The Changing Role of Physical Stores in the Modern Retail World

If this author had a penny for every time he'd written about the apparent death of the high street over the last few years, he'd have... well, maybe 50 cents. However, while many have been predicting their inevitable demise, the truth is that physical stores are going through an evolution, not a dissolution.

Brands are at a point now where they need to rethink how they manage their physical presence. Whether they operate exclusively on the high street or have a foot in both the ecommerce and brick and mortar worlds, they need to discover new ways of getting customers through their doors and providing them with experiences and services they cannot get online. Omnichannel offerings are part of the puzzle for sure, but that isn't where the story ends.

Let's look at the way in which the role of the physical store has evolved in recent years and its new place in the modern retail environment.

Retail Evolution

We are all aware of the proliferation of showrooming — the practice of viewing or trying on products in-store only to purchase them online — and its popularity with customers. While the practice does result in lost revenue for physical retailers, it does suggest that the brick and mortar store does still have a role to play in even the most digitally native shopper's buying journey.

One of the best ways to leverage the power of retail is by providing experiences that simply aren't possible with ecommerce. There is a STORY concept store in Manhattan that completely reinvents itself every couple of months and partners with brands to provide a new experience based around themes each time.

The store takes inspiration from art galleries, which will feature certain collections for a limited period before moving on to something else. This enables the store to create buzz around the next "story" it wants to tell and build excitement for the new products it will feature.

For example, one such story was based on making things and creativity. The store had 3D printers and injection molding machines installed around the shop floor and ran workshops and other events to instruct people on making their own items. Shoppers loved being exposed to more than a range of products to purchase and the store saw sales and engagement increase significantly.

Leveraging the power of physical stores as a place where people can meet, socialize, and learn is a great way to change their role in our society. The increased footfall created by such events will result in a sympathetic increase in sales opportunities and continued business.

"In a world where brick-and-mortar retailers fear being phased out by tech giants and hip online start-ups, the key to survival is leveraging the advantage of the customer experience," writes Stand Agency's Millie Daly. "Many customers will continue to go to a physical store as a destination for socializing, advice, and experiencing products. With technology now infringing on so many aspects of our lives, the idea of more stores offering discovery and human connection is something I very much look forward to."


UK supermarket brand Tesco had noticed that 70% of shoppers now use its 153 Tesco Metro stores like convenience stores. The Metro sub-brand was originally intended to function in much the same way as its larger supermarkets, but they found that people were tending to complete their big shop online and have it delivered to their home, while the metro stores were being used for top-up shops and by demographics such as single people who didn't need to buy a week's worth of food in a single trip.

This has led to Tesco restructuring its Metro stores to meet the demands of these new shopping habits. A leaner management structure, new shelf-filling procedures that will enable them to carry reduced inventories, flexible employee roles, and, perhaps most importantly for this discussion, a reassessment of product selections.

The change may see the supermarket carry more ready meals and quick and easy ingredients for evening meals. This is a prime example of a store changing the way it operates to meet an evolution of customer needs, and one from which other brands can learn lessons.

"In a challenging, evolving retail environment, with increasing cost pressures, we have to continue to review the way we run our stores to ensure we reflect the way our customers are shopping and do so in the most efficient way," said Tesco CEO, Jason Tarry. "We do not take any decision which impacts colleagues lightly but have to make sure we remain relevant for customers and operate a sustainable business now and in the future."

Final Thoughts

The world of physical retail is evolving and attempts to write it off as a spent force only serve to establish a self-fulfilling prophecy. Instead, brands need to change the way their stores serve the customer and establish themselves as relevant and powerful forces well into the future.

The changing role of physical stores is set to be a hot topic at eTail Europe 2020, taking place in June at the Queen Elizabeth II Conference Centre, London.

Download the agenda today for more information.

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