Department and concession stores of the future
28 May 2020
Author: Linzi McGuire
In August 2019, long before Covid-19 was on anyone’s lips, KPMG and Ipsos Retail Think Tank (RTT), reported that the landscape of shopping would change dramatically by 2025. It said that over the next six years, retail would evolve and brands will sell directly to consumers leaving department stores out of the loop. So, given the occurrence of a global pandemic which has forced an acceleration of “future” trends to the surface while stalling other industries in their tracks, what role does the department store have and will the RTTs prediction materialise in a much shorter time frame?
Following a 4-week exploration into the challenges and trends experienced during the pandemic, here’s what we think the future of department and concessions stores might look like in the coming months and years:
Redesigned smaller concessions and tech enabled experiences:
Concession stores will have to be fundamentally redesigned to turn the typically chaotic and busy shopping experience into a socially distanced steady flow. John Lewis just announced their stores will open in batches from June with lesson they learned from Waitrose. But social distancing may not be the only new addition to the shopping experience. With hygiene at the top of everyone’s list it’s likely that in concession stores we’ll see a reduction of product on shelves to touch and browse before buying which means that brands need to do two things:
- Harness technology to bring their products and brand stories to life in concession stores: the challenge is creating and retaining a relationship between store, product and consumer when non-contact is the order of measure. This is where technology can be used to help consumers engage and learn, whether that’s through digital or AI.
- Use the concession store space in new ways: This goes for both the brand and the store. It’s likely that brands will take a reduced footprint in store and their concession will become a showroom for their collection. This could mean that goods need to be ordered from the warehouse to be purchased at the till, much like an Argos model, or ordered to be delivered to home or click and collect for a later date.
Click and collect is king:
In the past 12 months alone, department stores have seen a dramatic shift. Struggling chains like House of Fraser and Debenhams bear stark contrast against the likes of John Lewis who have reshaped their service offering after seeing a spike in online and click and collect orders and diversified to offer click and collect in third party partner outlets like Waitrose and Co-op. An evolution to click and collect is Currys PC World have just started offering contactless phone and collect at a selection of stores as their branches reopen.
Consumers are demanding click and collect as standard, even more than home delivery, so department stores need to adapt their space to accommodate for this shift if they are to survive. Do they need to rethink separate click and collect entrances, larger queuing space for safe wait times, booking slots for collections to reduce queues, larger warehouse space for storage of click and collect items and alliances with other retailers? These are all possible in the new world.
Remind consumers that retail therapy can be a form of wellness:
The brands to win will be the ones who find a way to make shopping part of the wellbeing experience after the trauma of essential only lockdown shopping. It will become important for signage and safety kit to become part of the background design so they reassure rather than panic the consumer.
And more than that, consumers want to feel good, not just reassured, so department and concession stores who become destinations for wellbeing experiences will be the ones to win longer dwell times and increase their chances of a sale.
It’s likely that floors or areas of department stores will be “owned” in different ways. With such vast spaces, stores will need to repurpose their spaces to draw in the crowds. In much the same ways as we predict for shopping malls, services such as leisure or restaurants or smaller A1 spaces are likely to appear more and more in department stores.
The high street redesigned:
With the high street largely shuttered for 8 weeks, many brands will find themselves having to make a decision on whether they can afford to retain the prime retail locations they inhabited pre-covid. This could result in us seeing brands opt to become a concession in a department store over renting their own store, making their department store debut.
Likewise, existing department store space may have to be repurposed. it has already been reported that Next are first on the list to take advantage of department store space with their very own Premium beauty hall. They’ve just signed new flexible leases to take over the existing beauty halls in five Debenhams stores. It’s reported that these will operate as standalone Next premium beauty stores.
Lindsay Hey, Technology Director comments “If there’s one lesson to come out of this global pandemic, it’s that companies and organisations are capable of quickly accelerating new ways of working when there is no other choice. The challenge for brands and non-essential retail is to adapt just as quickly. Those who are agile will scoop the benefits in this new world. It will be interesting to see how technology and new models can help in this race and who the new winners will be.”
Join us during the remainder of this week where we look at the impact of the changing face of the shopping environment, before finishing the week with a look back on everything we’ve talked about in the last few weeks. Follow our LinkedIn page to stay up to date with our latest views.
ABOUT THE EXPERT:
For more information on Lindsay Hey, Technology Director, visit her LinkedIn page.