All roads lead back to Apple. It’s been 16 years since the firm thrilled and excited in equal measure with its first shop in Virginia – a pared-back space which functioned as a shrine to the brand. It innovated on soft stuff like getting its phones and computers into people’s hands and running sit-in lectures about making films – all so that people fell in love with the idea of buying its products.
It also did the hard stuff really well: a person could buy a £3,000 computer quickly and without any fuss. Despite the store’s success, Apple opened relatively few of them. This cemented its showroom strategy.
Since then, new and older retailers alike have deconstructed and analysed Apple’s approach and attempted to apply its principles. ‘[Apple Stores] are highly functional, beautifully designed and very flexible,’ says Annabel Kilner, commercial director at online furniture retailer Made. Products are there to be tried out, not just put into a basket; staff provide expert knowledge and advice, rather than managing inventory; sales can happen anywhere, not just at a till.
An Apple store is also very ‘Apple’; it’s minimalist, it’s carefully-designed, its staff know their stuff. ‘That makes sense as a retailer today,’ Kilner adds.
Made has adopted Apple’s idolatry of product and taken a similar ‘show-not-sell’ approach. In 2012, when Made opened its first showroom – next to its office on the ninth floor of a Notting Hill tower block – it was experimenting with how to solve a problem common to e-commerce startups: consumers want to see and touch products before they buy, especially from unknown brands. ‘At the time, it was to get a sense of the quality of the product,’ says Kilner. ‘And to provide an engaging, on-brand space.’ Showrooms are nothing new.
They’ve long been used to sell pricey or bulky products by luxury brands, along with car and furniture retailers. But seeing such a young company launch one in an expensive bit of the city was a novelty; as was the experience inside. Customers could see staff at work; Made’s buyers could see what customers were saying and doing.
Its most recent showroom, in Paris, puts ‘experience’ stage-front. ‘It’s architecturally stunning,’ boasts Kilner. It’s designed to look like an apartment, plus has spots for other brands inside – currently a gluten-free cafe and a florist. Rather than take on permanent space, Made’s rival furniture startup Swoon Editions has taken a roving, pop-up approach to shops.
It’s an intuitive strategy in an era where physical retail is as much about spreading the word as about selling. Swoon’s 12 pop-ups to-date have been designed to look and feel like a home; an immersive experience familiar to anyone who has been to an Ikea store.
The difference with Swoon’s ‘apartments’ is that customers can book appointments with stylists for interiors advice, similar to US fashion retailer Bonobos’ ‘Guideshops’, where staff offer sartorial suggestions. Like Swoon, Bonobos built a physical retail model after being born in e-commerce.
For Made, and Kilner, it’s a question of feeling out an unfamiliar model: if not by sales, how is a showroom’s performance measured? How many of these expensive-to-operate stores will it want to open? ‘We’re trying to define what our strategy is,’ she says.
Made’s Paris store is a visitor destination as much as it is a retail outlet and ‘brand portal’, comparable to the Selfridges food hall, or Spitalfields market in London. Creating similarly unusual and exciting in-store environments has become the trademark of aspirational brands like Aesop, whose shops are each designed to have a unique identity. The company spends nothing on traditional advertising, deploying its budget instead on coveted architects to create Instagrammable stores.
Despite having several hundred shops, managers in each of the chain’s outlets are pushed to create a connection with locals through events and gift its products to cool nearby restaurants.Meanwhile, high-concept fashion stores like Dover Street Market in London and 10 Corso Como in Milan have drawn crowds through continually-changing installations; each label crafts a highly-artistic stage for its clothing line.
Parisian fashion and lifestyle stores Merci and Colette have long been on the tourist trail for millions of visitors to the French capital, (although Colette has announced it will close this December). People are drawn to the shops’ artful interiors and unique design collaborations, restaurants and cafes, as much as the products themselves. ‘Retail spaces as we know them – the kind of spaces where you have a stockpile of inventory and expect sales to come – are set for a dramatic pare-down, and maybe extinction,’ says Julia Fowler, co-founder of fashion analytics company Edited.
For consumers, it’s a double-edged sword. Some retailers will start offering an experience that’s more exciting than ever, but many high streets and shopping centres will see mass closures.
There’s likely to be a stark polarisation. Huge nationwide chains of cut-and-paste shops are expected to close, leaving poorer and secondary shopping areas hollowed out. Meanwhile, the top shopping areas (areas densely populated with affluent people) are likely to see experience-rich retail, alongside cheaper and faster online shopping.
Scott Galloway, the founder of business intelligence firm L2 and a regular commentator on retail and technology, recently said: ‘I’m not sure this stuff is good for society. It’s going to be great for wealthy assholes and it’s going to be great to live
in urban centres where two-thirds of the economic growth is anyway.’ What’s certain is this shiny version of the shop won’t be present in every town and city.
The British cycling brand Rapha is leading the pack in creating shops that feel like social spaces. While the company started life online, it opened a shop in 2012, conceived as a ‘clubhouse’. Racks of Rapha gear sit alongside a cafe and big screens that show cycling events, while the site also functions as a meeting point for cycling groups. Rapha now has 18 similar shops, and five roving outlets, around the world.
This shop format does undoubtedly create a rich, immersive and multi-faceted story for a company. Imogen Wethered, CEO of retail technology company Qudini, says: ‘Everyone is putting some sort of service, or event, or customer engagement initiative into their stores. Footfall is declining; retailers are finding ways of bringing it back up.’
Cornering off a cafe has now become common practice – from the fashionable stores located on Shoreditch’s Redchurch Street to branches of Tesco. Meanwhile, online retailer Missguided is experimenting with social media-focused fitting rooms; in its second physical store it moved them to the front of the shop and added in comfy seating and good lighting, encouraging its teenage customer-base to share how outfits look with friends.
There’s been no shortage of experimentation with technology in recent years. In 2012, Japanese fashion retailer Uniqlo installed so-called ‘magic mirrors’ in its new San Francisco store. The mirrors superimposed a virtual image of shoppers over their reflections, and let them switch between different coloured jackets. The consensus was that it failed to add much to the customer’s experience.
Other experiments such as changing room mirrors with social media functionality and QR codes in shop windows have also been trumpeted by brands, only to be swiftly consigned to the tech graveyard.That said, progressive retailers are adopting tech in more practical ways. In particular, they’re stitching up online shopping with what happens in a shop.
So far, the two areas have not just been disconnected but existed as competing divisions within most major high-street retailers’ management structures. Harvey Nichols and Made, for example, are using an app which lets online customers video call assistants on the shop floor to ask the kind of questions the internet can’t answer: How soft is the fabric? Is the sofa squidgy or firm? Hero, the London-based tech startup behind the app, says one client, a US retailer, saw conversion rates jump from 1% to 10% after adopting the service.
In Made stores, customers are encouraged to wander around with tablets, using them to access product information and create wish lists. ‘It’s useful from our point of view to know the data behind [the in-store experience] and know which products are most looked at. We can send personalised emails off the back of that,’ says Kilner. It also helps Made join the dots between a person’s online and offline profile.Many companies now realise that getting hold of customer data means they can offer a more tailored service and even personalised products. ‘There’s no denying that if we can use tech and data to make our shops cleverer – knowing who’s coming in, what they want to see – they’re going to win,’ says Lucy Ward, managing director of e-commerce platform Trouva. She envisages that one day the startup will be able to offer its network of boutique shop owners a tech-boosted version of old-fashioned familiarity with customers. Based on online browsing history, Trouva could, she imagines, tell a shop owner as a customer walks in, ‘“This is Leia, she’s been looking into vases for a wedding that she might
Retailers insist these will be ‘opt-in’ systems – but may have a hard time convincing customers to do so. ‘Retailers have got to find a way to collect data that’s cool and helpful to the customer rather than creepy,’ says Qudini’s Wethered.
‘You can only go so far with tech,’ she adds. ‘People are still essential to retail.’
Technology should, retailers say, primarily be used as a tool to aid the store assistant – a role that’s arguably set for a bigger reinvention than the actual shop.
Shop staff will no longer be required to carry out transactions or manage the stockroom. In this new era, assistants will be brand custodians. They’ll amp up what shopping online can’t do – create personal connections, and manage the new kind of entertainment, education and community formula of the modern shop. In this softer definition of good retailing, a shop assistant will be as motivated to obtain a customer’s email address as they are to land a sale.
When US sports-clothing startup Outdoor Voices opened four stores this year and several pop-ups, it picked staff specifically for their interest in sports, and ability to organise events in the local area.
‘The experiential aspect of these pop-ups is really what we’re focused on,’ said founder Tyler Haney.
If this form of experience retail does indeed become as widespread as many predict, it’s also expected that a certain type of customer assistant will become highly coveted, and pay will rocket as retailers clamour for staff with the emotional intelligence and charisma to strike up connections and build a local community.
‘Online is going to be quick, easy and convenient, but I don’t know if it will ever 100% beat going into a shop and meeting someone,’ says Ward.
It can be disconcerting to consider the changes ahead; a high street where our personal data comes shopping with us. Yet things could be far more extreme: in the 1960s Reader’s Digest looked ahead to 1999 and predicted Londoners would be jetting about the shops with rocket packs on their belts, the entire city centre contained under a glass dome. By comparison, a shop assistant who knows what size we want seems like a comforting proposition.
Banding together boutiques
Trouva currently manages online sales for around 300 independent homeware, lifestyle and kids’ boutiques, although it has ambitions to connect, organise and digitise all of their sales channels. Its aim is to offer its small high-street businesses the trend insights, logistical savings and efficiencies of huge chains by, for example, leveraging the size
of its network to get preferential rates with delivery firms. Recently, it began providing its top boutiques with ‘information on a monthly basis on what’s selling and what we think should be restocked,’ says managing director Lucy Ward.
2015, San Francisco
B8ta’s founders previously worked at Google Nest, and it shows. This is a software-powered retailer, stacked with Silicon Valley funding, which lets electronic brands rent space for their products in B8ta-managed physical shops. It is, co-founder Phillip Raub claims,
an easier and cheaper alternative to ‘the long, arduous process’ of getting a product on shelf in a major retailer, or organising a pop-up. The kicker is what it does with customer information. Clients can analyse what’s going on in store in real-time, and use this data
to adjust product pricing, adapt marketing materials regionally, discover where customers need more information and even tweak product design.
Using a range of data sources, from wifi beacons to footfall trackers, Minodes offers retailers customer behaviour insights. Its clients include several major European shopping centre operators interested in working out the optimal mix of food, fashion and entertainment outlets to have on any strip or street. By tracking customer journeys through multiple shops, Minodes can, for example, assess whether homeware stores get more customers on the top or bottom floor, and the success of a fashion brand’s window displays. Some operators are even turning a profit by reselling Minodes’ insights to their retail tenants, says founder Alexander Köth.
Minodes is also working with Market Tech, the landlord overseeing Camden’s redevelopment, across a mix of retail, restaurant, residential and office spaces.
One of the biggest players in augmented reality could well have a meaningful impact on retail in the future. Magic Leap’s technology allows a shopper to directly – albeit virtually – connect with a stylist or designer and find perfectly-fitting clothes. The idea is this kind of technology makes shopping more customised and also goes several levels further in feeding the appetite to turn shopping into a special experience.
Women’s fashion brand
2009, Los Angeles
The latest Reformation shop in San Francisco is a poster child of ‘tech-enabled’ retail. Touch screens let customers see all available styles and sizes in-store, and order items they’d like to try on to the changing rooms. Once there, more screens let them request different sizes and colours.
How customers behave while shopping is closely watched and analysed, from the time they spend trying things on to what they decide to buy. Receipts are sent via email, so Reformation can then link up customers’ online and offline profiles, and give tailored product suggestions.
Persuading landlords to give up their empty shops for short-term leases wasn’t easy in Appear Here’s early days, but last year it facilitated 4,000 pop-ups. They were mostly in London, although it’s recently also started posting space in Paris and New York. Small independent brands have naturally gravitated to the platform, lured by its flexibility, speed of booking and access to high-footfall locations. But plenty of bigger companies like Coca Cola and Ikea are also using pop-ups to try out new ideas and formats.
Appear Here isn’t alone in the space. In the US it competes with Storefront, which has a similar platform and offer.
Luxury retail solution
Not content with linking up a global empire of 700 luxury fashion houses in 40 countries through its £4bn e-commerce platform, Farfetch is now branching out into retail technology with its ‘store of the future’ suite of tools. The system is designed to pull together what brands know about their customers’ online and in-person shopping habits and preferences to create the ultimate high-end retail experience. The system launched in September in two stores bought by Farfetch for the experiment; Browns in London and Thom Browne in New York. It includes clothes racks which track when items are moved and where they go in shops, changing room mirrors which let customers request different size or colour items, and phone apps which let assistants sell products from anywhere in the shop. It also, crucially, identifies customers from their phones, so staff can tailor their service accordingly. A commercial roll-out is planned for 2018.
A graduate of both John Lewis and Wayra’s incubator schemes, retail tech startup Qudini manages queues, collections and appointments in restaurants, O2 stores and, previously, Argos outlets. It’s one of a host of tech firms promising to improve retailers’ customer relations while gathering data about what goes on in shops.