On one hand, we see brands like GymBeam or Alza that grew rapidly through online sales but are now opening stores to be closer to customers and build relationships through services that customers perceive as valuable.
On the other hand, there are local and established retailers like Albi, ExiSport, or Sconto, that are trying to embrace the new role for long-standing stores. Their competition is growing through digital channels like e-commerce and marketplaces, where they compete on price and breadth of assortment that is hard to achieve in physical space. Moreover, at a certain scale and number of stores, it becomes an organizational challenge to create a unique shopping experience or additional services.
In both cases, brick-and-mortar stores represent a significant investment or cost. From conversations with our clients, it's clear that many brands don't know how to holistically approach the role of stores beyond products on shelves. They simply cannot envision other ways they could be commercially meaningful.
Brands most frequently approach us with the following challenges:
- They don't understand why customers come to brick-and-mortar stores: what quantity and selection of goods they expect there, what services and advice they need, where the store is placed at the customer's shopping journey (i.e., how they shop before and after visiting the store), and therefore cannot determine what the key conversion point is (which may also be online).
- How to ensure quality and consistency of service in stores: what should be the roles of employees? What information and digital tools do they need for specialized service?
- How to identify customers in stores: how to connect them with their digital purchases through email or loyalty programs. How to design an omnichannel customer journey so that digital and physical channels complement each other rather than cannibalize?
- How to gain additional margin through services: what services would customers consider valuable and be willing to pay for?
Stores are still a key point of customer experience; physical space and personal contact offer value that digital channels will never be able to fully replace. However, many brands don't know how to use this potential in a way that reflects customer needs.
Therefore, we at Lighting Beetle* decided to explore this topic thoroughly. We drew from experiences from retail projects (Martinus, NAY, Optika ZITA, Dr.Max), from internal qualitative studies on the development of customer behavior and mapping global retail trends.
Store as a space for product discovery
A place where customers can get to know products discovered online and navigate themselves in options before making a final decision.
The first way is to use the store as a space where customers can gain inspiration, discover new products beyond their online algorithm, or physically verify a product that appealed to them online. The store is perceived as one of several touchpoints on the shopping journey; it's therefore important to connect it with digital behavior before visiting the store (e.g. pre-selection, what the customer has already seen and is looking for again, their preferences) as well as after visiting the store (e.g. conversion on the desired online channel). This is possible, for example, through a mobile app or loyalty program.
A store as a space for product discovery responds to the customer need "I want to find out what my options are" or "I want to find out if the product really suits me.” The goal is to help the customer orient themselves in the breadth of the offer and help them find what they're looking for or what might interest them.
In addition to the mentioned possibilities, digital kiosks in the store can also be a solution, allowing customers to better understand the parameters of a selected product and options for its configuration or customization.
Where to start?
- Conduct customer research to better understand how customers think about your product category and what services and assortment they would appreciate in the store.
- Understand what loyalty program and app content customers would consider valuable for onboarding as well as long-term use beyond one-time discounts.
- Strategically, effectively, and ethically analyze data from loyalty programs.
- Design new customer journeys and service models that motivate customers and sales assistants to actively use digital tools in the store.
- Adapt customer service to their shopping mode.
How successful brands make it work
- IKEA: supports product discovery through life themes (better sleep, sustainable living) and the IKEA Family loyalty program connects online/offline behavior through personalized services like special prices, connected shopping lists, or digital receipt archives.
- MODIVO: introduced a store built on digital kiosks, that replace traditional product displays. Customers select products digitally, enabling faster service, wider selection, and more efficient use of space.
- Sephora: provides sales assistants with mobile devices with access to customer data for personalized service.
- Nay: electronics retailer, we helped design a platform, for sales assistants that increases seller efficiency and helps the entire sales team improve conversions and earn fair compensation, thereby also increasing customer satisfaction.
Store as center for expert help
A place of personal contact with an expert who helps narrow down options and select the right solution for a specific customer.
The second way to use stores is connected with expertise, customized solutions, and specialized services that make the decision-making phase easier. This can involve advice, parameter explanation and category orientation, breaking down complex purchases, help with size or material selection, or curatorial selection.
This opportunity responds to the customer's need "I want to make sure I'm making the right decision." It involves more complex and specialized products where the customer is mostly a layperson and has trouble evaluating the correctness of a solution without additional expert information. The goal is to narrow down the customer's options, help them choose what's right for them, make a decision, and retrospectively assure them they made the right choice (this can be addressed by services related to product returns).
Customers come to stores for personal contact. Digital tools that provide sales assistants with quick access to all necessary information about products as well as the customer and their preferences can serve to ensure advisory quality.
Where to start?
- Offer services optimized for both customer experience quality and seller needs.
- Identify what advice, information, and forms of service the customer needs in the store.
- Ensure a stable level of expertise and service quality from salespeople.
- Try to keep the customer in the ecosystem after consultation and/or convert them to purchase again.
- Don't underestimate the quality of tools for salespeople - slow, complicated, and unintuitive interfaces require training and adaptation, demotivate salespeople from using them, and ultimately worsen the customer experience.
How successful brands make it work
- IKEA: offers comprehensive kitchen planning services with personalized consultations and custom designs, strengthening its role as an expert for customers.
- Optika ZITA: sells exclusively through pre-booked personal meetings, where trained opticians ensure precise eyewear selection based on diagnostics and customer personality.
- Martinus: booksellers provide expert advice through thematic tables with curatorial selection that allow customers to find suitable books.
Store as complex service center
A place where customers solve all "problems"related to the product - from installation to recycling.
The third opportunity is connected with providing services that customers can use just before or after purchase. This can involve services like variable delivery or pickup options, installation or personalization, as well as post-purchase services like easy product returns, repairs, or recycling. The scope and ease of using these services is usually an important selection factor when deciding on a purchase, despite the fact that many services are used only after buying the product.
This opportunity responds to the customer need "I want to start using the product." Its role is to facilitate all tasks, newly arising problems, and obligations connected with purchasing, setting up, launching, and properly using the product, as well as disposing of the product when the customer finishes using it.
Services or their parts can be digitized, for example, selecting bicycles online and subsequent testing and calibration in the store as offered by MTBiker, or pricing surplus books online and subsequently buying them back and collecting them at the store as offered by the Knihovrátok service from Martinus.
Where to start?
- Try to understand obstacles, needs, and obligations of customers related to purchase, logistics, and proper product use.
- Offer services that respond to these needs at the right point in the shopping journey and are simultaneously valuable to the customer, whether from the perspective of willingness to pay for them or perceiving these services as a competitive advantage.
- Create services that suit different customer segments with different preferences while being cost-efficient.
- Implement reliable digital tools and infrastructure that support ordering, tracking, and service management in real-time.
How successful brands make it work
- IKEA: offers comprehensive services including financial loans for furniture purchases, assembly, a circular hub for returning or recycling products.
- Decathlon: besides selling sports equipment, provides services like sports equipment rental, bicycle service, and product testing directly in stores.
- Hornbach: provides project planning services, tool rental, and the possibility of cutting or processing materials, available as both self-service and paid services for customers.
Store as community space
A meeting place for sharing interests where customers gain new experiences and connect with the local community.
The fourth opportunity focuses on strengthening customer relationships through experiences that go beyond the purchase itself. The store functions as a "third place" - a semi-public space where customers have the opportunity to spend time, gain new experiences, and connect with other people in their vicinity with similar interests.
This opportunity responds to the customer need "I want to experience something new and connect with my surroundings." The store thus becomes a place for courses, community workshops, shared hobby activities, cultural and artistic collaborations driving emotional connection with the brand.
A key element is hyperlocality - the brand's ability to adapt to the specifics of a particular market, neighborhood, or customer group and function in cooperation with local culture, artists, influencers, or organizations.
Where to start?
- Conduct customer research to better understand local needs and interests of customers so the store can offer relevant activities and programs that truly appeal to the local community.
- Make the brand a facilitator and connector of authentic experiences that don't come across as marketing events or advertising.
- Collect and use data to strengthen CRM and keep customers in the brand ecosystem.
- Work with customers' positive emotions after experiences with the brand to support their long-term loyalty and engagement.
How successful brands make it work
- IKEA: Westbahnhof in Vienna is an urban store concept without parking and warehouse, designed with local residents with emphasis on community and sustainability, functioning as a showroom and public space with a green roof and panoramic view of Vienna.
- Isadore: a cycling brand connects hobby cyclist communities at various levels through the Black Wednesday event - evening bike rides combined with informal meetings in the brand's premises.
- Mile: has special experience centers that serve as product showrooms while offering cooking courses with local chefs, creating experiences beyond shopping.
How to evaluate what makes sense for your brand?
We don't perceive these opportunities as 4 different stores, but as functions and services that a store can offer. While for some brands it will make sense to cover all 4 opportunities in one store given their broad customer base (like IKEA), others will win by choosing one opportunity into whose design and development they strategically invest as a competitive advantage.
3 Steps to a better brick-and-mortar
- Start by understanding your customers (beyond demographics): how they think about the product category you sell; what their shopping attitudes and habits are; where the store is placed on their omnichannel shopping journey; why they visit brick-and-mortar stores and what they expect from them.
- Identify untapped opportunities: what are the named customer expectations you're not meeting? What are obstacles, obligations, and customer needs that could be solved by services? Which solutions would give the greatest commercial meaningfulness for your brand?
- Don't invest from the desk, test: test new ideas for solutions and services through store interventions and measure and evaluate the impact.
The goal is not to offer as many services as possible from the desk. On the contrary, through research and understanding your customers, focus only on those services that give customers a reason to visit the physical store again.
Not sure where to start?
Download our Experience Identities framework, a report that uncovers the new consumer funnel, and learn how to redefine your brand's position in the market.
