The “Unstore”: The Future of Brick and Mortar Retail?

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The upcoming holiday weekend brings with it Black Friday and Cyber Monday, dates that have become shorthand for the different ways people shop. While e-commerce and physical retailers’ sales are still not comparable, many retailers are doing more to differentiate the in-store experience from the online one. How this coming weekend plays out may provide some insight into how the customer experience affects buying patterns in the future.

Imagine walking into an athletic–apparel store and seeing no running shoes, no yoga pants, and no sporting equipment. Instead, there is a CrossFit class lifting weights or a group of marathon runners meeting for a training run. These “unstores” or “concept stores” are quickly changing the face of retail as brick and mortar stores strive to capture incremental e-commerce sales by creating new and vibrant customer experiences.

Of course, consumers can now shop online for almost anything and from anywhere, and online stores commonly offer a broader assortment of products, sizes, and customization options. But while enhancing some elements of the shopping experience, the online shopper loses the social experience (and other elements) of the physical store.

As a result, brick and mortar retailers are increasingly focusing on evolving the in-store customer experience. While stores will not stop serving as points-of-sale anytime soon, retailers looking to create unique and luxury experiences for customers will capture an enhanced share of sales. Ideally, shoppers who stop in-store will leave with much more than a purchase; they’ll leave with the feeling that they are a members of an exclusive club—an experience that is difficult to replicate online.

How are retailers doing this? Samsung opened a flagship store in New York that sells no product; it exists exclusively for shoppers to see and try the company’s offerings, like a virtual reality headset. Makeup retailers like Ulta offer makeup and beauty classes. Office-supply chain Staples even teamed up with office-sharing startup Workbar to create temporary office spaces in its stores.

Many athletic-apparel retailers have also seized on concept stores, with the theory that they can best highlight their apparel and products if customers have a chance to use them in real-life settings. Nike opened an invite-only showroom, 45 Grand, which feels more like a gym than a store, and features fitness classes taught by in-demand instructors. Athletic-apparel retailer Lululemon regularly offers yoga classes in its stores, and Reebok’s FitHub stores include CrossFit gyms. Outdoor sporting goods retailer REI even offers experiences outside its physical stores, taking customers kayaking and skiing while simultaneously letting them test equipment.

These concept stores serve as life-size advertisements, showcasing a retailer’s brand and envisioned lifestyle. While some stores are incorporating experiential retail but still selling product, others opt to focus exclusively on the experience, knowing customers can shop online later. Theoretically, shoppers will leave concept stores with good associations to the brand and excitement about the products they tested out, all of which translate into sales.

While these “unstores” can help create incremental sales at brick-and-mortar storefronts, they also change the traditional roles of retailer and customer, and create new legal considerations. Most obviously, retailers offering fitness classes will have to consider liability (and insurance) issues traditionally reserved for fitness studios: properly maintained equipment and appropriately trained and credentialed fitness instructors rather than ordinary store employees. And for all retailers, leases will have to be reviewed to ensure conformance with operating covenants and cotenancy obligations. But whether these concept stores reengage customers but do not cannibalize sales will ultimately be determined by the quality of the shopping experience and the development of the customer relationship. With a better customer experience and a tighter customer relationship, the unstore experiment may become synonymous with shopping.

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