Http://www.Theguardian.Com/media-network/media-network-blog/2014/jul/09/retail-brands-concept-store-shopping Rethinking retail: why brands are embracing the rise of the concept store

As consumer shopping habits rapidly evolve, retailers are looking to innovate beyond their four walls

General Electric is working with the New York concept store Story to help promote its own product. Photograph: Drew Innis

The rise of online shopping has sounded the death knell for many traditional bricks-and-mortar retailers. But innovative brandsare reimagining the physical store, turning to magazines and museums for inspiration and creating spaces where the virtual and physical worlds collide.

A new wave of thinking about bricks-and-mortar retail has given rise to a surge in brands experimenting with concept stores. AppleandBurberryhave been leading the pack when it comes to creating experience-focused retail for many years. But a wider range of brands is starting to experiment with concepts, and no longer just luxury ones.

General Electric, for example, is currently working with New York concept store Storyas part of an exercise to promote one of its products.

Story is built on the concept of treating retail as media, curating its merchandise every month, like a magazine would with content, and getting a brand to sponsor it. This month's theme is "cool" and the products on sale in the store – clothes, jewellery and gadgets – reflect that.

GE, which has partnered with invention platform Quirky for the curation, does not take a revenue share from product sales, but is using the store as a platform to promote a smartphone-controlled air conditioning unit. "A product tells a much bigger story than just a transaction and in Story every item has a long-tail narrative attached to it. That is really what we want to do. Not to enhance every transaction and sell more, but to tell the story behind our work through product, commerce and experience," explains Sam Olstein, global director of innovation at GE.

Nestlé, on the other hand, aims to combine branding with direct-to-customer sales through its KitKat concept store in Japan.

The Chocolatory, located in a Tokyo shopping mall, sells exclusive and unique products, such as Sublime Bitter and Special Sakura Green Tea. Stewart Dryburgh, Nestlé's global marketing head for KitKat , explains that creating unique products taps into the Japanese custom of buying thoughtful gifts for people, helping KitKat build an emotional connection with the consumer and reinforcing positive sentiment around the brand.

The store has attracted a lot of social media attention and requests for versions in other markets. "We did not open the store on a whim, but it is still quite early in evolution and we are doing a lot of testing and learning to understand how best we leverage it in other markets," says Dryburgh.

While e-commerce is rapidly growing, particularly on mobile – eMarketer forecasts worldwide business-to-consumer e-commerce sales will increase by 20.1% this year to reach $1.5tn– not all commerce will shift online. Theclicks-versus-bricks debate is wearing thin as more retailers embrace an omni-channel retail. And with eBay and Amazon having both experimented with physical retail concepts, and Google also reportedly planning a museum-style concept store in New York, even the most successful digital brands recognise the importance of physical retail.

People still love to shop as a social occasion, family day out or even holiday, but there is a crucial distinction between the act of shopping and where a purchase is made, says David Womack, executive creative director at R/GA. "Retail serves a number of complex functions beyond moving merchandise. The retail experience is an incredible part of the consideration process, it is just where they do transactions that will shift," he says.

A concept store that leverages technology effectively can close the loop between digital and physical, overcoming the problem of attributing online marketing to offline sales. "As we are able to have single view of the customer from digital to retail, this will change the nature of the [physical] retail experience. Stores will become more like galleries," Womack adds.

Tescohas been exploringomni-channel retail to power a new kind of shopping experience. In South Korea, Tesco created a touchscreen storefront in a subway, enabling commuters to buy groceries while waiting for their train.

"Our focus is on helping our customers shop whenever, however and wherever they chose to," says Paul Wilkinson, head of technology research at Tesco Labs.

"The proliferation of channels, devices and services means that people can shop in a huge variety of ways and they expect a seamlessly connected experience. We are building our business around that," he says.

One of the key challenges retailers face with concept stores is ensuring they add value. They are a big investment and if the technology falters, or the space has no buzz, it could create negative brand perception.

Logistics will also prove to be another battlefield. With delivery times speeding up – Amazon potentially will deploy delivery drones – bricks-and-mortar retailers will no longer be able to depend on instant gratificationto give them the edge over their online competitors.

For Rachel Shechtman, founder of Story, the future of retail lies in experience, community, differentiation and mass customisation.

"We are barely scratching the surface, and while bricks-and-mortar is often referred to as dying, I think it will only give way to a new frontier with endless and untapped potential, light years beyond looking at sales per square foot," she says.

http://www.theguardian.com/sustainable-business/behavioural-insights/targeting-human-emotions-marketing-sustainability