The Future of the Retail Store

Patrycja Malinowska
March 29, 2017
Path to Purchase Institute 

The retail store as we know it is dead, said retail and consumer futurist and founder of Retail Prophet Doug Stephens, who cited various statistics about the explosive growth of e-commerce in a keynote speech delivered Wednesday morning at the Shopper Marketing Summit in New York. 

Yet he did not advise shutting down or downsizing physical environments, pointing to the fact that people still line up in front of Apple stores to get the next iPhone and that previously pure e-tailers today are opening brick-and-mortar locations. Instead, he espoused his theory that as e-commerce grows, everything about physical retail must change.

“Physical stores are becoming media,” Stephens said. “The physical store is actually the most powerful, measurable and manageable form of media that we all have at our disposal, but it takes a fundamental mind shift: we have to stop thinking about stores as places that distribute products – but experience.”

And he wasn’t talking about superficial adjustments such as the way the store looks, but rather the deep inner workings of how the store works. Instead of seeing a store as a place that houses inventory, successful players will perceive the space as a place to provide an experience and bring a brand story to life.

Stores are going to be less about the product itself or commerce or inventory, and more about production value, community and inspiration. Stephens shared examples such as Globe-Trotter in Germany – where shoppers can climb, canoe, sail, scuba dive and test out cold weather gear in an arctic chamber, among other experiences, or Pirch stores – where all the appliances are plugged in and shoppers can make a cup of coffee, cook beside a chef or even take a shower.

“The purpose of a store is not going to be about four wall conversion anymore,” Stephens said. “It’s going to be to create converts for the brand.”

The experience shoppers have when buying something is more important to them than the actual product. It’s also the greatest predictor of their loyalty, and savvy brands are moving in that direction. Rather than product, how marketers sell what they sell is going to be the remaining differentiator.

“We need to rig our stores to understand them the way we do our website,” Stephens said. “Then we can start to attribute value back to the store that became the catalyst for the future purchase.”

Path to Purchase Institute