Experience Matters: The Science Behind The Resurgence Of Physical Stores

If real-world retail is dying while digital shops rule, why are Amazon and Google trying to get in the game?

The research setting: Montreal’s massive underground city of retail shops and office complexes. The experiment: One group navigates this mall-like environment by actually walking the physical space. Another group navigates this underground metropolis via computer screen, viewing various images as they "walk" the corridors of this miles-long environment.

The research question was a fairly simple one: Which group remembers the route taken better? Yet the results were rather unequivocal. When immersed in real-world physical space, people were three times more likely to remember the details of the experience—the itinerary of the routes—than people who experience the space as a representation mediated through the virtual environment of a desktop computer. Granted, the way we navigate a physical space isn’t the same thing as remembering a product or brand experience, but the study reflects what a growing body of research in neuroscience and psychology increasingly suggests: We remember experiences embedded in our spatial memories better than virtual ones.

So if a physical experience actually ends up encoded more deeply into our brains than a digital one, why all this endless talk about the end of the store? There’s certainly no shortage of evidence that retail is undergoing a fundamental transition as mobile shopping remakes the retail world. Walmart and Amazon are testing same-day delivery and product pickup lockers. P&G is selling consumers goods direct to consumers on subway trains. Meanwhile, retail employment has steadily declined; massive store closings regularly make headlines; and the next-day delivery model is no longer a novelty, but the cost of entry.

But, science reminds us of an undeniable truth: Immersive, real-world experiences create more permanent memories. Does this, in part, explain why the biggest behemoth in online shopping wants to open stores? Or why even search giant Google is reportedly trying to get in on the old-school retail game? Online shopping might deliver convenience, novelty, and endless price comparisons, but nothing trumps the salience of real-world experiences.

Granted, this doesn’t mean that digital and mobile isn’t fundamentally altering how consumers shop. Nor does it overcome what’s an increasingly impossible-to-deny reality: American retail is overbuilt. We are experiencing a transformative transition period from big-box retailing into something radically different. Yet, I would also argue, none of this actually foretells the end of the physical store.

The store might be the last place brands gain the undivided attention of today’s distracted consumer
"Once a consumer is paying attention to a product based on its tactile properties, it is less likely that they will shift their attention to a competing product or brand," noted one recent study. Not so online. After all, how many browser tabs do you have open on your desktop right now? Seven, eight, maybe 11 like me? Now consider the study, "The Magical Number Seven, Plus or Minus Two," by Harvard psychologist George Miller, about the limits of our capacity to process information. In short, Miller argued that decision-making often bumps up against the inherent constraint of the brain’s ability to process information. There are limits to our attention; seven is the magic threshold for distraction. If you have more than seven tabs open right now, consider what that means for gaining and keeping the attention of an online shopper.

Digital offers endless novelty, but only the store creates an immersive, holistic, and fun experience for consumers

Despite the seemingly exponential growth and popularity of online shopping, consumers still prefer the tactile experience shopping offers. We recently surveyed 7,100 shoppers in seven countries, and found that 54% preferred shopping in the store, compared to 30% on the web, 13% on a mobile app, and 7% on social media. Shoppers prefer the store because it’s a place for exploration and dreaming. Consumers often feel overwhelmed by the abundance offered online and want retailers to curate and create unique spaces infused with fun and novelty, a place where new lifestyles can be explored and there’s always something to learn. The store is the best place for brands to create a completely immersive, holistic, and fun experience for consumers.

Retail brands must evolve the store experience into much more than a place to purchase goods

More than half of American consumers now have smartphones. This fundamentally alters the purpose of retail, but it doesn’t make it irrelevant. Rather, it re-creates the retail space and store into something different: The place where you do all the things you can’t do only online. Yes, nothing tops the efficiency of online commerce when it comes to certain utilitarian functions, i.e., bulk orders for predictable purchases like toilet paper or office supplies. Retailers and brands must identify valuable experiences that resonate within the physical environment, but won’t work in the digital world. And this means getting way more creative: Figure out what can only be done uniquely in the store and create a brand experience the consumer won’t soon forget.

Stephen Jay is managing director, North America, at FITCH, a global design consultancy company. Follow them on Twitter @FITCHdesign.

[Shopping Cart: Lisa S. via Shutterstock]

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1 Comments

  • marr3060

    " We recently surveyed 7,100 shoppers in seven countries, and found that 54% preferred shopping in the store, compared to 30% on the web, 13% on a mobile app, and 7% on social media"

    The question is not about the absolute numbers but rather, how are these numbers changing.  I bet fewer and fewer people prefer shopping in stores.