Recent research from the UK suggests that in the past decade 25% of all British department stores have closed. The business journals seized on this research and asked the obvious question – is there a future for department stores in the twenty-first century retail industry?
It’s not just a problem for the UK. Retailers across the world are watching their industry change dramatically as customers expect better service and greater personalization. Amazon patented their one-click purchasing system back in 1999 – that’s two decades ago – and during that time they (and other online retailers) have been innovating and redefining retail much faster than any of the traditional brands.
So how can retailers transform the shopping experience so customers actively engage with stores once again? There is a very interesting concept called The Lobby in Stockholm that I believe points the way for many in the industry and it is focused on a very holistic vision of the complete shopping experience.
To start with, The Lobby does not attempt to just continue the online or in-store battle. The Lobby is trying to explore questions around customer behavior. The designers of this concept are asking questions such as why do customers actually go to a shopping center? What is it that they need to achieve by going there? What do they need that could make their life easier?
It’s easier to think of the Lobby using their own phrase – it is a retail innovation lab rather than a shopping mall. It does include stores featuring many brands, fashion, and space for artists and collectors to mix, but it also features places where customer can relax – or work. There is also a post, parcel, and print center, allowing customers to shop online and ask for products to be delivered to The Lobby. Changing rooms are provided so products that have been delivered can be checked and anything the customer doesn’t want can be immediately returned.
To my mind, what is so exciting about a retail concept like The Lobby is that it is ever changing and dynamic. Brands come and go. It is the complete opposite of a shopping mall featuring the same brands that you might see in any city across the whole of Europe. Fashion sold at The Lobby is far more likely to be unique and to maintain a strong connection to the designer – who may well be the person answering your questions in-store.
Although The Lobby is a hi-tech concept environment that blends the in-store and online experience, it does remind me of how retail used to be before the major chains dominated every shopping area in every city. The Lobby features small, specialist retailers with genuine skill and craft producing products in small quantities – retaining a sense of being unique.
Of course, removing the major brands from shopping malls will not address the problem that retailers face today, but retailers should look at The Lobby and ask several questions. Why do customers go shopping today? Where is the driver or reason to physically travel to a store when everything is immediately available from their phone? What are the stores offering, either product or experience, that is not possible to deliver online?
This is where The Lobby is succeeding. Their highly personal and unique approach is very difficult to replicate online and yet they have also made the process of online shopping very simple too. It’s easy to imagine a customer ordering one outfit online and arranging to collect it at The Lobby click-and-collect area specifically so they can check what’s new with the stores there. That is a fantastic connection between online and in-store retail. Retailers should remind themselves that customers want more than products when they visit a store or shopping mall – they want an experience.
The department store is not finished, especially in the Nordics region. However, retailers that want to succeed in the modern environment need to find a way of blending in-store retail with a great in-store experience – stores cannot just fight online retail, they must coexist to succeed.