Is selling ‘an experience’ rather than ‘things’ the future of retail?

22 November 2019

"While the evolution of the retail industry in such ways provides interesting reading, the question on every planner’s mind is whether the planning system can keep up."

Store closures and the steady decline of the high street featuring in the news more than ever has meant that retailers are continuing to work towards developing more innovative ways to engage with customers. Recent years have seen approaches such as targeted advertising, greater use of technology, introduction of food and beverage, and creation of pop-up and meanwhile uses; all in an attempts by the retailer to stay relevant.

What is interesting, however, is more dramatic transformation of late, whereby retailers are in fact moving away from selling ‘things’ and instead focusing on selling the brand and ‘the experience’. Within this, customer experience is becoming more and more focused on the use of social media to create ‘instagramable opportunities’, with retail success increasingly measured by footfall and social media mentions rather than traditional sales.

The Office of National Statistics (ONS) (2018) found that 78% of adults primarily access the internet using smartphones, with this figure rising to 99% for those aged between 16-34. Having said that, and while online retail sales have risen overall, 83% reported the reason they are reluctant to make purchases online is due to preference to visit the store and see products in person. These findings present the opportunity for retailers to merge the internet-dominated nature of society with the want to still visit stores. This idea has seen the rise of concept stores; generally recognised as retail stores that do more than just sell products, instead focusing on generating direct interaction with customers and marketing through the use of social media.

Planning Potential has first-hand experience in this sector, working with Adidas to secure the necessary consents to enable them to deliver their latest concept flagship store on Oxford Street, which launched last month. The store uses technology to create more than a shop; a destination where consumers can interact digitally to create their own products and test out prospective purchases; including through interactive changing rooms and an on-site running lab facility. Another recent and, perhaps extreme, example of this approach is the Samsung store at Kings Cross, where customers cannot actually buy anything. Instead, the store focuses entirely on customer experience and selling the brand, providing a destination for consumers to try out new products, attend events, listen to music, and even relax and meet people in the gaming lounge or on-site café.

A particular focus for this immersive approach has also been within the beauty sector. Notably, Boots launched its first concept store in Covent Garden earlier this year, where while you can still find your typical Boots products, focus is on customer interaction through live demonstrations, virtual makeovers, beauty treatments and even an ‘Instagram Zone’ (yes…really!) where shoppers can showcase their experience online. Similarly, the Perfume Shop have developed their version in Sheffield, which on top of their usual range, provides shoppers with an interactive perfume scented wheel and opportunity to personalise purchases; and of course, they are then encouraged to share their experiences online.

While the evolution of the retail industry in such ways provides interesting reading, the question on every planner’s mind is whether the planning system can keep up; particularly how it can be used to successfully strike a balance between appropriate legislative control and enabling the flexibility needed to stimulate growth and success. Indeed, paragraph 85 of the NPPF recognises that planning policies should allow town centres “to grow and diversify in a way that can respond to rapid changes in the retail and leisure industries, allows a suitable mix of uses and reflects their distinctive characters”. Recent consumer patterns and retail offerings suggest shoppers want more than just to shop and buy ‘things’, because they can do that online. The specific attraction for shopping in-store should, therefore, focus on enabling experiences that cannot be achieved without physically visiting stores, instead creating the environment for and using the consumer to promote such experiences online. This focuses on initially boosting footfall and expenditure on other aspects of the in-store experience, i.e. food and beverage, beauty treatments or product personalisation; while, in turn, is likely to increase awareness of the brand and, thus, online sales of things further down the line.

In response, while a greater focus on policies encouraging local authorities and decision makers to view innovation in retail more positively may have a contribution, the ability to make any real change ultimately comes down to the application of and weight attributed to the Use Class Order. It is clear that the concept store examples mentioned in this article far exceed the scope of an A1 (shop) use, instead combining a multitude of uses (i.e. A3, A4, D1 and D2) to form a destination, which can be used differently, dependent on time of day or current trends. Currently, the Use Class Order fails to recognise the benefits of this and therefore needs to enable greater flexibility of building use, which is flexible for different times of the year, week or day; to facilitate continued attractiveness of our high streets.

Having said that, now the changing nature of retail discussed in this article is becoming a real hot topic, it may prompt calls for changes to this legislation. Planning Potential has recently been involved in discussions with London First on the future of use classes to ensure flexibility, and have worked with a range of high street operators including high-profile store advances such as that of Adidas; to secure works to enable more flexible use of units to enhance the vitality and viability of town centres.

If you would like advice on any of the above, please do get in touch.

Katia Clarke, Assistant Planner