Developing store formats to meet Web 2.0 challenge

The advent of Web 2.0, wireless broadband and developments within mobile technology are changing the traditional retail store format. This is the principal finding of a report published last month by trend forecasting group Future Laboratory.

Its annual Retail Futures report discusses the idea of ‘immersive retailing’ and suggests that if retailers do not merge their on- and off-line offers successfully, they risk losing an even greater share to the on-line retail market.

So how is the march of technology affecting retail store design? According to the report, a host of global retail groups is busy integrating technology into traditional consumption channels. US retail developer Gordon Group Holdings has created Epicenter, a concept where consumers can browse and purchase items for home delivery using a ‘buypod’ hand-held wireless device.

Elsewhere, brands inclu- ding Polo Ralph Lauren and Porsche are using interactive devices within shop windows to attract customers even while stores are closed. Customers can make enquiries about products they see by scanning barcodes using their mobile phones.

However, as Dalziel & Pow creative director David Dalziel points out, filling a store with hi-tech features and interactive terminals is not appropriate for all types of retail. ‘Anyone popping into Topshop is not going to bother with a browsing post. It is difficult for, say, fashion retailers to make that leap between tangible and intangible stock.’ Dalziel & Pow is currently working on a £40m retail overhaul for fashion retailer Next (DW 18 January).

Technology is driving the development of traditional store formats in the areas of electrical goods, computing and telecommunications. Brands such as Vodafone have been quick to update store formats using technology that emphasises product advances, while Nokia and Sony Ericsson are planning major flagship stores that will offer a media-rich experience.

According to Jim Thompson, director of 20/20, new technology in-store has advantages for retailers where customers want to experience the product. ‘It allows them to update and change information more effectively and at lower cost in the long term. It can be really effective for music, books and film, but it is essential that the associated product is easy to purchase from the interactive point.’

Convenience is still a factor driving the design of the bricks-and-mortar retail store. Later this month, Dalziel & Pow will unveil its ‘future of fashion retailing’ concept at the World Retail Congress in Barcelona. Based on the idea of a completely till-free retail site, customers will be able to make ‘on-the-move’ payments to members of staff anywhere in the store, making for a more efficient use of retail space.

For Tom Roope, a director at Tomato, the use of technology in retail needs to address a particular function. This can be information-based, enhancing the product experience, or theatrical, enhancing the consumption experience. ‘It’s better to have a combination of interactive and information that fits into the architecture and could perhaps double up as signs,’ he says.

One thing is certain: with an estimated 15 million users in the UK having access to the Internet at any time and in any place this year, retailers will need to respond.


EMERGING RETAIL TECHNOLOGY
• Radio-frequency identification – used in shelf replenishment and management of stock levels
• Embedded labelling – scanned by mobiles to receive information on products
• Self-checkouts
• Point-of-sale video advertising
Source: Retail Futures, by the Future Laboratory, published February 2007