How Brands Are Innovating Retail Post-Lockdown

• Shopping behaviours have evolved during lockdown — consumers are shopping more online and there are heightened anxieties around safety, financial uncertainty and an increased desire to make more sustainable choices. 
• To re-engage customers and entice them back to stores, retailers are unveiling new store formats that embrace innovation through social rewards, personalised value and sustainable initiatives.
• Physical stores will still account for £8 of every £10 to be spent in retail by 2025. (Intu and the Javelin Group, 2020)
• The wellness and beauty brands that will succeed, will create new retail formats that integrate social elements throughout, think digitally, and deliver sustainable experiences to appeal to new and existing customers

In this regular column, creative agency Household explores how modern wellness businesses can leverage consumer behaviour to create brand stories and experiential points of discovery for customers. 

This month it is examining how retailers are innovating post-lockdown, to re-engage customers and entice them back to stores.

As lockdown eases, physical retail experiences are an important channel for brands to reconnect with new and existing customers face-to-face after months of digital and virtual communications. Physical stores will still account for £8 of every £10 to be spent in retail by 2025 (Intu and the Javelin Group, 2020).

However, driving customer footfall to stores is proving to be challenging; footfall figures for 2-8 August were more than a third lower than in 2019 (Springboard, 2020).

Our shopping behaviours have evolved during lockdown — we’re shopping more online and there’s heightened anxieties around safety, financial uncertainty and an increased desire to make more sustainable choices. 

To re-engage customers and entice them back to stores, retailers are unveiling new store formats that embrace innovation through social rewards, personalised value and sustainable initiatives.

This month, we explore three key innovation areas:

1. Mobile connected journeys that reward customer engagement
2. Adding value through personalised ‘members’ experiences
3. Making sustainable choices easy

Mobile connected journeys that reward customer engagement
During the pandemic, social media became a lifeline for wellness and beauty brands to connect with their communities on a one-to-one basis or in groups. From Peloton hosting virtual classes on Instagram Live to fashion brand Très Bien using Zoom consultations to connect customers with stylists, brands used their platforms to educate, entertain and reassure. 

As stores reopen, brands are using social media partnerships to create mobile connected experiences that bridge physical and digital spaces. For example, Burberry has unveiled a new ‘social retail store’ format in Shenzhen, China, in partnership with Tencent Technology. The store uses a custom WeChat mini-program, where shoppers can book fitting rooms, stylist appointments and even a seat at the in-house café. This brand partnership is a big win for Burberry as it can reach WeChat’s one billion users and leverage the trust they’ve already established with WeChat to encourage them to visit the Burberry store. 

Burberry’s new store format also incentivises store visits by rewarding shoppers with social currency if they engage with the WeChat mini-program. The social currency unlocks secret items on the café menu and opens access to a hidden room called the ‘Trench Experience’. Each user is also given their own in-app digital animal avatar that grows with engagement. These perks gamify the physical experience, setting goals for customers to reach in-store and encourage repeat footfall until they achieve all the milestones. 

This store format is a prime example of social retail. Burberry is re-engaging customers by rewarding them for engagement and creating a space that is relevant in both customers’ digital and physical lives. The brand now needs to focus on converting WeChat users into its own loyal customer base. 

One way Burberry can do this is by enticing customers to join its own community through loyalty or membership schemes. 

Adding value through personalised ‘members’ experiences
The recession has seen consumers quickly prioritise their spending and switching their focus to how they can get the most value through their purchases. Consumers want to receive personalised offers and product recommendations on-demand in-store, which saves them time and money. 

In response, loyalty membership programmes are becoming more important. Lidl Plus, a scheme from supermarket chain Lidl, recently launched in the UK to enable its customers to access instant rewards, discounts on their favourite products and to track their spend whilst in store. This type of initiative increases customer expectations for personalised experiences, which in turn, creates the opportunity for brands to design hyper-personalised retail formats to re-engage local customers. 

According to PSFK, 76% of consumers will shop locally at different branches of the same retail chain if they provide different products and services. And Nike’s ‘member-first’ store concept, recognises this. 

Nike Rise offers a hyper-localised experience for its members in Guangzhou, China. The brand uses sales data from the Nike app to sell popular products in-store. This simplifies choice and ensures the products are relevant to members, which is helping to drive sales. 

One of the most engaging aspects of the experience is that it extends beyond the store. The Nike app gives members access to a weekly timetable of local sports events run by Nike associates. There is also a new app feature called ‘Nike Experiences’ that offers in-store workshops, events and localised workout inspiration.

Nike is building a strong brand community digitally and physically, using its store as the point of connection. The member-focused format adds value to the Guangzhou Nike community, whether a customer is purchasing new products, engaging with associates or connecting with other members. The store format incentivises customers to join Nike’s membership scheme to take full advantage of the digitally-connected store features. 

Making sustainable choices easy
During the pandemic, there was also a heightened desire to make more sustainable choices. 

McKinsey found that 57% of people made significant changes to their lifestyles to lessen their environmental impact. And, as stores reopen, brands are re-focusing their sustainability agendas to re-engage with eco-conscious customers and help them continue to make sustainable choices. 

Selfridges has unveiled new initiative ‘Project Earth’ which focuses on resale, rental, refill and repair services in its Oxford St flagship. Customers are guided into making informed sustainable decisions by new product labels that showcase eco-credentials, and educational talks on how lifestyle choices impact the environment. 

Customers can also fix damaged items at a Repair Concierge, rent clothing at the Hurr Collective concession or purchase second-hand items at Vestiaire Collective. The department store is placing brand partnerships at the heart of its sustainability strategy, as it builds upon its partners’ credibility to be seen as a sustainable-forward retailer.

The global challenge for brands is to create a circular economy, and Selfridges’ solution is to incorporate different services that prolong the use of its products, giving people the tools to adopt new sustainable behaviours. While other department stores are struggling to keep up to date with customers’ needs, Selfridges has its finger on the pulse when it comes to the latest fashion trends and is quick to respond, driving people to store to see its latest innovations.

As stores re-open to a new retail landscape, the role of physical experiences will need to evolve to drive re-engagement. 

The wellness and beauty brands that will succeed, will create new retail formats that integrate social elements throughout, think digitally, and deliver sustainable experiences to appeal to new and existing customers.