Retail, Remastered: The New Storefront

Image: Tonal

Retail is getting a makeover.

Despite doomsday warnings of the death of brick-and-mortar, retailers like Nike, On Running, and lululemon are finding success in building experiential shopping installations.

Survival of the fittest. The in-store concept isn’t dead, but it’s evolving. Smart retailers are discovering that ecommerce doesn’t have to cannibalize their storefronts ― in fact, both channels can reinforce one another.

Nike CEO John Donahoe cited store expansion as a cornerstone of their five-year transition to a 50% digital business:

“What’s clear across the marketplace, both owned and partnered, is how online to offline is becoming second nature. We know that higher level[s] of connectivity across physical and digital are driving better consumer experience and loyalty.”

Tech-and-mortar. Interactive storefronts are nothing new (see: Apple), but tech-enabled experiences in non-tech companies’ stores are a fresh trend. Both incumbent giants and upstarts alike are successfully infusing tech into the brick-and-mortar experience:

  • Nike is nurturing brand affinity through in-store features available to members via its app.
  • b8ta has partnered with Tempo and CLMBR to generate leads from its futuristic storefronts.
  • On Running’s flagship store features a “magic wall” that analyzes customers’ running styles in real time.

Funnel shift. The storefront is no longer just the last part of the funnel, but interspersed in every step from lead gen to checkout. A key lever of the connected fitness strategy, lululemon plans to expand its MIRROR shop-in-shop displays from 150 to 200 by the holiday season.

Some caveats. To justify investment, companies must be precise and intentional as they build high-cost, tech-enabled storefronts.

Further, as AR and VR improve, brick-and-mortar will face competition from virtual shopping experiences and AR try-on features like Snapchat’s. Sensing the trend, Athleta parent Gap recently acquired Drapr, an augmented reality app. Still, demand for personal in-store experiences isn’t likely to die anytime soon.

Checking out: In the future, digital will likely be king ― but innovators are proving that brick-and-mortar experiences can provide strong synergies and build brand affinity beyond the capabilities of a pure ecommerce business.