Impacts To Physical Retail

The media is full of predictions of what “normal” will be, and its pretty well all guesswork.

We’ve been looking at where the successes and failures are, and how this impacts physical Retail, which is where the clever brands, who continue to invest will win.

An example of potential failure

Pret, which made sales of £710m and pre-tax profits of £48.8m in the UK last year, is a good example of potential failure. It’s strategy to date has consisted of opening as many shops as possible in busy areas and selling a fairly predictable selection of products over the counter.

It could learn a thing or two from Sweetgreen, the American salad start-up that has been eating its lunch in New York. Sweetgreen serves salads with modish names such as Harvest Bowls and Kale Caesars to affluent young things interested in healthy food, playing up the sourcing of its ingredients, while modelling itself as a tech company — co-founder Jonathan Neman has called it a “food platform”.

While Pret has been content to roll out stores and sell to customers who walk in off the street, Sweetgreen has built an app that had amassed 1.5 million users as of January, accounting for 55% of its sale. This is a great example of a business pivoting to the consumers needs.

Interestingly Pret has responded by offering a subscription service, Netflix style, where you can enjoy up to 5 coffees a day by paying a fixed monthly fee. This could be a model we see developing everywhere, a good way to ensure customer loyalty – the underlying problem is to get footfall back in central office locations though.

Waitrose research found that more than three quarters of people (77%)regularly order household goods online now, which is 61% more than last year.

There’s now huge importance to providing impactful touchpoints, both digitally and physically in store.

UK Shoppers who Regularly do Online Grocery Shopping
Food delivery

They can order the salad they want and pay for it in advance, picking it up from a store with minimal fuss. Or they can have it delivered to an “outpost” (or as we would say “ Bespoke Merchandising Display) in the foyer of their office — a device Pret is planning to pinch. Or they can log into Uber Eats and have it couriered over.

In store displays

Positionning  in store displays for impulse purchases will be key, as visitors to the stores will be on a collect basis, rather than browse and purchase. Look at the footflow, and routing around your store, and make any add-on purchases easy to make, we’re all pretty cashless now, so payment method and management needs to evolve too.

cashless payments

Sweetgreen knows who its customers are; it has their data and understands how to target them with offers. It makes Pret looks positively Victorian, and it reminds you how complacent a company can become when its existing model throws off cash.

Your business model and Retail

Look at your model and don’t be afraid to radically change your approach. Its clear that there is still a need for physical Retail, as figures show increases in city centre footfall are increasing slowly, whereas Retail Parks are almost back to previous year on year figures – this is probably down to people feeling more Covid comfortable in the bigger store formats, with outside parking and a general safer feel to the shopping experience.

As Impulse returns to more positive conversations about upcoming promotional campaigns with Brands and Retailers – its clear that we are instrumental in POS strategy, and the science involved in the solutions we offer. Materials, brand communication, interactivity, and Sustainability form the basis of the briefs.

Consult us on your next project, contact Mark McKeown here for more information.


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