Retail future is experiences, not stuff

Supercheap is well aware of online shopping’s impact, says Mortimer

Fitness classes, pit stops, grandstand-style seating, workshops and play centres are being touted as the future of retail, as physical stores evolve to combat the online shopping threat.

Shoppers can buy whatever they want with a tap of their smartphone, so bricks and mortar retailers have to offer more to compete, retail experts say.

Queensland University of Technology associate professor and retail expert Gary Mortimer says retailers are evolving and have begun offering experiences relevant to their target audience.

He said this trend can be seen in the simple example of sports apparel brand Lululemon, which is offering fitness and yoga classes at its stores, or on a grander scale, such as the new offering from ASX-listed Supercheap Auto.

In June, the car accessories retailer opened a pilot customer experience centre at Penrith, in western Sydney, that will form the basis of its new generation of stores.

At the centre of the big box store is grandstand-style seating overlooking a demonstration floor where staff show customers how to change wiper blades, tyres and other general vehicle care procedures.

There are also car clinics where customers can ask for vehicle advice, a number of displays, including a dream garage set-up, digital product search screens and a pit stop where customers can help themselves to coffee and tea.

Mortimer said the store showed that Supercheap was well aware of how Amazon and the growth of online shopping will impact its sales.

“The customer experience centre has TV screens that are running motor racing, because that’s an important area of interest for their customers,” he said.

“Through analysis and research they have worked out what is important to the customer.”

UBS analyst Ben Gilbert said retailers were more than ever shaping their offerings based on customer data and analytics.

He said as a result, more retailers were cutting back on floor space dedicated purely to stock and making way for experiences.

Mortimer said shopping centres in Europe, the US and Dubai were also pushing the envelope beyond what is seen in Australia’s malls.

“We are seeing shopping centres putting bowling greens in … with amusement parks, stages and live bands,” Mr Mortimer said.

“We haven’t seen that in Australia yet but we do see the blending of shopping centres with transportation hubs, medical services, theatres and restaurants.”

Retailers, in particular department stores including Myer, are adding children’s play centres, barber shops and concierge desks to improve convenience for customers.

Even convenience stores are trying to become more convenient: when retailer Caltex opened its “The Foodary” concept service station store in Sydney in early 2017, it included parcel pick-up and daily dry cleaning services.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.