of #online #retailers who are choosing to go the old-fashioned route and sell their wares in-person. While thousands of #stores shut their doors during the “#retailapocalypse” just a decade ago, interest in in-person experiences shot up post-pandemic. According to a study from Capital One Shopping, U.S. #brickandmortar #retailsales totaled $7.07 billion in 2023 (up 5.14% from the year before), and projections indicate that sales will hit $8.34 trillion in 2026." #larrytheleasinglawyer #shoppingandtheretailindustry

The #future is here and the future is Omnichannel. Wayfair is venturing into brick-and-mortar retail with its inaugural physical store. This move highlights the growing recognition among eCommerce giants of the significance of physical presence in enhancing the customer experience. Following in the footsteps of brands like Bonobos and Amazon, Wayfair's expansion into the physical realm underscores the synergy between online and offline channels in today's retail environment. Even in the age of eCommerce dominance, the allure of physical stores remains strong, offering opportunities for immersive experiences and personalized interactions with customers. By embracing this omnichannel approach, retailers can deepen their connection with consumers and serve different uses. #retail #innovation #ecommerce #digitalmarketing #shopping #cx

A great piece from Emily Clegg looking at how the presence of a store can positively affect the performance of a brand through the online halo effect. Reach out if you'd like to find out more on this topic, or other ways in which CACI Ltd data can support your brand strategy or asset performance. #property #data #consumerinsight #onlinehalo #haloeffect #CACILtd

Delve into prevalent display missteps and outline the clear objectives that need to be outlined for a successful outcome in this feature. #frankmayermade, #displays, #kiosks