It’s time to elevate in-store experiences, create next-gen brand destinations and evolve far beyond the transactional.

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What’s in Store for Brick-and-Mortar?

We’re at the beginning of the retail revolution.
The retail world is changing faster than ever. The intersecting effects of the pandemic, the climate crisis, inflation and technological advancements means we’re seeing developments across the sector. Thanks to frog’s <a href="https://www.frog.co/work/by/sector/retail">partnerships with leading retailers and consumer brands</a>, we’ve got a front row seat.
In a new report, we hone our focus to an area undergoing fascinating shifts: brick-and-mortar retail. Reimagining physical retail, we focus on the broad set of new customer needs: from seeking unique discovery experiences and on-demand convenience, to the more fundamental need for connection.
Download the new frog report: <a href="https://go.frog.co/the-future-of-retail-report" target="_blank" rel="noopener">The Future of Retail: What’s in Store for Brick-and-Mortar?</a>
Via six transformative archetypes, we explore new ways to connect with customers and evolve beyond transactions:
<ol style="padding-top: 40px; font-size: 18px;">
<li>The Showroom: Give customers access to experts by putting “show and tell” front and center.</li>
<li>The Playground: Provide a space for imagination and exploration to take over.</li>
<li>The Clubhouse: Drive loyalty by reimagining the store as a hub for like-minded customers to connect.</li>
<li>The Oasis: Create a refuge from traditional shopping and daily stressors.</li>
<li>The Studio: Unlock the ability of customers to co-create, experiment and customize.</li>
<li>The Garden: Get (and give) stores new life as places to repair, restore and recycle goods in line with brand and customer values.</li>
</ol>
Read the report to learn more about each archetype, then take the <a href="https://form.typeform.com/to/ywzsEGfE">Store Archetypes of the Future</a> quiz to find out which is right for your brand.
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Make space for the untapped potential of brick-and-mortar. 
Thanks to the rise of ecommerce, the humble store (with its origins stretching back to antiquity) saw some of its most tumultuous years. The proclamation, “the store is dead!” grew louder. However, signs point not towards death but towards an opportunity for metamorphosis. 
While ecommerce’s share of retail is expected to continue to grow in the coming years, it currently represents <a href="https://www.statista.com/statistics/187439/share-of-e-commerce-sales-in-total-us-retail-sales-in-2010/">less than 15% of the entire U.S. retail market</a>. The metaverse and other emerging channels are hot topics, yet linger at a fraction of a percentage when it comes to market share. This means stores—as unglamorous as they have become for many brands—are still where the battle for customers’ money is won (or lost). Physical retail provides a uniquely tactile opportunity for brands to differentiate and <a href="https://fro.gd/3DSLd4i">connect with customers</a>. Now’s the time to create in-person synergy and invest in the store of the future. 
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Brick-and-mortar in numbers
<ul style="padding-top: 40px; font-size: 18px;">
<li>72% of digital shoppers said they consider in-store experience the most important channel when making a purchase. (<a href="https://www.invespcro.com/blog/state-of-omnichannel-shopping/" target="_blank" rel="noopener">Invesp</a>, 2022)</li>
<li>82% of consumers are more likely to return if they have a positive in-store experience, and 64% said there’s an increased likeliness they&#8217;d spend more. (<a href="https://www.resonai.com/blog/retail-foot-traffic-trends" target="_blank" rel="noopener">Raydiant</a>, 2021)</li>
<li>+30% is the increase in lifetime value of customers who buy both in-store and online, as opposed to those who only use one channel. (<a href="https://www.invespcro.com/blog/state-of-omnichannel-shopping/" target="_blank" rel="noopener">Invesp</a>, 2022)</li>
</ul>
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<h2>So, what’s next for physical retail?</h2>
New measures of success
Store experience will be assessed by the customer lifetime value created across channels, visits and multiple retail revenue streams.
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<table width="100%">
<tbody>
<tr>
<td style="border: 1px solid black; padding: 5px; text-align: center;" valign="top" width="50%">From&#8230;</td>
<td style="border: 1px solid black; padding: 5px; text-align: center;" valign="top" width="50%">To&#8230;</td>
</tr>
<tr>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">Transactions. Store as sales and fulfillment channel.</td>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">Relationships. Store as stage for brand experiences and services.</td>
</tr>
<tr>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">One-Way. Store as a site for brands to control the conversation with individuals.</td>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">Multi-Directional. Store as a place where brands invite participation and cocreation by communities.</td>
</tr>
<tr>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">Closed Off. Store as a single, controlled branded experience with strict rules of engagement.</td>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">Open and Collaborative. Store as an open platform, enabling collaboration amongst unique brands, products and services.</td>
</tr>
<tr>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">Fixed. Store as a permanent location, pre-planned with seasonal program.</td>
<td style="border: 1px solid black; padding: 5px;" valign="top" width="50%">Dynamic. Store as an ever-evolving place to experiment as well as measure, learn and respond to trends.</td>
</tr>
</tbody>
</table>

The decline of the store as solely for shopping
Throughout history, shopping has been synonymous with physical stores, but that link has been disrupted. We’ve seen a decade-long trend of retailers mirroring Amazon tactics: optimizing for efficiency, reducing physical footprints, slimming staff and cutting brand budgets. The ongoing effects of the COVID-19 pandemic and the cost-of-living crisis have contributed to the high numbers of stores closing globally.
<ul style="padding-top: 40px; font-size: 18px;">
<li>50,000 retail stores are projected to close in the U.S. over the next five years. (<a href="https://www.cnbc.com/2022/04/13/ubs-50000-retail-store-closures-in-us-by-2026-after-pandemic-pause.html" target="_blank" rel="noopener">CNBC</a>, 2022)</li>
<li>There has been an 11% decline in the average number of retail building leases from 2019 to 2022. (<a href="https://leasequery.com/2022-lease-benchmark-report/" target="_blank" rel="noopener">LeaseQuery</a>, 2022)</li>
</ul>
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The rise of the store as experience 
To win in this altered landscape, retailers should avoid obsessing over the transactional, efficiency-driven game. Instead, they should master the <a href="https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2021/04/07/winning-in-the-experience-economy/" target="_blank" rel="noopener">experience economy</a>, for which stores are the prime stage. Retailers need to unlearn what they know about the optimized store and adapt to discover and deliver new jobs-to-be-done better than any of their competitors.
<ul style="padding-top: 40px; font-size: 18px;">
<li>32% of brands expect to establish or expand their use of pop-up and in-person experiences in the next year. (<a href="https://www.shopify.com/retail/omnichannel-trends" target="_blank" rel="noopener">Shopify</a>, 2021)</li>
<li>Brick-and-mortar sales are currently growing at a faster pace than e-commerce sales. (<a href="https://www.wsj.com/articles/retail-real-estate-is-enjoying-its-biggest-revival-in-years-11664875802" target="_blank" rel="noopener">WSJ</a>, 2022)</li>
<li>47% of consumers consider local presence a significant factor when choosing which brands to shop from. (<a href="https://www.shopify.com/retail/omnichannel-trends" target="_blank" rel="noopener">Shopify</a>, 2021)</li>
</ul>
Shopping around for retail innovation? Download <a href="https://go.frog.co/the-future-of-retail-report" target="_blank" rel="noopener">The Future of Retail: What’s in Store for Brick-and-Mortar?</a>

Alex D’Agostino

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