Is the U.S. Seeing a Dramatic Shift in the Face of Retail?

If you've stepped foot into a retail store in the past five years, you've probably seen a major shift in the floor design. What was once a maze of Gondola shelving, display cases, and slatwall is now as open as a sparsely furnished studio apartment. Instead of forcing people to wander alone through aisles of inventory, cocktail tables with barstools now give consumers and retail associates a place to talk. Rather than making consumers stare at products through rage-inducing, impossible-to-open plastic packaging hanging on shelves, inventory is laid out for all to see, touch, and test.

You've seen these changes, and dozens of other articles have documented it, but what were the economic and psychological factors that caused the face of retail to change so dramatically?

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Recessional Economics

When the recession hit, online shopping rose. The number of online retailers and transactions increased dramatically relative to the traditional brick-and-mortar shopping trends. Consumers could purchase without leaving the couch, and retailers could sell products without setting up a storefront. Brick-and-mortar stores, experiencing declining foot traffic and sales, saw this as a major threat, and even tried to inhibit online retail altogether.

Once traditional stores recognized that online shopping was a good thing, they began to change their in-store layout. This facelift was the physical manifestation of retailers embracing e-commerce, and highlighted a very interesting psychological relationship between consumer and product.

Psychologically Speaking

I've always been intrigued by the science of retail. As an engineer specializing in this industry, my first site question is almost always, "Why did you put that product there?" The answer is usually unique to the nature of the site, but there are defining similarities to every answer: let the consumers play with a product, allow them time to familiarize themselves with it, and let them develop an affinity for or relationship with it. This gave birth to the dichotomies of consumer isolation vs. open showrooms and plastic-wrapped inventory vs. testable products.

I'm sure the example that comes to mind is the Apple Store, but Apple is unique in that it is both the sole manufacturer and lead retailer of its products. A majority of the brick-and-mortar stores that felt the economic squeeze of the recession and the abandonment of in-store purchases don't manufacture the products they sell. If these stores change their layout to accommodate the trends, there's a risk the customer will use their store as a testing site, only to buy the product from another online retailer.

Here's where the psychology goes deeper: once the product sells itself to the customer, the store must set up attractive purchasing infrastructure. QR codes are a great example of how physical stores are serving its new customer base. Traditionally used to inventory products, QR codes are being used to aid the consumer. Download the store's app, scan the code, and a sales rep will bring you a brand new product. Skip the lines, skip the headache, take as much time as you want on the showroom floor, and take home the product with ease.

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Other Impacts

Many storefront projects now involve refurbishing rather than building new. While retailers are still building new stores in new markets, they're not investing in multiple stores within one geographic location. They're cutting down the space they need for staff, compartmentalizing to accommodate in-store pickups, and using the space to house more display tables.

The key is to create a storefront model that works now, and can be adapted in 10 years. In the rendering above, the client is adapting infill space for new storefronts, likely to work hand-in-hand with the new buyer behavior I explained above. Retailers like these are investing in flexible spaces today for the changing dynamics of tomorrow's economy.

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  • Brian Bradner
    Brian Bradner
 
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