Description

This report provides comprehensive and current information and analysis of the in-store experiential retailing market including in-store experiential retailing market size, anticipated market forecast, relevant market segmentation, and industry trends for the in-store experiential retailing market in the US.

Current market landscape

Consumers’ relationship with brick and mortar stores has changed in light of the COVID-19 pandemic, and that’s putting it mildly. They aren’t frequenting stores as much, opting instead for the more convenient – and safer – online option. If they do go to stores, it’s primarily for a functional reason like saving time or money, and they want to get in and out quickly.

Retail experential marketing and key industry trends

  • Physical retail is transforming again, but not dying Modern retail concepts will emerge
    Digitization will more closely bind physical and digital retail together There is nothing “normal” about the current state of retail, and current shopping behaviors do not define its future. Fears about contracting COVID-19 have caused consumers to currently avoid and/or limit time in physical stores out of fear of contracting the virus. Financial hardships amid a down economy are causing them to constrict spending and prioritize essentials. This will change over the long haul to become more like pre-pandemic times as the state of the pandemic and economy improve and eventually stabilize. For now, physical retailers need to prioritize in-store safety of customers and employees, and look for ways to offer digital alternatives and other conveniences to shoppers wary about the in-store experience.
  • Modern retail concepts will emerge
    Retailers were already reenvisioning the purpose of the store before COVID-19 caused them to accelerate efforts. While not all retailers will endure the effects of the pandemic, others will thrive and open more stores. Looking ahead, next-gen store formats will mark the landscape, including modernized versions of shops in shops, smaller formats, showrooms and dark stores. In many cases, in-store retailing will entail a stronger community look and feel. Reinvigorated atmospheres will invite customers to come back in to rediscover a fresh approach to retail that will include modern technologies that add convenience rather than friction.
  • Digitization will more closely bind physical and digital retail together
    The pandemic has underscored the importance of the online channel, and the need for retailers to build up their ecommerce operations. The landscape in the next normal will mandate that businesses take a holistic approach to retailing rather than view channels in silos. As more consumers shop using multiple channels, physical retailers need to more consciously think about how to translate the in-store experience to the digital channel so the consumer can shop how they choose to. Brick and mortar retail will also incorporate digital technologies to make the shopping experience more seamless and experiential with contactless tech and mobile payment options leading the way.

Future market trends in in-store experiential retailing

On the other side of the pandemic, consumers will cautiously return to stores and will continue to look for cleanliness cues to make them feel safe. Forced adaptation will mean the brick and mortar retail landscape will emerge to be leaner, include next-gen store concepts, small-footprint locations and even dark stores. Technology will shape the future of the store, and help to streamline and improve the supply chain, providing better inventory visibility. Consumer-facing tech such as click and collect options and cashierless/contactless tech and payment options will streamline in-store transactions while modernized store concepts and formats will make physical retail more inviting, fun and experiential again.

Read on to discover more about the in-store experiential retailing consumer market, read our Gen Z Online Shopping Habits – US – 2022, or take a look at our other Retail research reports.

Quickly understand experiential retailing

  • The impact of COVID-19 on the retail industry, and specifically consumer behavior related to in-store shopping.
  • How brick and mortar retailers will adjust to the changing role of value.
  • Key drivers of in-store shopping now, and in the future.
  • Types of in-store shopping experiences that consumers favor.
  • Types of emerging technologies that consumers are interested in.

Covered in this report

Brands featured: Foot Locker, Nike, UGG, 7-Eleven, Airbnb, Target, Nordstrom, Tonal, Walmart, Best Buy, Bed Bath and Beyond, Lululemon, iPhone, iPad, Apple Watch, AirPods, Amazon, David’s Bridal.

Expert analysis from a specialist in experiential retail design

Written by Diana Smith, a leading analyst in the Retail sector, her extensive knowledge delivers in-depth commentary and analysis of experiential retailing trends to highlight current trends and add expert context to the numbers.

The in-store shopping experience has been forever changed. Moving forward, next-generation brick and mortar retail experiences will be shaped by digitally enabled technologies that will make the shopping experience more efficient and inviting. Modern retail concepts will emerge and entail increased emphasis on cleanliness, atmosphere and community, and this in turn will give consumers a reason to want to break away from their computers and make physical stores a destination again.

Diana Smith
Associate Director of Retail

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Definition
    • COVID-19: US context
    • Economic and other assumptions
  2. Executive Summary

    • Top takeaways
    • Market overview
      • Figure 1: Total US retail sales and fan chart forecast, including ecommerce, at current prices, 2015-25
      • Figure 2: Short-, medium- and long-term impact of COVID-19 on retail, March 2021
    • Opportunities and Challenges
    • Follow the consumers’ lead and use a phased approach to the return of physical retail
    • Evolve the role of the store
    • Reimagine how physical and digital retail work together through tech
    • Attract consumers to stores through value focus
  3. The Market – Key Takeaways

    • Retail industry, and stores specifically, start the uphill battle toward recovery
    • Volatile economy causes consumers to spend less and try to save more
    • Population trends serve as leading indicators for retail’s future
    • Brick and mortar retailers must plan for the future in phases
  4. Impact of COVID-19 on Retail

      • Figure 3: Short-, medium- and long-term impact of COVID-19 on retail, March 2021
    • Lockdown
    • Reemergence
    • Recovery
    • Learnings from the last recession
  5. Market Size and Forecast

    • The total picture shows slow recovery ahead
      • Figure 4: Total US retail sales and fan chart forecast, including ecommerce, at current prices, 2015-25
      • Figure 5: Total US retail sales and forecast, including ecommerce, at current prices, 2015-25
    • The “eCommerce effect” helps total retail, but impedes store growth
      • Figure 6: Total US retail ecommerce sales and fan chart forecast, at current prices, 2015-25
      • Figure 7: Total US retail ecommerce sales and forecast, at current prices, 2015-25
    • Maintaining a holistic approach to retailing key for industry’s future revival
      • Figure 8: Total US retail sales (excluding ecommerce) and fan chart forecast, at current prices, 2015-25
  6. Market Factors

    • Economic factors
    • Majority of adults are just making ends meet, further straining nonessential categories
      • Figure 9: Financial health, by household income, January 28-February 10, 2021
      • Figure 10: Disposable Personal Income change from previous period, 2020
    • Consumer confidence and unemployment
      • Figure 11: Consumer confidence and unemployment, 2020-January 2021
    • Consumer Price Index
      • Figure 12: Consumer Price Index change from previous period, past 12 months, 2020-January 2021
    • Population dynamics
    • Youth will propel multichannel shopping
      • Figure 13: Population by generation, 2016-26
    • Youngest generations are the most diverse
      • Figure 14: Distribution of generations by race, 2021
      • Figure 15: Distribution of generations by Hispanic origin, 2021
  7. In-store Retail Opportunities

    • Look toward experiences that are channel-agnostic
    • Transform physical spaces through digital advancements
    • Create alliances and partnerships to offer more services, convenience
    • Bring value to the store
  8. Companies and Brands – Key Takeaways

    • When one door closes, another opens
    • “Store of the future” concepts emerge
    • Stores aren’t just for selling “stuff”
    • Customer service from a distance
  9. Competitive Strategies

    • Closing and opening more stores
    • Reenvisioning store formats
    • Capturing local community essence in-store
      • Figure 16: Nike Unite store concept
      • Figure 17: UGG flagship store, New York City
      • Figure 18: 7-Eleven Evolution store, dallas
    • Shops-in-shops
      • Figure 19: Prototypes for Target Ulta Beauty and Apple mini-stores
    • Pop-ups, small stores and showrooms
      • Figure 20: Nordstrom NYC Black Founders pop-up
    • Identifying priorities for omnichannel investments
    • Pivoting to add services
    • Transforming stores into fulfillment centers and digital hubs
    • Improving inventory management
    • Maintaining customer connections, even if they are “socially distant”
      • Figure 21: Lululemon email from Lincoln Park location in Chicago
  10. The Consumer – Key Takeaways

    • Multichannel shopping slows down amid pandemic; will pick up again
    • Operations matter in the COVID-19 era
    • Back to the basics
    • Reimagining what a store experience means…again
    • Transforming physical places with digital technologies
  11. Shopping Method by Category

    • Consumers are prioritizing essential items
      • Figure 22: Products shopped for, March 2020 and December 2020
    • Reliance on digital leads to temporary declines in multichannel shopping
      • Figure 23: Multichannel shopping – by item, before and amid COVID-19, December 2020
    • Online gains achieved across categories
      • Figure 24: Where purchases occurred – by channel, by item, before and amid COVID-19, December 2020
    • Store for buying, online for searching is the norm, but exceptions exist
      • Figure 25: Method of shopping, select categories, December 2020
  12. Shopping Shifts due to COVID-19: Now and Later

    • What’s happening now
    • Consumers are favoring the virtual store over the physical store
      • Figure 26: In-store shopping incidence since COVID-19, by generation, December 2020
      • Figure 27: Percent of total online shopping, December 2020
    • What to expect in the future
    • A new normal for the in-store shopping experience
      • Figure 28: In-store shopping expectations once COVID-19 is no longer a threat, December 2020
    • Safety and cleanliness is universally important, especially to women and seniors
      • Figure 29: Select in-store shopping expectations once COVID-19 is no longer a threat, by gender, December 2020
      • Figure 30: In-store shopping expectations once COVID-19 is no longer a threat, by generation, December 2020
  13. In-store Shopping Drivers: Now and Later

    • What’s happening now
    • Things are looking up
      • Figure 31: Comfort level with various activities amid COVID-19, January 28-February 10, 2021
      • Figure 32: Important factors for shopping in-store during COVID-19, December 2020
    • Millennials and parents gravitate toward appointment-based shopping
      • Figure 33: Important factors for shopping in-store during COVID-19, by generation and parental status, December 2020
    • What to expect in the future
    • The basics will still apply
      • Figure 34: Factors that drive channel choice, December 2020
    • Men and women are driven to shop in-store for different reasons
      • Figure 35: Factors that drive channel choice – Index versus all, by generation, December 2020
    • Younger shoppers like the hands-on and in real life aspects of shopping in stores
      • Figure 36: Factors that drive channel choice – Index versus all, by generation, December 2020
  14. Favored Types of In-Store Experiences

    • Consumers are craving community connections
      • Figure 37: Favored types of in-store experiences, December 2020
    • Generation Z and Millennials expect more than function from a store experience
      • Figure 38: Favored types of in-store experiences, by generation, December 2020
  15. Awareness and Usage of Emerging Technologies

    • Omnichannel evolution means continued changes for the store
      • Figure 39: Awareness and usage of emerging technologies, December 2020
    • Younger generations are leading adopters and want it all
      • Figure 40: Usage and interest of emerging technologies – index versus all, by generation, December 2020
    • A closer look at select technologies
    • Cashierless/contactless tech
    • Augmented and virtual reality
    • Digital screens
    • Fit technology
    • Wayfinding tech
  16. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Forecast methodology
    • Consumer survey data
    • Abbreviations and terms
    • Abbreviations
    • Terms
  17. Appendix – The Market

      • Figure 41: Total US retail sales and forecast, including ecommerce, at inflation-adjusted prices, 2015-25
      • Figure 42: Total US retail ecommerce sales and forecast, at inflation-adjusted prices, 2015-25
      • Source: US Census Bureau, Monthly Retail Trade Surveys/Mintel
      • Figure 44: eCommerce share of total US retail sales, 2015-25
  18. Appendix – The Consumer

      • Figure 45: Select important factors for shopping in-store during COVID-19, by generation, December 2020

About the report

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