The future high street is set to look very different, but how can retailers adapt? RFID can be a valuable tool for improving the customer experience and embracing micro fulfilment.

From Buying to Shopping: What Does The Future Bricks-and-Mortar Retail Store Look Like?

It’s difficult to escape news about the so-called ‘death of the high street’. For many industry leaders, the rise in e-commerce retailers and the collapse of many large high-street brands have significantly changed how people think about future bricks-and-mortar retail stores.

Consumers have been increasingly switching to online shopping for many years. The percentage of global online sales has been rising gradually since 2016, but the global Covid-19 pandemic undoubtedly accelerated this consumer change. In the UK alone, at the height of the pandemic in January 2021, e-commerce sales accounted for almost one-third of all retail sales.

As brick-and-mortar retail store footfall fell during global lockdowns, some retailers abandoned the high street altogether. Over the course of the pandemic, over 17,500 chain store outlets disappeared from the UK high street entirely. This includes large fashion chains such as Topshop, John Lewis, and Debenhams. 

However, at the same time, some brands used the pandemic as an opportunity to explore innovations in brick-and-mortar shopping. In October 2021, e-commerce retailer Amazon opened its first physical store in the UK, while retailer Nike pressed ahead with plans to open an ‘immersive’ store in Seoul, South Korea. 

All of this begs the question: what will the future high street look like? In short, significant changes are ahead for how retailers envision their future bricks-and-mortar retail stores, and it all has to do with creating a memorable customer experience and improving omnichannel retail options. 

The ‘Death of the High Street’

 

So, what do news outlets and retail leaders mean when they talk about the ‘death of the high street’? 

As technology becomes more accessible and flexible, more and more people are switching to online shopping. By the time the Covid-19 pandemic hit in 2020, online sales were already rising year on year. However, over the course of just a year, the trend became the norm. 

In the UK alone, online retail sales grew by 36% in 2020–the highest e-commerce growth in one year since 2007. But the trend is not isolated to the UK. Global e-commerce sales grew by almost 28% in 2020, with the most e-commerce sales occurring in China and the United States. 

Though lockdowns were a primary accelerator for online shopping, there are further reasons that people choose to shop from online retailers instead of brick-and-mortar retail stores. The top three reasons for opting to shop online instead of in-store are free shipping, lower prices, and convenience. In the end, 43% of consumers say that they could now go without shopping in a physical store, meaning the future bricks-and-mortar retail store could become redundant.

how many people shop online

While almost three-quarters of consumers believe that most shopping will happen online in the future, this is unlikely to be the case. 88% of Generation Z consumers–the youngest demographic of shoppers today–say they still prefer to connect with a brand on both physical and digital channels. Furthermore, just 24% of Gen Z consumers say they strongly prefer to purchase online

Evidently, then, there are still opportunities for future bricks-and-mortar retail stores. However, this will require a significant change in how retailers envision their physical retail stores. With the rise of omnichannel retailing, customers want multiple ways to purchase from a brand, which could mean blending the online and physical experience. 

Furthermore, shoppers don’t just head to stores to purchase products anymore, but rather to have a shopping experience. As such, there are opportunities for retailers to turn their stores into hubs of customer experience rather than just functioning as sales points.

Why Physical Stores Need to Change

 

At the same time as e-commerce has risen in popularity, so too has omnichannel shopping. Omnichannel refers to the number of ways a customer has to purchase and receive a product. For example, those options could include in-store, online, via an app, and a myriad of shipping opportunities like picking up orders from a physical location and the ability to return items to a store.

Studies show that customers are increasingly turning to omnichannel retailing. This includes the options already suggested, as well as blends of physical and online shopping. For example, customers might view products in-store and then return home to buy online or use their smartphone while in a store to research products–which 56% of shoppers do

Consequently, retailers must embrace omnichannel retailing if they are to stay competitive in the post-Covid world. Not only because customers are asking for multiple ways to shop, but because, on average, omnichannel shoppers spend more than other customers and are more likely to stay loyal to brands. 

For example, a Google study found that retailers who implement omnichannel strategies drive an 80% higher rate of in-store visits. Furthermore, omnichannel customers also spend 20% more than other consumers. Finally, companies that embrace omnichannel retailing retain 89% of their customers, compared to a 33% retention rate for companies with poor omnichannel strategies. 

We know that the average customer already engages with multiple channels. According to McKinsey, more than half of shoppers engage with three to five channels before making a purchase. One of these channels is likely to be a physical retail location. As such, future bricks-and-mortar retail stores will be important for implementing omnichannel opportunities.

customer retention rate

Aside from omnichannel options, today’s consumers are also increasingly asking retailers to turn shopping into a complete experience. For example, one study found that although 60% of shoppers prefer to shop online, more respondents (67%) said they miss being able to interact with products. Furthermore, 80% of under-30s say they would shop in-store if the retailer had interactive screens installed in physical locations.

As the so-called attention economy begins to affect retailers, brands will increasingly be forced to embrace new ways of keeping consumers entertained while in stores. The future bricks-and-mortar retail store will thus also be a site of customer experience instead of a sole arena of selling.

What Does the Future Bricks-and-Mortar Retail Store Look Like?

 

We’ve clarified that there are two key ways that retailers can adapt their future bricks-and-mortar retail stores to suit the consumer: by embracing omnichannel retailing and transforming stores into primarily customer experience hubs. But how will this actually change the future high street?

 

Customer experience centres

 

Some companies have already transformed their physical stores into places of experience. We’ve already mentioned Nike’s immersive store in South Korea. Here, customers can enjoy personalised, interactive experiences and compare real-life products, helping them make their purchases.

 

It’s not just clothing brands that are emphasising the customer experience, though. Since 2014, Starbucks has opened six Starbucks Reserve Roasteries: larger physical locations focused on giving customers an entire coffee experience. These stores feature a more extensive menu than regular stores, coffee tasting bars, and augmented reality tours.

Whether the brand is in the food or fashion industry, every customer experience store has the same focus: to build brand loyalty, offer personalised experiences, and encourage customers to buy again and again.

However, retailers must choose the experiences offered to customers in-store with brand consistency in mind. Brand consistency is crucial for connecting with consumers and building a loyal brand base. Your online and physical presence should create a seamless shopping experience, which will make the customer journey more exciting and improve your omnichannel strategy.

 

Micro fulfilment

 

When implementing a successful omnichannel strategy, you must offer as many ways to buy as possible. To do this, retailers can utilise their future bricks-and-mortar retail stores as micro fulfilment centres.

The Covid-19 pandemic has exacerbated the trend toward local shopping. Data from Deloitte shows that smaller town centres in places like seaside towns and commuter hubs recovered much more quickly from business lockdowns than larger city centres. Additionally, 57% of consumers say they would rather spend at local businesses after the pandemic.

reopening rates of stores

Thus, there is an opportunity here for stores to combine selling and shipping from the same store, making it both more environmentally friendly and quicker for local shoppers to get items delivered to them. 

42% of customers say they expect a two-day shipping option to be available at checkout. This isn’t always possible with traditional distribution centres, but if each physical location is utilised as a micro fulfilment centre, brands will likely achieve this. With increased customer satisfaction comes increased sales–data from e-commerce business Metapack shows that retailers have seen a 30% increase in online sales after implementing micro fulfilment centres in retail stores.

How RFID Can Help Futureproof Your Retail Store

 

Technology is essential when it comes to transforming future bricks-and-mortar retail stores. One of the most crucial is RFID, which can assist with elevating the customer experience in physical stores and accomplishing omnichannel strategies. 

 

Firstly, RFID is essential for implementing personalised and interactive customer experiences in stores. For example, RFID tags on products can help create interactive fitting rooms, where sensors know which products a customer has brought into the room. Along with interactive screens, the customer can receive product information and see similar products, contributing to a more successful buying experience.

For brands focused on sustainability, RFID tags can also give customers a behind-the-scenes look at supply chains. Fashion brand Sheep Inc. has embraced this by linking every product produced with a real-life sheep on their wool farm, meaning customers can see what ‘their’ sheep is up to by scanning an RFID tag on their clothing.

why RFID exists in stores

With the future bricks-and-mortar retail store functioning dually as a sales point and a micro fulfilment centre, brands must have an accurate view of their stock. With RFID, retailers can get a real-time view of where stock is, allowing them to more accurately enable omnichannel options like ship-from-store, return-to-store, and pick-up-from-store.

 

An estimated 62% of organisations have just limited visibility of their supply chain, while only 6% have achieved full visibility. Without complete visibility, it will be increasingly difficult for retailers to adapt to consumer demands, especially with regard to increasing shipping options and allowing for faster order fulfilment. However, we know that these trends will be vital for the future high street and future bricks-and-mortar retail stores.

extent of supply chain visibility

RFID offers a variety of use cases when it comes to future bricks-and-mortar retail stores. The technology is crucial for achieving a successful omnichannel strategy and will be increasingly important for establishing in-store interactive customer experiences. As a result, RFID can offer retailers an efficient way of increasing sales and improving brand loyalty. At the same time, it also allows brands to be at the forefront of an innovative future high street.

Detego Retail Store Application

Futureproof retail stores with RFID

Stock accuracy, on-floor availability, and omnichannel applications in stores.

Book a demo with RFID to find out how our cloud-hosted RFID solution could help you build a future bricks-and-mortar retail store. Our multi-user app can provide intelligent stock takes and improve the customer experience, while RFID can help you effectively turn your store into a micro fulfilment centre and establish e-commerce operations with real-time, item-level inventory visibility and analytics.

Unfortunately, there are still challenges for retailers to overcome in 2022. But an innovative solution like cloud-based inventory software could offer a way to thrive.
Learn how to elevate customer experience, build smarter operations, and optimize your inventory with Detego software and Zebra's retail-ready hardware solutions.
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