Showcase stores are replacing classic retail spaces

Against the background of growth of online sales (up to 60-70% in some categories of stores), a number of retail segments are expected to undergo significant transformation of retail space functions over the next few years.

The trend of replacing classic stores by "store-windows" is fixed in shopping and entertainment centers with GLA from 30 000 sq.m. and malls. This was reported by experts of Lasmart (the developer of IT-systems of retail space management). This trend will develop, and in the coming years some categories of stores will almost completely move into a "showroom with ordering platform + checkout" format, while maintaining a minimum range of products, which is designed for offline sales.

Lasmart experts believe that in the next two years, a number of tenant categories in shopping centers, malls and hypermarkets, the share of physical purchase will be about 10-15% of total volume. At the same time experts don't expect the reduction of customer traffic, because they believe that the usual middle-class stores in malls and hypermarkets will remain attractive, but only as a showcase, a place for decision-making and order delivery points, and the main traffic generators of shopping centers will be global verified brands, expanded segment of catering and entertainment.

"Considering this trend, I would not equate the already classic online sales and the type of shopping, the development of which we expect in the next three to four years, - says development director of Lasmart, the developer of IT-system management of retail space. Here we are dealing with a new market reality, where we are dealing with the fact that stores are increasingly becoming a showcase, a place to make a purchasing decision and receive an order, rather than a place where an actual purchase is made. In some segments of retail, a significant portion of product categories is already presented only as samples, and the share of such categories will grow, as will the number of operators who will implement this scheme. It is possible that the usual cash registers will be reduced to a minimum. Choice of goods and payment will be made through tablets placed in the store or by scanning a QR-code on the price tags. The customer will fill their virtual shopping cart, pay for the purchase and receive the goods either immediately or later, with delivery."

To date, the flagship of the retail transformation toward a new sales concept, according to Lasmart, is the DIY segment. According to experts, about 60% of purchases are made online, including online purchases with the physical presence of the buyer in the store. In some product categories of this sector (e.g., electrical appliances), almost 80% of the assortment is present on the shelves as single samples, not for sale.

Among the segments most focused on changing the functionality of retail space in the near future, experts name sanitary ware, furniture, fittings, design, decorative cosmetics and perfumes. Transformation of the retail space has so far been delayed in time for fashion operators; experts believe this is due to the need to finalize software solutions that allow vitrualization of the fitting process with a high degree of accuracy.

Exhibition samples, vitruizing fitting clothes and shoes, and other new technological customer options already cope with this task well enough, and as soon as it will be solved on a consumer scale, the transformation of retail space and merchandising concepts will begin here as well.

Lasmart specialists believe that the proportions of leasable retail space will undergo changes in the direction of reducing the auxiliary storage space due to the abolition of the need to store large inventory and increase the size of the sales area for extended exposure and a comfortable waiting area for goods.

This does not mean, however, that by reducing inventory, the store should reduce its product representation; shelf abundance is one of the key factors of attractiveness. In addition, a certain amount of in-demand assortment will still be sold offline. And in this case, the most successful sales will be with the tenant who will be able to properly analyze the data on sales and margins of goods sold, and as a consequence, configure his merchandising in such a way that, separately emphasizing the items sold offline, effectively exhibit product samples.