Hybrid retail spaces
Most stores now look like small tidy warehouses with goods. People are supposed to walk along endless racks, grab what they need, take it to the cashier, pay for it and pick it up home. As the e-commerce evolves, people are less likely to go to the store just to get a product they want. If they are coming out to the store they want to gain confidence in making their purchase decision. They want their product experience to start not from purchase but from the choosing process. To get a positive experience, the pleasure of going out and making a purchase.
Stores that still work like warehouses are rapidly losing foot traffic. They might put brighter signs, make a bigger SALE label on the storefront but it won’t help. The only way to increase the flow of visitors to the store is to create a reason. A reason why customers need to come to their store. The bigger the reason, the greater the likelihood that the customer will come back to the store.
Stores need to understand what people want to experience when coming out and then tie these activities to their retail business. In this way, they bring people to the context where products are related to customers’ activities.
Here is how stores might go hybrid. Apparel stores can open a coffee shop or a barber shop inside their retail space. Customers at kids’ stores may benefit from a playground or even a child development center. Zoo shops could provide pet services such as grooming or a nursery. Electronics stores can create experience centers where visitors may see a new food processor in action, try out a vacuum cleaner. Possibilities of bringing new activities and services to existing boring stores are endless.
Examples of hybrid retail spaces
Frank and Oak Barber Shop
Frank and Oak is a Canadian menswear retailer and subscription service startup offering members a limited feed of clothing and accessories. In its stores in Montreal and Toronto customers may get a new haircut as well as a style advice and personalized product suggestions.
Urban Outfitters Coffee Shop
Tapping into the trend for in-store café offerings, pioneering brand Black Sheep Coffee has teamed up with fashion brand Urban Outfitters to launch a coffee bar in its Marble Arch store in London.
Whole Foods Bar
The Watering Hole is a bar inside Whole Foods store. Customers are served with 15 wines and 16 beers on tap. If you are undecided from the bar menu, you can choose from any departments in the store and enjoy at the bar.
Coach Craftsmanship Bar
A craftsman corner in Coach store offers customers a chance to personalize their purchases. These stations, manned by leather artisans, can monogram and customize the color trim on hangtags and products in store.
Saturdays Surf Coffee Bar
Saturdays Surf NYC SoHo flagship store hosts an up-front espresso bar, which serves their own blend of coffee brewed by some of the best baristas in the city. Out back, the fully planted yard acts as a wood-decked sanctuary from the streets.
Resume
What is common to all these stores — a focus on providing a unique experience that customers want to get when coming out. Hybrid retail spaces bridge the gap between a service element, food and bev, and retail. Fortunately, retailers don’t need to create all these services themselves. Clearly, we’ll see a lot of stores partnering with service companies that both benefit from such cooperation.
One more reason for stores to move towards a hybrid format. According to an Economist Intelligence Unit survey in 2013, the percentage of manufacturers selling directly to consumers has grown by 71% over the year to more than 40% of all manufacturers. As this share continues to grow, the margin of shops is reducing. Their value in the supply chain is decreasing as well. Therefore, they should think about the additional value they can create for the customers. If brands won’t need retail stores as distribution centers, they still need retailers to be their brand ambassadors. And retailers must be very good at it.
Imagine stores do not earn on sales but are paid by brands for the brand experience and customer service provided to their clients. That would be the culmination of hybrid retail spaces.
Please, share your examples on hybrid retail spaces. And don’t forget to subscribe not to miss our next article “Store Associates in Digital Era”.
