‘Consumers are now looking for experiences beyond simple transactions’

Back in October, John Lewis opened the doors to its revamped Oxford Street, down the road from Future Stores’ debut flagship showcasing immersive retail media. Just the other week, shoe brand LØCI opened its first physical store.

One could say that 2024 was the year of placing big bets on physical retail. Now, I’m not a betting person, but if I was, it’s a bet I’d be confident in making.

Despite years of store closures and loved brands leaving the high street, in-store remains the dominant channel in UK retail, accounting for 71.8% of all retail sales in 2023. Even in the US, research found a 53% increase in consumers who planned to shop in stores for Christmas compared to the previous year.

If you’d toldd me four years ago that physical retail would soon be top of the list for shoppers, I probably wouldn’t have believed you. A pandemic, an explosion in ecommerce and degenerating high streets all seemed to point in one direction.

But consumer behaviour can often navigate us towards entirely different destinations. In an era of digital expansion and emerging generations longing for connection, consumers are now looking for experiences beyond simple transactions – they want spaces that offer entertainment, community and personal connections.

There is a shift towards ‘entertainment’ being the most important element of a shopping experience for younger consumers, especially 18 to 24-year-olds, who increasingly seek spaces that offer more than just products but an experience.

This has presented retail brands with an exciting question to consider: what if a store could be more than a store? What if it could be an anchor for the community and fans?

It’s a question many have started to answer.

In an era dominated by digital music, streaming services, and virtual spaces for connection, the introduction of a new literary floor in the HMV store represents a significant evolution in how pop culture fans engage with their interests. This addition, which blends physical media, music and literature, offers a refreshing counterpoint to the digital world, catering to the growing demand for authentic, face-to-face experiences.

It is a destination for timeless stories and diverse cultural narratives.

While the digital world floods us with information and misinformation, books stand as trusted, tangible sources of knowledge

Literary spaces on the high street serve as guardians of traditional storytelling, offering carefully curated collections of well-researched books.

The beauty sector, led by a new wave of beauty players, is spearheading a complete overhaul of what a physical space can be. Last year, LookFantastic, the digital-first disruptor opened the doors to its first brick-and-mortar beauty store. But it’s more than just a retail space – it represents the future of beauty retail, where community, experience, and personalisation take centre-stage.

The store’s innovative approach with areas like the ‘spotlight stage’ providing an ever-evolving space for immersive pop-ups and experiential brand takeovers sets it apart from traditional beauty halls. It’s a place where beauty enthusiasts can not only shop but also learn, engage, and connect.

Spaces that prioritise this discovery and play before purchase will be able to respond to shifting spending patterns toward experiences rather than material goods. As we begin a new year, it’s an opportunity for brands and developers to really consider what ‘space’ can entail.

Whether you’re experimenting with innovative technologies to transform discovery and connectivity, or partnering with local businesses and civic organisations to create community hubs in a thriving local economy, these approaches should rethink what the experience between four walls should be for the consumer of tomorrow.

While convenience may be king, community and connection cannot be understated and undervalued because a retail revolution is arising, and the brands that can open their doors and put the fun in functional, will reap the rewards.