Retailers attract shoppers with in-store experiences

Customers are looking for engaging, immersive and convenient experiences that give them a reason to visit stores instead of shopping online. As a result, experiential retail is counterbalancing the growing popularity of e-commerce and driving profitability by increasing physical brand presence, the report adds.

Although covid-19 has changed shopping behavior, pushing consumers to buy more goods online, with out-of-home activity resuming and shoppers returning to physical stores, organized retailers are resuming plans expansions that have been stalled during the pandemic. According to the report, experience was a critical factor in the design of retail spaces, even in pre-covid times. “However, in the wake of the pandemic, the productivity of retail spaces has come into focus, with the ‘experience’ becoming more crucial due to its ability to increase customer engagement and not just sales” , added CBRE.

Transaction activity in the retail sector increased more than 100% on a sequential basis during the June quarter. In the first half of 2022, it recorded massive growth of more than 160% year-on-year, albeit from a low base, he said.

Growth was driven by pent-up demand, which led to renewed physical visits to stores, although online shopping continued to perform well.

However, CBRE said “experience” is becoming an important frontier in attracting consumers. “Across cities, we’re seeing brands resize and recalibrate their brick-and-mortar store strategies to diversify their portfolio and expand their footprint, with ‘experience’ quickly becoming an important frontier in bridging the retailer-consumer divide,” said Anshuman Magazine, President and CEO. , India, Southeast Asia, Middle East and Africa, CBRE.

“While we have reason to believe that retail activity has already reached pre-pandemic levels, covid-19 has shifted consumer priorities. It is therefore imperative to think about how real estate players can improve their spaces to increase the experience quotient and therefore the value,” he added.

Merchants are also favoring dynamic and flexible leases because they meet ever-changing consumer expectations. This is driven by the demand for plug-and-play outlets, especially for small independent businesses. Showrooms with custom designs are becoming increasingly popular. Citing examples of what brands are doing and can do, CBRE said retailers could do well by infusing more technology into stores.

Apparel retailers are using technology like virtual try-ons and smart mirrors to let customers “check out” the outfit or accessory instead of actually putting it on. Given the popularity of activewear, retailers are also working with brands to include these categories in their offerings. CBRE cited the example of perfume brand Jo Malone’s store in Mumbai, which offers services such as perfume mixology.

For electronics and home appliance retailers, technologies such as augmented reality to provide a simulated gadget experience are becoming mainstream. They also focus on better after-sales service, same-day delivery, and human touch, if customers have any issues.

In the food and beverage industry, which has been hit hard by covid, brands have diversified their offerings and partnered with food aggregators to provide online delivery.

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