The retail market has historically been the first to react to cultural shifts. Brands try to stay nimble to pivot in response to rapidly changing customer desires while staying true to their core values. With “contactless” becoming the new retail buzzword of 2020 and a massive shift to e-commerce, the companies that have managed to adapt are winning.
According to a new forecast by CallisonRTKL customer experiences will shape the future of retail, and brands who pay the closest attention to this will thrive. 2021 will also usher in a new era of corporate responsibility and digital accessibility.
BRANDS ARE EXPECTED TO DO MORE
Those with internal brand awareness and dedication to their mission have a significantly stronger foundation to leverage. Regardless of whether a brand’s mission is to help the environment or support their community, their dedication must be intrinsic to every employee and customer-facing touchpoint.
According to a Markstein Survey in 2019, 70% of consumers say they want to know how the brands they support and address social and environmental issues.
“Everlane is a brand that has done a great job of integrating digital and physical retail while maintaining a strong message of radical transparency permeating every interaction,” says Michelle Decker, Retail Strategist in New York. “When we work with clients, we build upon their mission-driven enthusiasm and transform branded retail experiences for purpose-driven consumers of every generation.”
Brands that are taking a holistic view of long-lasting impact are the clear leaders in corporate social responsibility. While running a short-term campaign may gain attention for a brand without generating significant change, establishing long-term cause-related goals showcases a more profound commitment from brands to their community. This commitment reassures the 74% of customers who are sceptical of corporate giving marketing ploys that the brand takes corporate social responsibility seriously, strengthening their initiatives’ effectiveness.
For instance, Nordstrom has publicly announced its goals for 2025 centred around Environmental Sustainability, Human Rights, and Corporate Philanthropy. Another brand, Apolis, has embedded its ethos and message into its corporate operations.
“It [Nordstrom] sources their products to empower people and tell the stories of all their factory workers around the world, including giving fair wages, on product tags,” notes David Cassidy, Retail Practice Leader, based in Dallas.
Brands that embed these missions into strategies at the organisational level will have far more impact than a quick-fire campaign in building consumer loyalty and positive retail growth.
FOOD AND BEVERAGE IS THE NEXT NEW ANCHOR OPTION
The 15-minute city idea focuses on a local and more blended offering of retail, entertainment, and hospitality for residents as a driving force for change. There is a tremendous opportunity for more integrated experiences in those struggling anchors with suburban malls and development properties suffering because of the shift to online shopping.
“Many of our department store and developer clients are working with us to envision the best offering for this new model,” notes Cassidy.
“Food halls are a critical part of this. The reduced footprint, short-term leases, and high potential for increased foot traffic to adjacent properties are big payoffs for the developer. At the same time, the variety, communal atmosphere, and flexible open spaces give customers a vibrant, convenient, and safe option for food and beverage experiences.”
Regarding safety and adaptability, 75% of food halls were able to stay open during lockdowns by pivoting and resetting quickly, according to the latest Cushman & Wakefield Food Hall Report.
Additionally, hybrid experiences in retail have been growing in popularity with positive results since the early 2000s. Food halls certainly have been – and will continue to be – an essential part of this growth. As customers shift to online shopping, brands have sought to right-size their use of spaces while experimenting with partnerships between retail and food and beverage.
Cassidy sees the ability of spaces to flex into alternate uses can overcome many challenges and allow for temporary solutions. “With the dining spaces of food halls naturally having larger gathering spaces, a simple and effective strategy is to transform use temporarily into pop-up markets, performance, and event spaces, in addition to dining. The intrinsic flexibility adds an opportunity to adjust for new formats of customer events quickly,” he says.
DELIVERY BLENDED PHYSICAL AND DIGITAL EXPERIENCE
We used to think of retail as being only stores. We now think of retail as an ecosystem of brand touchpoints – some physical, some digital, some face to face, some automated. In fact, according to PwC’s Global Consumer Insights Survey 2020, 45% of consumers say they’re using their mobile phone more as a shopping channel since the COVID-19 outbreak.
As a result, it is no longer about what a store looks like for designers – it is about the customer and what is relevant to them. While some physical retail stores have disappeared during this unprecedented time, we see many new opportunities to deliver a great retail customer experience.
A key innovator in using physical retail as part of their toolbox is Nike. The brand excels at delivering alternate physical retail formats to support its traditional retail. The House of Innovation experiential flagships, Nike Live – which uses data to provide only the most relevant merchandise for local customers – and Nike Rise, which encourages utilising the loyalty app in-store to unlock citywide events access, are exemplary models for alternative formats. The collection of Nike retail experiences showcases the brand’s understanding that the store can represent more than a place to buy products. Moving forward, we can creatively embrace technology as an enhancement tool to increase the physical shopping experience without numbing it and reverting solely to online purchasing.
Personalisation will be especially valuable to consumers and brands as we give up more privacy in exchange for more meaningful and effortless interactions with brands and the products they provide. Another trend we expect to continue to grow is the buy online pick up in-store or BOPIS [Buy Online, Pick Up in Store]. Creating a seamless and personalised experience for customers within the short span of a BOPIS experience is an incredible retail design challenge.
“Let’s be clear, some product purchases are more efficient and enjoyable online, but many others require a hands-on customer experience and skilled in-person customer service. The future of retail depends on understanding which products require the physical space to experience them and how those spaces enrich the brand touchpoint.” says Cassidy.
ADJUST TO THE DRAMATIC SHIFT OF CONSUMER SHOPPING BEHAVIORS
So how can we design to meet consumers where they are today? “We’ve seen the fundamental shift towards online customer activity. Customer expectation is high, and technology enables us to meet their demands,” says Lily Olsson, Customer Experience Designer, in the New York office. “The key to designing for the evolving customer is to understand their behaviours.”
CallisonRTKL developed a Test Lab Branch for New York-based Ponce Bank. The lab allowed Ponce Bank to listen to customers’ needs and discover how operations needed to adapt. It also included a mock-up space to deploy new digital tech and test where new service models could be co-created by staff and a sample group of customers. Service design iteration occurred daily. After a month of testing, deployment of a new validated, digitally-enabled customer flow launched in the branches, along with a fresh new interior design. “The more we understand the customer, the more we can anticipate those future behaviours and validate them through testing,” says Olsson.
Consumer behaviours will continue to be influenced by technology in 2021 – and beyond. Personalisation and the ability to connect with brands and each other 24/7 has made our world smaller and more intimate. Consumer impatience and high expectations on seamless experiences drive rapid innovation in retail beyond the look and feel. According to consumers surveyed by JLL, more than two-thirds indicated that a retailer must remember their preferences.
“We consider the customer experience before thinking about the design of a space, and we see most brands are making this shift too.” says Paul Conder, Customer Experience Practice Leader.
“Additionally, the customer experience space has become a lot more sophisticated over the past few years. Retailers used to defer to a ‘surprise, delight, and share’ approach to experience design. Now they focus on deep personalisation, effortlessness, seamless cross-channel services, and digital-use to deepen face-to-face service. This focus goes a long way to improving customer expenditure and long term loyalty, and the store is a central touchpoint in that experience.”
In 2021, store design remains just as important as ever, but it joins digital, service design, and channel strategy to stay relevant to today’s customers, regardless of their changing behaviours.