After two years of shopping online some customers have made a full transition from enjoying the real life retail experience to dreading long queues, overwhelming smells and bright lights. Others, however, seem to miss the immersive and communal feel that shopping on a bustling high street provides. It’s no secret that the demise of the UK high street (and high streets around the world) has been sped up rapidly by the pandemic and forced closures that came with it. The intense competition that was already looming over flagship stores posed from online retailers and e-commerce is now a dreadful reality.
Not only this, but the generation that is taking online by a storm – Gen Z seems to enjoy e-commerce more than ever, with teens and young adults almost relishing in the disconnect it provides. It seems ironic that spaces like the metaverse are striving to emulate the connection that a real life high street provides, by still striving to protect the personal space and these newly built hybrid habits, partially rooted in the pandemic. So, the pending question is – what does the future look like for flagship stores? Will e-commerce drown out the hype around them with the help of the ever-changing ways that we work, commute and shop? And what role will technology play in all of this?
Jaclyn Currie, executive director, retail at Clemenger BBDO Melbourne believes that if anything, the Covid-19 pandemic made the hunger for offline shopping experiences even bigger. “Those predicting the demise of the flagship should consider that the century old vision of building places for experiences, to engage and entertain, to amaze and amuse, is even more relevant in our digitally dominant, Covid-19 world,” she explains. To her, even the metaverse poses a minimal challenge to offline shopping, as while it will bring more opportunities for the creative expansion of brands, it will never replace the richness of human interactions in a community and in a shared space.
When it comes to the attitudes of Gen Z to e-commerce Jaclyn is categorical: “Gen Z, the loneliest generation with a fundamental yearning for offline human experiences, is at the heart of this flagship renaissance. The opportunity to switch off the constant digital bombardment of their lives is driving demand for a seamless omni-channel experience and a compelling flagship is core to attracting Gen Z.”
Take holiday shopping, for example – Christmas is probably one of the largest events on the high street and who doesn’t love fairy lights? Jaclyn is certain: “No Christmas microsite will ever replace the feeling of a small hand in yours, sweaty with excitement as they gaze with awe at the wonderland that is the Myer Christmas windows. There’s no unboxing experience that can match the joy of people coming together, of talking to a human about fit and features, the emotional pull of a fragrance that sparks memory, no relationship with your drop box can mirror that deep human connection.” If we only look at Glossier accelerating growth and the crowds that swamped their doors at the opening of their Soho flagship, or Showfields with people ‘flocking to it’ and of course, how can we forget – Amazon opening a book store in New York City.
Rob Sellers, head of retail at VCCP echoes Jaclyn’s points by underlining the fact that the transition to e-commerce during the pandemic (and before) has never been smooth sailing. To him, the main reason for the sharp spikes in online shopping’s share of sales in 2020 was entirely due to the fact that physical shops were mandated to shut, but “as soon as people were allowed to go back to the shops, they did so in their droves.”
Rob points to the fact that when we look at all retailers, it is undoubted that for some types of purchases people absolutely started buying far more online and quickly realised the benefits – prices, pace, utility. “One example is bulky or big grocery items, which people got used to getting delivered and have stuck with it. However, fashion is the opposite – shops opened and people flooded back in, itching to replace their tired home clobber and get some glad-rags for a new dawn of nights out.”
And indeed, fashion is probably one of the areas of online shopping where the overall opinion of the public might be quite polarised. Some are comfortable with choosing shoes online, but others absolutely dread the procedure of returning something that doesn’t fit. Perhaps the online shopping experience, when it comes to fashion, has some way left to go in order to become fully immersive and onboard the non-believers. Be it through fixing sizing, price reductions, more seamless purchase to payment routes, better website interface.
“Functional questions get in the way of online shopping for clothes. Let alone the deeper psychological drivers of discovery, imagination and inspiration that stimulate shoppers. Data sources such as Pret Index
show us that London’s West End is enjoying footfall at or above pre-Covid levels,” explains Rob. He does pay mind to what he calls the ‘sleepy and anarchic department stores’ of the high street like House of Fraser, or John Lewis, that are indeed shutting their doors.
However, “the idea of aimlessly wandering around generic retail spaces, looking broadly at a range of categories without brilliant direction does feel at odds with the infinite choice of the internet.” To Rob, brands with a clear vision of how physical retail complements their retail systems are the ones doubling down on it. Some examples are Lego, Nike and Apple, as well as IKEA, who have recently announced plans to invest £1 billion on key physical retail sites across London in the coming years.
“Flagships are almost certainly here to stay. But it’s worth noting that just being ‘big and central’ is clearly not a guarantee for success. We need to balance theatre, wonder, utility, convenience and relevance in a way that makes it blindingly obvious that a day out in town shopping is still, absolutely, one of the ways that Brits love to spend our time,” he concludes.
This understanding is also exactly what Jessica Chapplow, head of e-commerce at Havas Market sees as key. “The store isn’t becoming obsolete,” she explains “it’s just evolving. This evolution is providing retailers with the opportunity to re-engineer the flagship model to prioritise interaction over transaction.” And although some brands and retailers from Zara to Holland & Barrett are reducing their physical footprint, with the closing of one flagship store, another one opens doors. Where lies the key difference?
“Slick digital technology – including the use of virtual mirrors, digital screens, RFID chips and iPads – has quickly moved from USP to a more common feature of flagship environments across the spectrum, from luxury to fast-fashion. Mango and Superdry both recently launched flagship stores that fuse experimental retail with eco-friendly design,” says Jessica.
Technology is the thing that seems to be reshaping the storefront now and looking ahead into the future. “The storefront will become more lean and agile, emphasising fulfilling online orders and efficient local pickup and delivery services. Interactive shop windows are also playing more of a role to help retailers turn advertising from a one-way monologue to a two-way dialogue between the brand and consumers by gamifying market messages.”
This hybridisation between physical and virtual worlds is exactly what brands are looking at in order to not follow into the footsteps of the tired and regurgitated names of the high street. This is what Delphine de Canecaude, president of BETC Etoile Rogue also believes: “Retailtainment allows brands to create a sense of wonder and excitement, customers can only access in the real world. For instance, the digital native brand Farfetch is doing this hybridisation in its London flagship store.” We can see clothing being presented on connected displays, people using tactile mirrors and accessing their purchase history or wishlist, through this allowing sales assistants to guide them through the whole offer.
According to Delphine, this retailtainment experience will also allow for brands to take the floor and express their craftsmanship and heritage – for instance, Hermès, using their recently launched Carré Club, in Hollywood for showcasing its most talented craftsmen displaying their skills. Another key evolution that we will see in the coming years, Delphine says, is that “flagship stores are becoming the mirror of their commitments,” when it comes to sustainability, energy efficiency, architectural integration. “The physical space of the store allows the brand to communicate on its major shifts, in a very immersive way,” she says “As a result, flagship stores offer a complementary and augmented retail experience, by allowing brands to immerse people in their brand universe. Covid-19 has fostered a need to feel, to live, to embrace the world and to connect with others, instead of being secluded online.”
Although evolving and definitely changing for the better, the future of flagship stores does not seem to look that grim. With constant innovation, borrowing strategies from the online world, clear-cut business models and a hybrid space where tech is what takes customers to the next level, flagships might just be on the rise. It is only a matter of time for us to see what kind of implications the metaverse has on all of this, but one thing is sure according to Jaclyn: “Building for the future will require that retailers return to being more human, where service trumps self-service and smile seals the deal.”
Maybe a bit old-school, but definitely effective, especially after a prolonged period of disconnect. What Jessica Chapplow thinks is that success is in the balance: “Successful retail models will balance elements of innovation, education, and entertainment. A seamless experience is achieved through technology; education adds value for both the consumer and brands; while memorable entertainment increases traffic and brand loyalty.”