Why bricks-and-mortar is still critical in China

Store concept from smartphone giant Honor, located on the historic Bell Tower Street in Taiyuan, China.  From tables with minimal curves and warm table tops to hi-tech wall fixture systems with hidden power and data systems, every aspect of the experiential store is carefully considered to create a feeling of integrated futurism, according to design agency, Gensler. The technical processes that allow engineers to make repairs to Honor devices is on full display in the 360-degree glazed repair room. A social gathering space on the first floor enables community talks on a variety of subjects. Meanwhile, fitness products are displayed in a miniature “gym” space, allowing customers to simultaneously evaluate smart fitness watches, running headphones, intelligent treadmills, and then cool down with Internet of Things-enabled (IoT) fans and massage devices.  “In China, the physical retail space is becoming a critical touch point, especially for the younger demographics who crave human re-connection in the post-pandemic era,” Richard Chang, project director and retail practice area leader for Gensler Greater China, told Inside Retail. “The Life Store format… sits in between the flagship stores and their regular stores, think of it like a mini version of their flagship store.” The human touch From Chang’s perspective, physical bricks-and-mortar stores are still very much a priority for retailers. “Current clients that we are working with are still building prototypes and the rollout of physical stores is still going pretty strong,” Chang said. He believes that the physical touch point is something that is crucial to the purchasing experience in the retail sector. According to recent research from Gensler on the topic, Gen Z and Millennials crave human interaction. The pandemic and ongoing movement restrictions have made them yearn for more connection with their peers and the community. “The human touch is still a factor, and it’s only getting stronger,” Chang said. “When the younger generation go into a store, they are always looking for the social aspect, discovery, entertainment or being inspired by what they experience. So we are always mindful of these factors when we sit down with a client to design a store, for example.” According to Chang, Gensler’s approach to technology is that it must enhance the overall experience of the store. It has to be intuitive, not gimmicky, and only then will the firm consider it a value added integration of technology. The Chinese market Chang is of the opinion that the Chinese market these days is not so different from the rest of the world. Obviously, social media plays a huge role in the conversation, and customers are always looking for authenticity. “A big difference in this market is the nature of seamless payment methods such as Alipay and Wechat Pay, and that is a big factor in designing an experiential store, as you need to integrate your offerings with these systems,” said Chang. Customers are able to get personalised recommendations in store, as these systems recognise their patrons from their digital identities. This of course leads to greater sales and an overall better purchasing experience for visitors to a store, according to Chang. Interestingly, Chang mentioned that the “Made For China” mindset which is all about instilling national pride among its populace, has been dialled up recently. Anta Sports, also one of Gensler’s clients, has asked them to design a prototype “Champion store” to tap into this national pride element. The rise of RFID Gensler has been pushing radio frequency identification (RFID) tags for a while now in their store designs, and some of their clients have started utilising them to enhance the shopping experience and optimise the backend operations. In one of the shoe stores designed by Gensler, RFID tags can be scanned via a digital display, and customers will be able to select shoe sizes and so on. All this information is logged for inventory purposes and every interaction is recorded for better understanding of consumer behaviour. “From an operational point of view, retailers will be able to figure out how to rotate and refine their visual merchandising strategies, and this is a huge benefit for them.”  Moreover, when it comes to sustainability, there are even vendors for store fixtures that are using RFID tags to ensure there is an element of sustainability that is factored into the overall design process. The future is bright Gensler is continuing to remain proactive in terms of project developments in the automotive industry, and in China, they are working with several brands for upcoming retail stores. “We are also very active in the consumer goods sector, especially in the smartphone space and electronics sector,” Chang said. “The next area we want to focus on is the sustainable fixture industry, as this is something that is being dialled up in the marketplace, and we can look forward to more collaborations in the future.” In the retail space, there is a lot of potential for Gensler to get into redesigning the physical fixtures that are used in store design for sustainable long-term use. Chang feels that there is a lot of potential in this space for innovation, and with the right approach, a substantial reduction in the carbon footprint across the supply chain is possible. “We did this with an Adidas store two years ago in Seoul, and we had prototype fixtures that could be disassembled, shipped, reassembled and fitted to a variety of flagship store locations. So an extension of this concept is possible in the future,” he concluded.