Smart concepts for smart stores

The retail sector is caught between new customer expectations and technological pressures resulting from a newly emerging competitive dynamic. Without disruptive innovation, the decline is inevitable, according to experts. If you want to remain successful in retail for a long time to come, you have to bring along a multitude of qualities that we summarize in one term: smart stores.

Smart Store
The big question for retailers: How to stage products and to let the shop concept shine. ©

By this we mean intelligent concepts for smart stores that follow a holistic formula for success. As an innovation agency, we help retailers make their visions a physical reality and create experiences. To do justice to this demanding role and establish promising smart stores for the future, it is also essential for us to know and understand the challenges facing the industry. Below you can read about the factors we believe are influencing retail, and the formulas we have identified for the sector’s continuing success.

Challenges facing Retailers

Customers are not so easily impressed anymore. »Been there, done that« has become an increasingly common response to retailers’ new ideas. Exceptional experiences with a sustained surprise effect are still sure to win customers over, but the probability is falling. Established values and genuine identification are what generate enthusiasm over the long term. Products need to truly impress saturated, demanding customers: through careful, curated selection and smart presentation.

Retailers who want to stay afloat in the future have to do a lot of things right. Distinctive brand identity has to be developed in order to build up a solid and sustainable customer base. The aim is not to anticipate trends, but to redefine them; to select the right employees and train them to ensure strong external representation and to offer excellent service. To bring together a community that draws customers into stores where they can encounter their peers and idols. By resolving to liberate themselves from old business models and refusing to be followers, retailers can take on an active role thanks to faster cycles. In our view, strong alliances are still an underestimated way to come out on top.

Megatrends influence Retail

No one knows what the future will bring. However, global megatrends are an important source when looking to predict future developments. Megatrends, a concept defined by futurologists, make it possible to gain a perspective on the years to come. Companies that are able to identify the global megatrends influencing their own business will be able to orient themselves within a highly dynamic market. We believe that the following megatrends will have a fundamental influence on the retail sector, and especially on brick-and-mortar business.

Sharing Economy. A sector like the retail sector that generates revenue through consumption and ownership is threatened by the sharing economy. This concept is governed by the assumption that people are buying and owning fewer material goods and prefer to use them for a limited period of time. Starting with cars or bicycles, shared use of resources also extends to clothing or furniture, products that are defined by rapid changes in trends. Retailers are already starting to offer product rental or exchanges as a way of reacting to the sharing economy.

Customization. It has been demonstrated that our society is characterized by the quest for self-actualization. This is expressed in part through the desire to actively play a role in designing our own surroundings. Whether for rooms, products or clothing, the degree of individualization is steadily on the rise. Meeting this need in clever ways will be a decisive factor in the success of future retail concepts.

Green Society & Fair Trade. We believe that consumer awareness of health, sustainability and social issues will be greater in the future than ever before. Retail has the opportunity to actively anchor these values in their brand identity and product lines. If companies are able to represent their target audience’s value system over the long term, they will establish a thorough, value-based connection with their customers instead of a short-term »experience« effect.

Digitalization. The invention of the internet, smartphones and other technologies set an unstoppable process in motion. Technological opportunities are constantly being developed and computers are now inventing new computers without the help of people. Digitalization is a linchpin for some of the other megatrends we have listed – without this, many things would not be possible. Thanks to digital solutions and platforms, for example, product sharing models (sharing economy) or individual product adjustments (customization) can be implemented extensively.

Online and Offline can go along

Speaking of digitalization – The springboard for the last wave of digitalization in retail was online retail. Since then, the online-offline dilemma and the endangerment of brick-and-mortar businesses has probably been the most debated topic in the sector. Now online retail is entering stores again with a stronger presence. It’s clear that the two sectors will continue to merge and benefit mutually from each other’s potential. Online retail offers maximum convenienceand facilitates a level of transparency and flexibility that in-store retail has yet to achieve. On the other hand, offline retail offers an experience, emotional connection, a carefully curated selection and personal contact. Retailers that combine both worlds are already heading in the right direction. Offline and online should learn to get along.

Smart Store – The formular for succesful stores

Symbiosis between online and offline retail, excellent service, a strong community and a curated selection have already been addressed as elements that are necessary for success. Combined with a sophisticated design concept, flexibility and the integration of digital technologies, Smart Stores are equipped for the future.

Smart Store
An intelligent shop concept combines a variety of success factors. ©DITTEL ARCHITEKTEN GMBH

Digital technologies within stores are one of the success factors, in our view. It is crucial to seamlessly integrate these elements into the overall concept, allowing them to interact with the space and fit in with aesthetic demands. If all this is true, digital technologies can enrich the individualized experience of stores in a variety of ways. Read more on this in our next article, »Future shopping: personal, easy, social«.

Good design will continue to satisfy people’s deep need for a sense of aesthetics, comfort and atmosphere. It is eye-catching, emotional, surprising, positive, and creates an experience. If the experience is worth sharing on Instagram, these become instagrammable moments, which we see as an expression of the increasing connection between reality and the virtual world. Good design is functional and sustainable for the future. And since we know that changes are happening faster and faster, successful planning of store concepts needs to rely on flexible, expandable and modular solutions.

Smart Store
The Pop Up Box interprets flexibility at its best: the convertible retail space offers retailers and exhibitors a customizable presentation area. ©DITTEL ARCHITEKTEN GMBH

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