Is physical retail entering a new age?

Discussion
Bustling Warby Parker location, Jan. 2020 – Photo: RetailWire
Nov 16, 2021

There has been no shortage of speculation since March 2020 about what the retail world might look like if and when the novel coronavirus pandemic end. While waves of the pandemic continue to impact the U.S., the relaxation of restrictions and the perception of overall improvement has led to an increase in store openings, which one firm sees as a sign that physical retail is entering a “new age.”

An analysis from Moody’s Analytics describes a slew of new store openings and states that the retail world has “a reasonably strong appetite for in-store shopping on both the demand and the supply sides,” according to Globe St.

Retail verticals with products that depend on in-person browsing, such as home furnishings, have been dominating store openings with new locations in places where demographic shifts have demanded more retailers.

Previously online-only brands like Warby Parker have also continued to build their physical retail footprints.

Major chains such as Aldi, Lidl and Starbucks have expanded their physical footprints throughout the pandemic, and 7-Eleven, Sonic and Dollar General have all announced big expansions in the offing.

The reopening of stores seems to be diverting customers away from e-commerce, as well. The prediction of a rush back to stores corresponding with waning COVID-19 cases held up during the summer and heading into fall, although concerns related to the delta variant kept many shopping at home. More recent indications of a rise in cases in parts of the U.S. is becoming a point of concern heading into the Christmas holiday season.

DISCUSSION QUESTIONS: Do you see a new era of physical retailing on the horizon? What will it look like?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Yes. Physical stores will support e-commerce and host unique, multi-sensory experiences e-commerce can’t replicate."
"...the retail apocalypse narrative is wrong and that it’s not that physical retail is dead or dying, it’s that boring, unremarkable retail is."
"All the digital natives notwithstanding, people are out looking for connection and merchandise."

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39 Comments on "Is physical retail entering a new age?"


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Jeff Weidauer
BrainTrust

Brick-and-mortar stores will always comprise a majority of retail sales. But e-commerce has come into its own and its share will continue to grow from this point forward. The challenge for retailers is blending the two in a manner that is seamless to the shopper.

David Naumann
BrainTrust

The COVID-19 pandemic temporarily changed some shopping behaviors, but for some consumers it has turned temporary behaviors into long-term habits. Some consumers are thrilled to be shopping in physical stores and malls and appreciate the social interaction. However some shoppers have appreciated the convenience of online shopping and now rarely shop at physical stores. Many decisions about online versus physical shopping experiences are driven by the type of product they are purchasing (experiential or commodity). It is a mixed bag.

Mark Ryski
BrainTrust

I don’t see a new era, per se, but rather an ever evolving landscape which has been permanently altered by the pandemic — changes in consumer expectations, advances in robotics, data informed decision making, technology and AI. I expect to see much broader use of automation in every aspect of retailing from logistics and supply chain to the delivery of customer-facing services. Despite all the current challenges, the future of retailing is exciting and bright.

Bob Amster
BrainTrust

Mark, I believe we’re on the same page on this one.

Ken Morris
BrainTrust

Stores as showrooms and distribution centers will be the norm. The theater of shopping has never been in doubt. People like to leverage their five senses when shopping, so I anticipate a more immersive shopping journey with surprise and delight taking center stage. Even grocery will look different with robotic pick, pack, and ship or pickup taking up the center of the store much like kitchens moving to the center of a restaurant. In-store is not dead; it has just been hibernating.

Perhaps it’s a little too soon to be focusing entirely on store openings. With rampant theft rings operating in some urban areas, many retailers have shuttered up dozens of locations. On the other hand, MFCs are making it possible for grocery stores to open up in what are generally considered food deserts.

Rick Watson
BrainTrust

The big question is not retail, it’s department stores. If moves like the Saks/Saks.com split become a trend (look at Macy’s …), the major department stores’ retail footprints could get starved.

The new investors are putting money into the digital spinoff business, and the “legacy” retail business gets … ?

Liza Amlani
BrainTrust

I definitely agree that the department store is going to have to enter the next stage of evolution in order to survive. Some say splitting physical and digital is the only way to stay profitable but there is so much more work to be done. The physical footprint needs to be purposeful and product experts and brand ambassadors need to be next-level.

Bob Amster
BrainTrust

Physical retail will be comprised of more showroom models, more magic mirror, more self-help kiosks and self-checkout POS, a discrete customer service area, discrete BOPIS and Will-call space, more communication among and to the hourly employee, to list a few characteristics. All of this innovation that we have seen creeping into certain stores will become ubiquitous in five years or so.

Scott Norris
Guest

When make-to-order bespoke clothing production really kicks in, these elements will all play key roles. Almost like going back to the beginning – personal relationships with your tailor and seamstress…

Dave Bruno
BrainTrust

I wouldn’t call the post-pandemic return to the store a “new era” as much as the next step in the evolution of retail. Retailers that positioned their stores as integral pieces of the ominchannel journey were those that were thriving before the pandemic and I believe they will be those who thrive after the pandemic. There will just be more of them, as the pandemic simply accelerated the need for many to deliver unified and integrated journeys.

Shep Hyken
BrainTrust

Other than a few of the most current facts, this is a question that could have been posed each year. There’s always something. We’ve been discussing how online has disrupted in-store for years. The pandemic accelerated the way consumers shop. (In other words, the big changes in the past 18 plus months would have happened anyway.) The point is that retail has been evolving since the beginning of retail. It’s just happening faster today.

Christine Russo
BrainTrust

If the new era of physical retail is omnichannel (meaning the same offerings from e-commerce like payment and delivery options – think Klarna, Venmo, etc.) then yes, this will be a new era. If physical retail embraces tech solutions for staffing, staff performance, loyalty, queue avoidance and inventory then yes, it’s a new era of physical retail.

Paula Rosenblum
BrainTrust

I think it’ll be more experiential, with more helpful employees and the ability to always have endless aisle.

It is my hope to see more independents and local stores that are integrated into the community, but that could be a blind hope.

Lisa Goller
BrainTrust

Yes. Physical stores will support e-commerce and host unique, multi-sensory experiences e-commerce can’t replicate.

Consumer desire for convenience will boost demand for fast curbside pickup and returns, and contactless checkouts. Expect more popups and shop-in-shop partnerships as fleeting, low-risk ways to test what drives sales.

To pamper shoppers and entice them into stores, more retailers could offer services like nail salons and Champagne bars. Also, social events like in-store fashion shows and live cooking shows would entertain consumers and compete with livestreaming.

Neil Saunders
BrainTrust

No, this is not a new era – it is the same era that has always existed. The difference is that the gloomy prognostications that physical retail was doomed – which were amplified by temporary shifts in behavior during the pandemic – have been proved to be completely false. Of course, this doesn’t mean physical shopping is static and that retailers can approach it in the same way – they can’t – but that’s not new either: good retailers have always adapted and changed their stores as consumer habits have evolved.

Dick Seesel
BrainTrust

It’s not surprising that physical retail is experiencing a resurgence as shoppers venture back to power centers, big box stores and (to a lesser degree) malls. At this point, it becomes a market share game: Who has the most/right locations and who has the ability to expand their footprint? It’s not all that different from past retail history where overcrowded segments went through a winnowing-out period.

It still seems inevitable, regardless of the physical bounceback, that online sales will grow at a faster pace. This was happening pre-pandemic anyway, but consumer behavior has undergone some tectonic shifts since early 2020.

Brandon Rael
BrainTrust

Physical retail is here to stay and will remain a significant part of the customer journey. Despite the fact that the pandemic fueled the surge of digital commerce, physical retail still represents over 85% of all the national retail sales. The new age requires retailers to power a connected experience across all channels, leveraging the stores to connect with customers, providing an outstanding experience, and connecting with the communities they serve.

While we are clearly a digital-first society, our economic model is built on physical stores, representing many things. For some consumers, the store is a micro fulfillment center for BOPIS and curbside pickup. To most customers, it’s a showroom to experience, discover and engage with brands, products, and services. Subscription-based services for commodity items are here to stay. However the store is where all the action is at and, if executed properly, this will help drive the industry forward.

Bob Phibbs
BrainTrust

To paraphrase Mark Twain, “Rumors of physical retail’s death have been greatly exaggerated.” All the digital natives notwithstanding, people are out looking for connection and merchandise. Hire great people, train them to be great associates, delight customers and bid them to return. Rinse and repeat.

Richard Hernandez
BrainTrust

Bob, you bring up a good point – hiring great people is a necessity for creating a great retail experience, however right now, that pool of people is smaller as many retail workers did not come back or moved on to other occupations. I hope the pendulum swings back the other way and we begin to re-build a pool of great people that want a career in retail.

Bob Phibbs
BrainTrust

There is this ridiculous notion that there is no one working in retail. There are a bunch of C-level executives looking the other way, managers who didn’t get trained defaulting to managing tasks, and associates bored out of their skulls picking and packing online orders while customers who made the journey to the store are left on their own. You can have smaller crews – if they know what they are doing.

Cathy Hotka
BrainTrust

We’re already there. Digital and physical are now inextricably linked. This is a welcome opportunity for the industry and will result in a host of new services for consumers. To keep this going, we need to nurture store associates and investing in stores.