The New Physical Marketplace

Four Keys to Successful Retail Development in the Age of Online Shopping

Willis Tower Observation Deck  |  Pre-Design by Rick Hill

The growth of online shopping has created new opportunities for brick-and-mortar marketplaces to thrive. I know, it sounds like a paradox. After all, the boundless world of web commerce offers shoppers almost unlimited choices, customized to their needs and desires via a knowledge base of consumer behavior that typically exceeds what a real-world shopping center knows about its patrons. But online shopping generally entails just a simple transaction: the acquisition of a product for a price. The online marketplace, experienced through the narrow keyhole of a tablet or handheld device, is flawed in its ability to tell the whole story about a brand, or to reach consumers in a meaningful way. These significant limitations present new possibilities for physical marketplaces to flourish. With innovative place-making that engages consumers' senses in a manner that enables community formation and the creation of social experiences, physical marketplaces can be extraordinary sites of culture, connection, and commerce.

In order to take advantage of these possibilities and achieve sustainable success, the well-designed contemporary marketplace should focus on four key elements:

1. Experiences

Physical shopping places must realize the extreme challenge of competing in a transaction-focused marketplace where products are valued on price and speed of delivery. Physical marketplaces, other than those existing primarily for convenience with a here-and-now approach, must embrace their role vis a vis community, socialization, entertainment, and recreation with thoughtful and well executed attractions and experiences (rather than, say, a quick addition of a pop-jet fountain and a selfie spot).

2. Connecting Brands, People, and Place

The new physical marketplace must offer more than just competitive prices. Environments must be created with intrinsic value to retailers and consumers beyond what online shoppers experience.

The web is limited in its ability to tell a whole and complete story about a brand. Physical marketplaces can fill that role by forming around stories, and using place to develop brand culture. The physical marketplace can be a crucial third space, away from home and work, that resonates with the consumer in a uniquely meaningful way. In such marketplaces, stories are implicitly told or subtly shared through activities and events, and through quality and character of place. When the physical shopping environment is well crafted and authentic, it adds value by creating deep connections between a brand and their consumers in a way that is impossible online.

3. Cultivating Community

The new physical marketplace must enable the creation of communities through experiences and environment. The social connections that a shared physical space can generate are unavailable to shoppers in a virtual marketplace.

In the right location, a shop is more than a container for products—it’s a portal into the life of its patrons, best exemplified in resort retail. Marketplaces developed with an eye toward fostering events, lifestyles, lore, and legacy can bring likeminded people together in a manner that creates a sense of belonging. A collection of shops, cafes, and entertainment, when carefully curated and filled with activity, becomes a platform for the formation of communities.

4. Happenings

The physical marketplace creates powerful memory points for consumers. There is a thrilling immediacy to shopping in a place that is a happening— a place that meaningfully connects people and activates brands. In such a place, the joy of shopping is the now, enhanced by a compelling environment and a sense of community. The consumer experience in the new physical marketplace, conceived under these principles, far exceeds the convenience of online shopping.

Of course, these are all big ideas requiring actionable and fully implementable strategies that are market driven and financially viable. Feel free to reach out to me for specific strategies and examples.