We always look at what the competitor is doing. Do you follow them, or do you pass them? Are you keeping the brakes on, or are you more actively trying to gain market share? The physical store plays an important role in this.

Despite the uncertain state of the market, I am pleased that the market sees that innovation in physical stores is necessary to make a difference in the high street. The types of retail projects are becoming increasingly diverse, out-of-the-box, creative and interactive. I’ll take you through the trends in physical retail for this year.

1. E-commerce becomes commerce

In 2022, the foundation has been laid for true omnichannel. The retailer is increasingly consciously aligning the physical store with its online channels. The customer journey is leading in this. The customer experience is always consistent across all channels, supporting the overall customer experience. It is important that the retailer also sees the physical store as a channel, just as the web shop is. And not as an end point in the customer journey. After all, it does not matter where the final product is sold. As long as it’s with you. Fortunately, more and more retailers are aware of this. We are (almost) able to say goodbye to the term e-commerce in 2023. Instead, we ‘just’ talk about commerce.

The role of the store will therefore change more in 2023 to fit more into the overall strategy of the organization, instead of being a silo within the organization. The store becomes an integral part of the marketing strategy and thus the overall business.

2. The magic word of 2023 is ‘purpose’

In 2023, ‘purpose’ will be the magic word for retail projects. In this context we mean facilitating targeted digital solutions for physical spaces. Too many solutions are implemented as just a “cool” add-on. Without a goal and a good strategy, it is difficult to measure or even achieve ROI. We notice that retailers too often look at what the competitor has in store in terms of technology, and then simply copy it. Relying on technology is always the wrong choice and is a larger investment than it brings in. Only implement technical experiences from the initial goal: what will it bring to the customer? The chance of success immediately increases if you stick to this rule of thumb. It’s best to think big on in-store tech strategy and start small by implementing one solution at a time. Measure effects continuously and adjust the installation accordingly.

3. Shrinking shop floors

Another important trend for 2023 is the size of the stores. We will see more big brands and retailers in the city centers. Being present in the heart of the shopping streets obviously means that you have less shopping space. Less retail space naturally also means fewer emissions and, in some cases, fewer investments in rent or mortgage. It also means less (stock) space to show your entire collection, but that can easily be solved with technology that allows you to present your entire collection in a digital way. A good example of a brand already doing this is IKEA Décoration in the center of Paris, where IKEA only sells the products most popular with Parisians, such as bedding, household linen, tableware, and lighting. Specially to get closer to the consumer.

Volvo is another good example of how a major retail brand is settling into urban environments. Where most car brand showrooms can be found on industrial estates, far outside the city centers, the Volvo Studio concept brings the automotive experience to the center of Rotterdam. This city store has much less square meters but offers as much experience as a large showroom. This video gives a good impression of the City Store:

4. Expanding shop floors

Although this sounds very contradictory to the previous point, what we mean by this is that some brands choose to close multiple regular stores and open a megastore in a different location. A megastore that can serve as a flagship store or brand store to reinforce the brand experience. In addition, you can use the store as a test lab to try out new products or concepts that you can then roll out in the rest of your stores if successful. You put so much brand experience into the store that a visit can be seen as a day out for consumers.

5. Staff shortages continue

In our conversations with retailers, we notice that they regularly struggle with the persistent shortage of staff. We addressed this issue in a previous blog post. Almost three-quarters of consumers (70 percent) notice that there are staff shortages at stores. A quarter of them experience this regularly or often. Customers between the ages of 18 and 34 are most affected, according to research by Q&A Insights & Consultancy. For example, they complain that they must wait longer before they are helped. Retailers want to reduce the workload on the shop floor and at the same time ensure that the customer continues to receive an optimal service and experience. To give the customer the feeling that they are being helped in a personal way and, of course, in a professional manner, it is a solution to focus on digital communication. These digital applications, such as a smart mirror, can make sales employees easier to carry out their work in an attractive way. Retailers can also focus on innovation to explain complex matters in a clear way. In this way, the deployment of employees can be optimized.

At First Impression we look forward to what 2023 will bring. We are convinced that purpose, customer focus and personal experiences will be of great importance. The customer and his needs are at the heart of all upcoming retail innovations. I cordially invite you to come and get inspired in our renewed experience center.

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