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The changing face of physical retail, part 2: where physical meets digital
Date published: Date modified: 2022-10-18

It is safe to say that Britain has an online shopping habit—ONS data shows that online spend made up 28.1% of all retail in the first half of 2020, a 7.8% increase on the same period in 2019.

However, in the words of Wolff Ollins chief design officer Chris Moody, "it's a popular myth that the digital players are going to destroy the high street." The retail experience has never been merely about making purchases. Recent footfall data suggests that, gloomy weather and swells in COVID-19 cases notwithstanding, there is a marked desire to return to shopping locations to browse, eat and socialise- experiences that cannot be replicated online.

To say that physical and online retail are at odds with one another would be inaccurate. Brands have embraced the multichannel approach to bring together the benefits of online and in-person retail. In the second of a two-part series, we explore how physical stores are integrating the online experience to strengthen their position in the retail sector of tomorrow. To read part one, click here.

From online to offline

Online ordering undeniably offers a high level of convenience, but retailers with an established physical presence can make the most of this if they integrate physical and digital operations. Often centrally located, physical stores can function as distribution hubs, supporting online orders with click-and-collect services and delivery fulfilment. The fact that some multiples own sites across the country would place them on a relatively even footing with online-only retailers, who would have to open more warehouses to achieve the same potential of locality and speed of delivery.

Exclusively online companies have recognised the benefits of a physical presence, too. Online giants such as Amazon and Fabletics have made their first ventures into physical retail in the UK. TikTok, Instagram and Snapchat have all ventured into the physical space with experiential pop-ups, as the link between social media and shopping grows stronger (a survey conducted in the US by Forbes last summer found that two-thirds of respondents use social media as part of their shopping strategy). These companies have recognised the unrivalled ability of physical retail space to provide a face for a brand and directly engage with consumers, building trust and awareness.

Whether they made their start on- or offline, some of the world's biggest brands are integrating physical locations into a multichannel approach, where sites serve as a key touchpoint and e-commerce capabilities support convenience and expedience. Online trade is likely to continue forming a large part of overall retail spend, especially in certain categories such as fashion, where spending has overwhelmingly moved to online channels. Physical destinations can form part of a brand’s sales and marketing strategy as an effective catalyst for the buyer journey.

destinations and experiences

'Destination' is a buzzword in retail at the moment. Some retailers have carried out refurbishments to existing stores—for example, Sports Direct’s £10m revamp of its Oxford Street store, with a gaming area, virtual selfie mirrors and a running gait analysis machine among its new features. Others have established permanent venues offering unique experiences— footwear and clothing brand Vans hosts skate ramps and an art gallery at its House of Vans site.

Experiential retail suits flexibility at every level and short-term agreements are increasingly welcomed both by owners and potential occupiers. Landlords can offer long-term space for leisure venues that increase overall dwell time at a location, for example, the Treetop adventure golf course at the Birmingham Bullring shopping centre, or short-term leases for exciting pop-ups. What these experiences tend to have in common is a strong link to the brand’s online presence: many of these experiences tie into social media, some more directly than others.

Unibail-Rodamco-Westfield’s 2020 ‘How We Shop’ report found that 81% of consumers said they would be willing to pay more for experiences in retail contexts. Operators can harness the massive influence of social media and ease of online ordering to grow business without the potential costs of expanding physically and create experiences that bring people together offline and build affinity for their brand. Innovative use and optimisation of space can help to ensure continued success for retailers in a world that values convenience yet seeks connection.

To find out how the Local Data Company can help your business shape a resilient store portfolio, contact us here.

Sarah Abu-Amero, LDC Marketing Executive

Sarah Abu-Amero, LDC Marketing Executive The Local Data Company 901 901

Sarah joined LDC in 2021, having previously worked as a copywriter and social media manager. She supports the team with digital and written communication, planning and creating content for the company’s website and social accounts.