Experiential retail economy to reach tipping point in 2025
The retail industry’s shift towards experiences rather than products will accelerate over the next few years and approach ‘tipping point’ in 2025, with customers expecting to see more creative, and health and games oriented in-store activities.
This is according to Westfield’s new report, How We Shop: The Next Decade, which reveals the needs and wants of 15,700 consumers across ten countries in Europe including France, the UK, Spain, Germany, Austria, Sweden, Poland, the Czech Republic, Italy and the Netherlands.
“The important role of the physical store is changing and retailers need to enter another decade of reinvention to remain relevant. Retailers that lead on sustainability, devote more space to experience, provide free-range browsing online and in store, deliver precise product recommendations based on science and think local will reap the benefits,” said Myf Ryan, CMO Europe at Unibail-Rodamco-Westfield.
The rise of the experience economy
The shopping centre owner predicts that the entire retail model will turn on its head by 2025, as nearly 60% of consumers expect more than half of retail space to be devoted to experience rather than product by this time.
In fact, 81% of consumers globally are willing to pay more for experiences that elevate shopping. Nearly half of Spanish, French and Czech shoppers want more creative spaces, from studios where you can create your own podcasts to video games, while nearly 30% of city shoppers would like to see more stores with dedicated co-working spaces.
At the same time, retailers will have to be smart about the space that is dedicated to products, as 56% of shoppers begin to show frustration over highly curated edits. Due to inaccurate retail recommendations, nearly 60% want to browse full ranges, triggering a movement of anti-personalisation.
The report said omnichannel brands that use their online space to showcase the full range and their physical stores to surprise and delight could become tomorrow’s star performers. Above all, the figures demonstrate the critical need to truly understand customers’ needs and desires.
Customer expectations will continue to accelerate retailers’ transition towards more sustainable models, and this will culminate in truly self-sufficient stores. Additionally, 71% of shoppers want brands to make products in-store whilst they wait, making the case for factory stores.
The self-sufficient approach will extend to include allotments on retail roofs to grow ingredients, 4D-printing factories and studios allowing design teams to create product on demand. Shoppers will push for a ban on single-use plastics in Austria, Spain, Germany, the UK and Poland, and expect zero-waste packaging from eco-conscious brands. There will be a rise in points programmes that reward customers for their positive eco-friendly practices.
Rental retail will continue to grow amongst European consumers, with cars, scooters, home amenities and fashion and beauty emerging as popular potential rental items.
DNA testing and communities
Personal consultations are also predicted to grow. Consumers’ search for the right products could see about 31% ready to hand over their DNA information in order to receive products better suited for them, the study found.
Finally, Westfield said retail destinations will morph into their surrounding environments to connect more with their local community. Indeed, 70% of Europeans said they want the malls of the future to reflect the individuals and communities in an area.
This will evolve into prioritising home-grown brands over well-known ones. 31% of consumers would like more ‘locally-flavoured’ community-feel experiences, such as organic produce fairs and book clubs. There are also signs of rising nostalgia, as consumers look for physical places to connect in an increasingly digital world.
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