Specialists see innovation and pop-up shops


A shopper browsing used clothing at a pop-up swap event in Singapore.

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LONDON – The future of physical stores has been challenged by the coronavirus pandemic, but experts believe the key to survival will be reinvention.

For some time now, retailers have been trying to attract customers by creating in-store experiences. Now, however, they need to get creative as shopping habits change and customers become more demanding.

Online shopping has been booming since the pandemic began. In the UK alone, internet sales rose from under 20% to over 32% in just three months at the start of the first Covid-induced lockdown. And experts expect the convenience of buying online means consumers will continue this habit even after the pandemic.

According to accounting firm PwC, nearly 50 stores closed every day in the UK in 2020.

Both trends show how important it is for retailers to get their physical presence right.

Kristina Rogers, Ernest Young’s global consumer leader, told CNBC in March that there is “a real redefinition” in the way retailers use their physical spaces.

“It’s no longer just an exchange,” she said, adding that retailers need to understand who their customers are and what they want.

Customers are browsing clothes at the Pangaia pop-up in Selfridges department store in London on April 12, 2021 as coronavirus restrictions are eased.

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She highlighted how Target, one of the largest retailers in the US, chose to have more space in their stores for Apple products. That way, customers interested in Apple devices can check them out in Target when shopping for other things. This is also handy for current Apple users who can merge two trips into one.

“They’re building a ‘mini mall’ in their shop,” she said.

But not every retailer has such a large area to work with. In fact, some experts believe that successful businesses of the future could be those that keep offering new things regardless of their size.

“There will undoubtedly be fewer physical stores going forward,” Matt Clark, managing director of consulting firm AlixPartners, told CNBC’s Street Signs Europe in March. “But the remaining stores need to offer an even bigger experience, additional services and just the ability to purchase products.”

One way for retailers to stand out is to focus more on pop-up stores. These are spaces that are temporarily open to showcase a particular line or product and that have become increasingly popular in recent years.

Stella McCartney Store on Bond Street in November 2020.

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“One of the most important ways for pop-up shops is to create new opportunities for exploration. It’s not about a consumer walking into a Ralph Lauren store that is the same today as it was 10 or 20 years ago,” says Alex Cohen. A commercial real estate expert at Compass told CNBC.

Some well-known brands have already searched for pop-ups to attract more customers. British fashion designer Stella McCartney is showcasing a variety of local businesses in her flagship store on Old Bond Street in London to celebrate the lifting of restrictions on retailers in the UK. Guess is about to open its first pop-up store in Germany for activewear.

Pop-up areas allow retailers to create something “really fresh” while saving costs, Cohen said.

“Brands have the ability to spend a lot less, not have to commit to a long-term contract, spend less on modular installations, and do it very quickly,” he added.


In addition, this type of business promotes the idea of ​​exclusivity – a feeling that is becoming increasingly popular with many customers.

“The whole idea of ​​exclusivity is really important. The fact that a pop-up is expiring … is causing excitement among consumers. ‘Wow, if I’m not looking at this pop-up retail offer … at the In den in the next 3 months it will go away, I will never be able to see it, “he said. This adds the kind of excitement that is lacking in many traditional stores.

So it’s not just about the feeling of having an exclusive product, but also about an exclusive experience. This means that retailers can benefit from this exclusivity trend in other ways.

“In terms of exclusivity, many retailers now, either by agreement or actually, when you arrive at a store require you to be connected to a seller. You can’t surf and that creates a sense of exclusivity for better or worse,” added Cohen.


Brands are also recognizing the increasing importance of sustainability, both from a business perspective and due to growing customer awareness.

And it’s not just reflected in more “ethical” product lines, but also in what services are available in physical stores.

On its flagship in Stockholm, H & M offers services to repair old clothes and rents out some of its outfits for special occasions.

“The sustainability movement really highlights one of the core dichotomies that the fashion industry is particularly facing, but also a broader retail sector,” said Clark of AlixPartners.

“The debate between value and value: The need to really clearly define your sustainability traits, your ethical sourcing, etc, while delivering great value that is not only cheap but also great value for money which means consumer. “