The latest in experiential retail

In February 2024, Lego transformed its Battersea Power Station store in London into a flower shop. 

All the flowers were made of Lego Bricks, of course, and employees put together 220 sets to create “Le Florist.” 

Guests are immersed into an experience, Martin Urrutia, Lego’s head of global retail experience and innovation, recently said to an audience at the National Retail Federation’s Big Show regarding the floral transformation. “A couple of months ago we landed a spaceship in the center of the store. We have Santa’s chair — made of Lego bricks — with a fireplace. That’s what delights and creates memories for shoppers.”

That’s because physical retail spaces can be considered a media channel, a place for storytelling and a way customers can see and engage with a brand, according to Urrutia.

But retailers must have the fundamentals in play. That goes back to stock availability, the correct physical location and streamlined communication, per Urrutia. And while experiences can be created within a store, employees enable storytelling.

The toy maker has also been bridging its online and in-store efforts. In the fall of 2024, the company began hosting gaming-themed workshops both digitally and at select locations. 

Lego has also been experimenting with livestreaming and found that the best possible studio for the venture may be its own stores.

“We already have the product. We have the set,” Urrutia said. The company also has found that its own employees make exemplary livestream hosts. 

“They do a great job talking to customers every day. So why not allow them to be on livestream? They are great stars,” Urrutia said. “They’re very authentic. We love the passion that they bring.” 

Lego has also removed some of its standard shelving to create a personalization studio where customers can create customized Lego Minifigures. Shoppers can pick between preselected designs or create something new by adding text, decorations and drawings to their figures. 

“We're removing the space from products, but we believe that will make the store visit unique and we’ll keep shoppers engaged to come and visit again,” Urrutia said.

Instagram user Jacey Adler recently recommended the experience as a dating idea in New York City that “isn’t just going to bars or restaurants.” 

 

 

 

 

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The notion of being able to draw in adults for a toy retail experience may be of particular importance as the cohort accounts for more toy sales than preschoolers. Nearly half of all adults had purchased a toy for themselves within the last year for reasons including collecting, socialization and enjoyment, according to a June 2024 report by Circana. 

Thus, the storytelling that takes place within Lego stores is part of the larger consumer draw. Urrutia urged other retailers to think about the story they are telling to shoppers when it comes to in-store experiences. 

“The expectations are to deliver best-in-class experiences where the brand will come to life,” he said. 

Bath & Body Works wants shoppers to check out its Gingham style. The retailer recently debuted a store design dubbed Gingham+, according to a company press release. The concept includes a new layout, technology features and scent bars in select locations. 

Fifteen new Bath & Body Works locations currently feature the design. The company will roll out Gingham+ to a majority of new stores in the U.S. this year. 

Design elements with Gingham+ include improved store navigation with dedicated zones for specific product categories, larger aisles and more shopping space. Some stores will have scent bars where people can test candles, wallflowers and fragrance mists. Videos will help shoppers discover fragrances and products. 

Bath & Body Works is specifically interested in reaching Gen Zers through the design. 

“We’ve heard from this demographic that many of their purchase decisions are rooted in their ability to try a product first, and while we’ve previously offered this, our new design is more intentional with specific destinations in store to test and learn,” Eduardo Tonietto, group vice president of store design, said in a statement. “Our team also knows that Gen Z is looking for a more relaxing and toned down in-store experience, so we’ve brought in a softer color palette for our fixtures and finishings and incorporated a more neutral palette.”

Bath & Body Works CEO Gina Boswell highlighted the importance of the demographic on a recent earnings call. “We think about younger customers as both an area of recent success and also a continued opportunity,” Boswell said.

Young shoppers have been drawn to the retailer’s lip products and its “Everyday Luxuries” line. The company is increasingly being seen as “a more youthful brand,” Boswell said. 

Part of the retailer’s growth strategy is to improve in-store and online customer experiences, Boswell said. That means investing in marketing, loyalty and technology. 

The company is now a predominantly off-mall retailer, with nearly 60% of its North American stores in off-mall locations with a goal of reaching 75% over time. In 2024, the company opened 106 stores in North America, nearly all in off-mall locations. It also closed 61 stores, predominantly in malls. 

With one less week in the quarter, the company reported net sales were down 4.3% to $2.8 billion in Q4. Net income was down nearly 22% to $453 million. For the year, with one less week year over year, net sales were down 1.6% to $7.3 billion.

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With the recent rapid expansion of omni-channel retail tech stacks, many retailers are finding it harder than ever to understand the full picture of their customers’ behavior, making marketing personalization challenging. From unifying fragmented data sources to getting key customer metrics to the right platforms and maintaining data integrity and customer privacy, there are no shortage of challenges when it comes to making data actionable.

The reality is, in today’s retail landscape, brands have more data at their fingertips than ever before. Many retailers struggle to unify fragmented data sources, get insights to the right platforms, and maintain data integrity. Without the right approach to data management and strategic planning, brands risk missing opportunities to optimize customer retention and drive incremental revenue.

Our three-step guide will help you gain better visibility into your customer data, streamline your MarTech ecosystem, and use insights to foster stronger customer relationships.

Step 1: Centralize, Connect, and Organize Your Customer Data

The key to overcoming data accessibility challenges is consolidating your customer data into a unified system and ensuring it’s readily available to drive the marketing actions that matter most. Whether through a Customer Data Platform (CDP), data warehouse, or a combination of batch feeds and API integrations, ensuring that your data is centralized and connected will help you:

• Understand where your data lives and how it flows between systems.
• Improve data consistency and reduce errors.
• Facilitate seamless access for marketing teams, enabling more efficient campaign execution.

To ensure a seamless flow of data between systems, brands should prioritize strong integrations with their downstream channels. By establishing reliable connections, brands can deliver well-defined audience segments to their partners while also receiving key performance data back into their centralized database. This two-way exchange enables a more complete understanding of how each channel contributes to customer engagement, providing insights into both individual channel performance and the broader contact strategy. A well-structured data flow ensures that decisions are always informed by the most current and comprehensive view of customer interactions.

Step 2: Analyze Customer Data Without Getting Stuck in Analysis Paralysis

Once customer data is accessible, a team of data scientists can deliver powerful insights into your customers and illuminate the path to incremental revenue among key segments in your customer file. While it’s tempting to analyze every possible data point, focusing on moveable metrics and file trends will be most impactful. Consider in-depth analysis on:

• Shopping cycles and spending habits: What are average order values, trip frequency, channel preferences, and other signs of engagement?
• Migration: How are customers behaving with your brand over time in terms of trips, spend, offer redemption, and more?
• Lifetime value: How much revenue does a customer generate throughout their relationship with your brand?

By consistently measuring and interpreting data points like these and others, brands can refine their customer touchpoints, improve messaging accuracy, and make informed marketing decisions without getting bogged down in unnecessary complexity.

Step 3: Leverage Data Insights for Strategic, Personalized Customer Journey Mapping

Effective customer journey mapping powered by connected data insights can significantly enhance engagement and revenue. Personalization is no longer a luxury; it’s an expectation among today’s consumers. When brands align customer behaviors and preferences with tailored marketing experiences, they can:

• Deliver relevant content at the right time and in the right channels.
• Increase retention and customer satisfaction.
• Boost conversion rates and drive incremental revenue through targeted offers and messaging.

For example, you may find that a segment of customers is not responding well to your direct mail efforts, but they seem to be engaged with email or SMS. Brands can leverage those insights to determine channel efficacy and efficiency. Similarly, by analyzing data, you can identify when a high-value customer has a reward available and is showing interest in a new category, thus allowing you to create a personalized near-reward campaign tailored to their behaviors. In addition, you can better inform your customer journey map, by synchronizing data across multiple views: customer-level (i.e. spend in the last 12 months at segment level), channel-level (online, in-store, in-app), and program-specific insights (i.e. loyalty or subscription program performance).

With Hibbett Sports, our ability to manage and distribute their customer data allows for a more orchestrated customer journey that directly ties back to their larger brand strategy. It’s not just about data collection—it’s about structuring and using that data strategically to create meaningful, revenue-driving customer experiences in multiple channels based on data-driven insights.

Actionable Customer Data Drives Customer Engagement and Loyalty

Retailers that organize and connect their data while prioritizing meaningful and actionable analytics can unlock new opportunities for customer engagement and drive stronger brand loyalty than ever before.

Now is the time to assess your MarTech stack, ensure your data is working for you, not against you, and build a seamless experience that keeps customers coming back. The retailers who succeed

will be those who transform their data challenges into a competitive advantage, retain customers, and increase customer lifetime value. Need advice? Let’s Talk.

Macy’s in January revealed the first 66 locations that are closing as part of plans announced nearly a year prior to shutter about 150. Most in this round will close in Q1, with a few already closed and a couple closing mid-year.

The 66 locations slated to shutter span 22 states and many are mall anchors, according to a list released by the department store. Several are stand-alone furniture stores that in some cases will shift operations to nearby full-line stores.

The department store is closing four of its 24 small-format stores, a shift from the acceleration of small-format openings announced in 2023. Six out of nine of the retailer’s freestanding off-price Backstage locations will also close.

Many of the closures confirmed by Macy’s are mall anchors, but its shrinking of the small-format and off-price footprints indicates that two concepts previously touted as full of potential may be getting shelved or at least downplayed.

The small-format stores are about one-fifth the size of Macy’s full-line stores. In 2023, under previous CEO Jeff Gennette, the company said it could triple the number of these locations by the fall of 2025. In February 2024, CEO Tony Spring said that, while 150 underperforming Macy’s stores would be closing, in some cases even if they are profitable, 30 small-format, off-mall Macy’s stores would open.

Macy’s launched Backstage about a decade ago and saw expanding the off-price operation as a way to grow and more effectively leverage its real estate. Though most locations have been carved within full-line stores, in recent years the company said it would return to its idea of opening more stand-alone Backstage stores, which like the small-format stores are mostly housed away from malls.

Macy’s didn’t immediately reply to questions about how much its small-format plans have changed, if at all. In a statement, Spring emphasized improvements in merchandising and customer service at stores slated to remain open; the company didn’t mention its forays into off-mall stores, smaller stores or off-price.

“Closing any store is never easy, but as part of our Bold New Chapter strategy, we are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go-forward stores, where customers are already responding positively to better product offerings and elevated service,” Spring said.

Some analysts don’t view either the small-format or off-price strategy as productive.

“The small-format idea isn't a big winner,” Erik Gordon, professor at the University of Michigan’s Ross School of Business, said by email. “Backstage isn't great. Unless Macy's comes up with a new idea, its future is to shrink, not grow.”

In fact, these closures don’t go far enough, according to Nick Egelanian, founder and president of SiteWorks.

“I noticed closures at Southlake in Texas and some very good malls. Not many surprises, though,” he said by phone. “They continue to pare back only as stores become all but dead. I’ve been saying for many years, ‘Close more, get out of the Midwest and stop with the useless small-store program.’ What we need to see is what Macy’s is doing to save their best 200 stores — not their annual closing list.”

Sephora is in the middle of the largest capital project in its history, wherein it is redesigning every store in its North American fleet, Artemis Patrick, president and CEO of Sephora North America, told an audience at the National Retail Federation’s Big Show conference in January. 

Some stores “will get major redesigns, and some will get minor,” Patrick said of the project, which launched last fall. The beauty retailer has over 700 stores in North America. 

The beauty retailer doesn’t know exactly how long the store transformations will take, but the majority of it will be done over the next five years. 

A number of company insights are currently informing the redesigns. Sephora examined heat maps and how people are shopping. The company also thought about its gondolas, or displays in stores that showcase a brand’s products, which Patrick acknowledged are expensive. “We’re not a cheap date,” she said, “and we don’t want our brands to be spending a ton of money on building these amazing fixtures, and then it doesn’t work out.” 

Therefore, the company began testing a format that makes it easier to update its stores, with a focus on its key categories of makeup, skin care, fragrance and hair care. Sephora wants to ensure that the shopping experience represents its current assortment but also what the company thinks it may be in the future. 

After talking to “millions of consumers,” the beauty retailer also designed a space where its beauty studios could be off to the side. “The reality is, [shoppers] didn’t want their makeup being done in the windows — not shocking — but they wanted more lighting,” Patrick said. 

Sephora also considered its line formation for checkout. Shoppers are used to a “snake” line wherein they can look at and consider grabbing product minis while they wait. Yet, 25% of shoppers are being checked out by beauty advisers via mobile throughout the store. 

Using that information, and the idea that checkout may increasingly be done in-store via mobile, the company is making some of its fixtures more modular, like the “minis” setup. “We can actually break up the fixture and move it to the front if we wanted to, creating a much more agile footprint,” Patrick said. 

“I think too many times retailers talk about the ‘store of the future’ and it’s very much driven by the design team. So you have this conversation of form versus function,” Patrick said, stressing that there’s nothing wrong with that approach. However, Sephora wanted to consider the stores beyond its flagships and ensure a cohesive shopping experience regardless of store location. 

“We do believe we have that consistency with our beauty advisers, but maybe not necessarily in our retail stores,” she said. 

Sephora had brought the changes to 111 stores prior to the presentation and, as a result, key performance indicators, transactions, productivity and sales were up when compared to the control group. 

Outside of store renovations, Sephora in 2024 increased its global footprint in Australia and over the summer announced Tanger would add locations to its shopping centers. The beauty retailer’s presence at Kohl’s through shop-in-shop fixtures is helping the department store drive growth by bringing a younger, more diverse customer to its stores. It’s also helping Sephora to better compete with Ulta, as many Kohl’s stores operate in the same type of shopping centers as Ulta. In fact, in recent quarters Ulta has directly called out the impact of competitive pressures on its performance.

With the holiday season underway, retailers are tapping their marketing budgets to entice shoppers to spend at their stores and online. At the same time, though, they are making mistakes that are keeping customers away.

“Retail right now is a mixed bag — some winners and some losers. And a lot of that comes down to the experience offered,” Nikki Baird, vice president of strategy and product at retail tech firm Aptos, said in emailed comments. “Consumers today have higher expectations for what a retail experience — particularly in the store — needs to offer than it did five years ago.”

Here are retailers’ most common missteps in merchandising and store operations.

Getting the merchandise

Many retailers are making it difficult for their customers to obtain what they’re trying to sell.

An obvious example of this is the locked-up products that consumers are increasingly finding at stores, mostly at drugstores and mass retailers. A great majority of shoppers — 62% — say they’ll wait for a store employee to help them, but more than a quarter say they will give up on their purchase or go elsewhere, according to recent Numerator research. Those unwilling to wait for assistance spend 21% of their dollars online compared to 18% for those who waited.

“When faced with a locked product, there’s more than a 1 in 4 chance shoppers will leave that retailer without making a purchase,” Numerator analyst Amanda Schoenbauer said by email. “This rises even higher if you’re talking about younger shoppers, people with children, or if the locked items are in everyday categories like health and beauty.”

Inadequate staffing exacerbates the very problem of theft that locking merchandise is supposed to thwart, according to Brendan Witcher, vice president and principal analyst of digital business strategy at Forrester.

“Associates have always been a key factor in making sure stores are safe and secure by acting as a deterrent through visible presence and shopper interactions,” he said by email. “Without enough of them in place, retailers are forced to find other ways to ‘protect’ the store.”

Self-checkout is another area where retailers are missing customer expectations when it comes to assistance and connection, experts say. 

“The folks missing the boat are viewing self-checkout as a cost-savings opportunity, which ignores the sole advantage of brick-and-mortar retail, where you have human interactions,” Brett Wickard, founder and president of unified commerce platform FieldStack, said by phone. “Retailers who are studying the customer journey data know that the more touchpoints you have — the more genuine person-to-person interaction you have — not only does that customer shop with you longer, they're a more engaged customer.”

Fostering discovery

People who shop online are there primarily for convenience, while those who head to stores expect a certain level of merchandising, according to research from Jonathan Zhang, professor at Colorado State University’s College of Business.

Research from Zhang and others indicates that curating merchandise and providing good customer service in store have helped protect local retailers like independent booksellers from Amazon’s fierce competition.

This matters to some extent online as well, according to Kristin Naragon, chief strategy officer at Akeneo. Research from Circana highlighted “the growing importance of online research and price comparison before making a purchase.” More than 80% of holiday shoppers plan to shop online in 2024, according to Circana’s Holiday Purchase Intentions report. Fewer will shop online exclusively, which is an opportunity for brick and mortar, per that report.

With so many consumers shopping online and being careful about their discretionary spending, it’s more important than ever to create “a frictionless discovery to purchase experience where customers can easily find, compare, and confidently purchase products,” Akeneo’s Naragon said by email. This is accomplished in part through online assortments, product descriptions and search options that are meaningful to customers and easy to manage.

“However, where many retailers continue to fall short is either overwhelming buyers with choice or not giving them enough information in order to make that confident selection,” she said. “A core reason driving both of those failures is a retailer’s lack of investment in curating their products.”

Customer service

Squirreling away goods behind locked cases or over-reliance on self-checkout aren’t the only ways retailers discourage customers. Too many have trimmed their costs by drastically thinning out their store staffing in general, experts say.

More than 40% of consumers surveyed by Theatro, which supplies tech for frontline workers, described shopping in stores as “less enjoyable” than before the pandemic, and 60% of them pointed to poor staffing levels. This hurts the top line, according to GlobalData Managing Director Neil Saunders, who has monitored a dearth of staff and customer service at retailers like Macy’s and Nordstrom.

Retailers who measure repeat business find that good in-store customer service brings people back into the store time and again, according to FieldStack’s Wickard. Cutting staff is a short-term profit boost that hurts in the long run, and is usually undertaken by retailers that aren’t looking at the right data, he said.

“Retail at its core is really four walls and some people coming through the door. What you do with that is what makes you who you are,” he said. “If you don't have incredible retail teams and great inventory — that's literally the reason you exist. You can never under-allocate customer service. Not only that, you should view it the exact opposite way, where, when other retailers are under-serving customers, you should actually be doing the reverse and investing in that because you are going to have more and more customers who are going to be entering your doors, and you have that golden opportunity to win a new customer.”

A lot of retailers miss this because they fail to view holistic data, due to disconnected point-of-sale and customer management systems. This leads to “smart short-term decisions and really poor long-term decisions,” Wickard said.

Failing to cater to customers in stores through meaningful communication and merchandising is throwing up obstacles, according to Colorado’s Zhang.

“Retailers are foolish if they do not make it easier for consumers to shop, easier for consumers to get their questions answered by trained staff, and also easier for customers to discover new things and new categories,” he said by phone. “These are the benefits that stores have over online, so they should just maximize that.”

As it looks to brand itself as a sports retailer, Skechers has opened its first performance-focused store, an immersive experience for customers wanting to test out the brand’s latest sports footwear technology, per a news release.

The 7,500-square-foot store is located at the West Edmonton Mall in Canada and features digital LED screens and half-court platforms for both basketball and pickleball where customers can try out products. The new store features a range of the company’s sports-related footwear in categories like golf, soccer, running, training, walking, trail and hiking.

Originally founded in 1992 as a comfort footwear brand, Skechers has in recent years leaned into the athletics market, creating shoes for a variety of sports. Skechers in 2023 entered the basketball space with two shoes and a partnership with NBA players Julius Randle and Terance Mann, and that same year released its first soccer cleat and announced Harry Kane as a brand ambassador.

Skechers’ roster also includes NBA player Joel Embiid, as well as pickleball’s Tyson McGuffin and Catherine Parenteau.

“With the world’s elite pros wearing our shoes from the court to the pitch, mound and green, our retail stores’ innovative performance products have become a magnet for athletes who want game-changing product with essential comfort,” Michael Greenberg, president of Skechers, said in a statement. “Our new performance store offers competitors at every level the complete experience: from our largest-ever offering of performance footwear, apparel and accessories, to Skechers specialists and educators for our diverse sport technologies, and courts where consumers can discover how our product performs without ever leaving the store.”

The retailer said in its announcement that Edmonton’s “vibrant sports culture” was part of the draw for the new location.

Skechers, which has over 5,300 stores worldwide, is coming off a third quarter that saw sales increase 16% to $2.35 billion.

While select Skechers stores and the brand’s website already carry the performance footwear, the Edmonton store further signals the company’s commitment to the athletic space, where such brands as Nike, Adidas, and Under Armour play. 

The death of stores had already been a much-discussed idea by the time the pandemic hit, cratering foot traffic across the industry and leading many retailers to file for bankruptcy and shutter large portions of their fleet. E-commerce secured an even bigger role in customers’ lives as a result and retailers invested heavily in their online capabilities to meet new needs.

But more than four years later, stores are not dead. In fact, foot traffic has largely returned to 2019 levels, according to PwC’s U.S. Retail Leader Kelly Pedersen. There are also fewer vacancies than in previous years and younger generations are embracing the in-store shopping experience, even if they aren’t buying there.

“It is a different type of traffic and a different type of purpose,” Pedersen said, noting that conversion rates are down despite traffic growth. “That's just really indicative of people going to stores for different reasons than to just purchase, right? They're going into them to return. There's a solid, bigger shift toward browsing.”

The level of turnover at malls and shopping streets can also be evidence that a new generation is making its preferences known, according to Michael Brown, a partner and Americas retail leader at Kearney. He sees it as a good thing because it means new shopper needs are surfacing. It’s also, in part, a factor of younger companies like DTC brands searching out shorter leases or pop-up style agreements, Pedersen noted.

All this to say, physical retail is still healthy, even in a world with higher levels of online purchasing. In fact, an Experian report found in-store shopping for the holidays held relatively steady from 2022 to 2023, with around two-thirds of sales done in stores between October and December. Nearly half of the shoppers it surveyed planned to head to stores in 2024.

And especially at the holidays, there’s something about physical shopping that AI recommendation services and personalized websites just can’t provide.

“When it comes to the word ‘shopping,’ it really takes place in the physical world because that's where you really go, you look, you feel, you touch, you engage and you decide eventually what you're going to buy,” Brown said. “You may buy it later in the store or you may just buy it online — so I think there is really a difference between shopping and actually buying. And I think we see shopping still [has] so high levels of people going to the stores to have those experiences.”

What online changed (or didn’t)

Over the past decade, holiday shopping preferences across stores and e-commerce have effectively swapped places. The 59% of shoppers who planned to buy holiday gifts in stores in 2015 has shrunk to a projected 45% in 2024, while those who expected to shop online grew from 41% in 2015 to 55% in the same period, according to PwC. 

It’s a noticeable tilt toward e-commerce, but not nearly as high as the 61% that looked online in 2020 during the exceptional circumstances of the pandemic. And in fact, the projected percentage of in-store shoppers in PwC’s survey in 2024 increased for the first time since 2021. Black Friday, too, saw a rare spike in popularity, with a 3% increase in respondents planning to shop on the banner holiday, which tends to be an in-store event. That’s the first time that metric has grown since 2018. It still only amounts to 22% of shoppers, though, down sharply from the 59% who planned to shop on Black Friday a decade ago.

There are other factors that might lead to higher store traffic in 2024 as well. The shorter holiday season, coupled with consumer delays due to the election, will likely send shoppers into stores more as the season wears on and delivery times become less reliable. 

“There's a lot of ingredients there for a pretty robust in-store holiday shopping season this year,” Pedersen said.

Interest from shoppers spans different buying environments as well. While there is a trend toward high-street shopping during the season, Pedersen said a lot of traditional malls are seeing higher traffic again as well, courtesy of the large swaths of the country that moved out to the suburbs during COVID.

But e-commerce retailers and social media platforms are also finding innovative ways to reach customers, including through the industry’s favorite buzzword of late: AI. Etsy, for example, introduced an AI gift recommendation service in January 2024, while Amazon launched AI shopping guides and a virtual holiday shop to entice customers.

Pinterest debuted a personalized gift feed on its platform in November, alongside a series of gift guides curated by celebrities and publishers. And a report from Fiverr earlier in 2024 found that 14% of Gen Z in particular planned to use generative AI search to look for gifts.

Efforts like these can work, “if the algorithms are right and you can really be hit with something that you've always looked for — you want it, maybe you had a pattern of trying to find those things,” Brown said. “I think the challenge that there always is with online is the screen in front of you is only like 10 by 12, and you can only see so much. But when you go out and you look at the physical retail environment, it all opens up, right? You get peripheral view. You get long-distance view … online, it's hard to do that.”

That said, online isn’t without its benefits. It’s great for mission shopping, according to Brown, referring to when a customer already knows what they want. And there are different times during the season when e-commerce channels have more sway with shoppers. Social media, DTC and emerging marketplaces (think Temu and Shein) are more successful at the start of the season, according to a report from Boston Consulting Group, when shoppers have more time to find the perfect gift and aren’t as stressed about price and delivery times.

Retailers can make their websites more enticing as well, with festive banners or by offering the same promotions that they do in stores, like a free gift with purchase. But Pedersen admitted it’s difficult for retailers to mimic the joy of shopping in person.

“Other than us at some point having true VR headsets where we're walking through a store and experiencing that way, it's pretty hard,” Pedersen said.

And during the holidays in particular, shoppers are looking for that.

The joy of shopping

What makes the holidays different than any other time of year? At its most basic level, it comes down to gifting. Customers prowling through a shopping street or mall during those critical fall months are looking not for themselves (at least not primarily), but for others. That means discovery shopping is critical, and that’s where stores thrive.

“What's successful this season is really having unique and differentiated products and an experience where consumers think they're really winning or they're getting that special deal,” Brown said, noting that off-price players have done this particularly well. “It's a little bit of that pursuit and uniqueness and surprise of what I can find in your store. Because if I know exactly what I'm looking for, then it's easy for me to shop online.”

Customers might make a lot of purchases online, but when it comes to discovering what gifts to give, shoppers of all generations turn strongly to physical stores. In a report by PwC, every generation except for baby boomers said visiting stores in person was their top way to discover gifts. For boomers, it was second only to talking to friends and family. Both of those methods — the flesh-and-blood variety — landed significantly higher than the third all-around highest, which was online marketplaces.

“Sometimes you just see how busy the store is, and you say, ‘Well, now I’ve got to go see it,’ right? There's that crowd attraction,” Brown said. “Even as much as we'd all like to stay away from more lines at the register when you're there, that means something's going on there. And again, you can't really see that and experience that online.”

There’s a psychological reason as well: Shopping during the holidays can be a lot of fun. Winter milestones like Christmas, and the act of indulgent spending that often goes along with them, can serve as a way to cheer ourselves up during the darkest times of the year. Stores decorate their windows, blast seasonal tunes and waft pine or peppermint fragrances into the air. And much like the scents of pumpkin spice can tap into nostalgia and remind shoppers of fond memories, the right sensory stimulation can make holiday shoppers view a store more fondly.

Even spending money on others makes people happier than spending on themselves, Happiness Research Institute CEO Meik Wiking told Retail Dive in 2023.

“People just generally like to go to the stores during this time of year, it puts them in the mood. They go get some hot chocolate or something from one of the food stands. There's just something about it,” Pedersen said.

Some retailers are answering that call. Macy’s, for example, is hosting a holiday market at its Herald Square flagship, alongside its usual holiday window displays and Santaland experience. Target is offering in-person “Wonderland” events this season as well, with shoppable brand experiences. Others, like Anthropologie, are taking a pop-up approach to create holiday-specific shopping environments.

The opportunity to do more than just shop at the holidays — to go out to eat, for example — is key to a thriving shopping center. Outside of the usual Santa visits and sale offers, retailers could try more creative ways of bringing people in as well, like exclusive brand launches or a loyal customer night, according to Brown and Pedersen.

“These things should really be called consumer engagement centers and it needs to be a mix of consumer activities,” Brown said, much like a downtown shopping area meets many different needs. “It should be about shopping, entertainment, food, social gathering points for the community.”

Some of these trends are already happening in malls across the U.S., according to Brown. And based on the interests of younger generations, in-store shopping could continue to grow. Of all the generations PwC studied, Gen Z leaned the heaviest toward shopping in stores to discover new gifts, at 60%. They do have expectations around digital components, like self-checkout technology and brand apps, but they’re interested in going to stores. And their spending power is rising.

“Gen Zs and Gen Alphas are big in-store visitors — they go to stores a lot,” Pedersen said. “I think this trend of more in-store shopping based on those generations is going to continue for the next few years because it’s just proven that the Gen Zs and Gen Alphas like to be in store more than the millennials. So I think we see a lot more of this.”

A Barnes & Noble in Washington, D.C. is hoping the sequel is better than the original.

The book retailer in November opened a three-story, 30,000-square-foot store in the heart of D.C.’s Georgetown neighborhood, directly across the street from a Rag & Bone, Bluemercury and Lululemon. The location was once the site of a jail, a movie theater, Henry Ford’s first dealership in the D.C. area — and a very familiar book store. Barnes & Noble itself occupied the same building in 1995 until it eventually vacated the space in 2011. 

Barnes & Noble CEO James Daunt called the D.C. space the “most ambitious” of the company’s new locations. 

“The old location was a fantastic store for Barnes & Noble. We left the space because our lease ended,” a spokesperson for the company said by email. “When the opportunity to open a store in that exact location came up, we could not resist to go back to our old building and once again have a location in Georgetown.”

The D.C. store is part of a larger brick-and-mortar expansion strategy, wherein Barnes & Noble is launching dozens of locations across the U.S. after over 15 years of declining store numbers. In 2023, the retailer opened more new bookstores in one year than it had in the entire decade of 2009 to 2019.

The company is now on track to open around 58 stores by the end of 2024. In November alone, Barnes & Noble will launch locations in New York, Florida, Utah, New Hampshire, Indiana, Kansas, California, New Jersey and Washington. 

Only a week prior to the launch in D.C., a store opened in Chicago’s Wicker Park in the historic Noel State Bank building, in what Daunt said was one of the most “beautiful bookstores anywhere in the world.”

Part of the bookseller’s overarching strategy, and what is taking the company into a period of growth, is handing the control of each location over to its local booksellers.

“The assortment has been curated by our Georgetown book team and will reflect the interests of the area,” a company spokesperson said of the D.C. store.

The space’s first level contains new book releases, gifts and an entire back wall of journals. Visitors to the second level will encounter fiction while the top floor features nonfiction. The store features private label Barnes & Noble products, seasonal gifts, an extensive toy and game selection and an expanded vinyl collection. 

The Georgetown store added new fixtures and furniture but kept the existing interior of the building. That includes columns and hardwood floors from Nike, the tenant prior to this iteration of Barnes & Noble. The space will eventually have a cafe that is scheduled to open in 2025. 

Barnes & Noble was acquired in 2019 by Elliott Management, owner of Waterstones, the largest bookseller in the United Kingdom. Daunt, who is the CEO of Waterstones as well as Paper Source, also took on the role of chief executive of Barnes & Noble.

At the time of the acquisition, Daunt hinted at the strategic trajectory of its brick-and-mortar stores, some of which has come to fruition through this latest round of openings. The inclusion of toys in stores and becoming a gift destination — goals that were stated in 2019 — can clearly be seen in the Georgetown location. 

But book store sales overall have yet to return to pre-pandemic levels. In 2023, U.S. sales in the category reached $8.3 billion dollars, relatively flat compared to the year prior, according to Statista data. 

Don’t tell that to shoppers in Georgetown, though. The retailer has been open for less than two weeks and has already seen packed crowds, conducted author signings and even held a pop-up featuring merch in collaboration with South Korean boy band Ateez.

“The return to this historic building is a dramatic example of the ongoing revival of brick-and-mortar bookstores,” Daunt said. 

“We wanted to put ourselves in front of more people.” 

That’s what CEO Sarah LaFleur said of M.M. LaFleur’s opening in Union Station in 2020. It would turn out to be an incredibly ill-timed decision, with the concept opening inse a train station just weeks before the COVID-19 pandemic shattered physical retail plans across the globe. But the brand still wants to put itself in front of more people — and is doing so with a new store in Washington, D.C.’s Georgetown neighborhood that opened May 8, as well as a few more on the horizon.

“We opened in Union Station like six weeks before the pandemic — and they were the six greatest weeks of that store,” LaFleur said in an interview reflecting on the period.

M.M. LaFleur ended up closing all of its stores in 2020, with a slow reopening process since then. Now, the retailer — known for its workwear — lists seven locations on its website, most of which opened in 2024, including the recently opened store in Georgetown and another that opened a few weeks later in Philadelphia. The Georgetown location, a few minutes walk from the main M Street drag, is across from Maman, a cafe M.M. LaFleur has partnered with before in New York. It joins another store in D.C., on K Street, which was the first to reopen and is more closely located to one of its key demographics — people who work in corporate offices.

“That location has done phenomenally for us. There are a lot of professional women who stop by during their lunch break or right after work, even in between meetings, so that location’s actually been very good for us,” LaFleur said of the K Street store. “We were like, ‘OK, D.C.’s grown so nicely, we could probably support another location. Where does it make most sense?’”

‘We don’t really have the luxury of locations not working’

Georgetown stood out as a spot where many of the brand’s customers in Maryland and Northwest D.C. like to shop, but M Street “didn’t feel quite right,” according to LaFleur. Georgetown’s main drag features a plethora of name-brand stores and up-and-coming retailers, including Glossier, Skims, Patagonia, Allbirds, Free People, Warby Parker and more.

“It's heavily trafficked, but it didn't actually necessarily feel like it was our traffic. There was a lot of tourist traffic, and obviously some Georgetown University traffic, but I was like, ‘This is not quite right.’ And then when we walked down Wisconsin, I was like, ‘Ah, this feels much better,’” LaFleur said about the road that runs perpendicular to M Street. “And, I mean, we're still very much underdogs. It's not like we've got hundreds of thousands of dollars to just drop on a new store opening. So we were also really opportunistic about what we could find.”

So far, the store has performed well. Katie Twidwell, vice president of sales and operations at M.M. LaFleur, told Retail Dive via email that the store saw double the expected sales in its first month in business. M.M. LaFleur is thoughtful about where it opens stores, for the most part only opening once there’s a certain level of e-commerce presence in a given city. And most of its stores are four-wall profitable, according to LaFleur.

“We don't really have the luxury of locations not working,” LaFleur said. “L.A. we know, online, we don't have as many customers as San Francisco. So even though I know L.A. is a big market and probably would be a good opportunity, we can't just open a store there and consider it a loss leader … We can't have it be a top-of-funnel strategy, like it has to return money to the business fairly quickly. So I guess that is the conservative approach here, but I think the one we feel comfortable with.”

The brand is planning one more opening in 2024, in Chestnut Hill, Massachusetts, and likely “a few more” in 2025, according to LaFleur. But even long term, LaFleur envisions a U.S. footprint of only about 20 to 25 stores. That’s low compared to some other DTC brands, but that might not be a bad thing.

“A lot of DTC companies look at Warby Parker and they say, ‘They opened stores and that's been really successful for them, so we should go and follow the same playbook.’ And like, Warby Parker is a fabulous brand, but I don't think of it as a brand-driven consumer goods company. I think at the end of the day, it's quite utilitarian and fashion doesn't have the same luxury,” LaFleur said. “I just think the number of stores that you can open before you might see that kind of slower return is lower.”

Nevertheless, physical retail is a critical piece of communicating with the customer, and M.M. LaFleur has evolved enough over the years that opening that conversation back up was important, according to LaFleur. The brand, which started with only dresses, still sells workwear-style dresses and tops, but also T-shirts and denim.

“A lot of people still think of us as the brand that was focused really on corporate dressing — and we do a lot more than that,” LaFleur said, adding that advertising on Google and Meta is “hairy and unpredictable” in a way that physical stores aren’t. “Right now, my strategy as CEO is just keep diversifying, diversifying, diversifying. Don't get caught with our pants down, don't lean too hard into one channel versus another.”

Evolving, but not too far

M.M. LaFleur’s current iteration isn’t a complete departure from who it was five years ago. Many of the brand’s best-sellers from 2017 or 2018 are still sold and still crack the top 10 in terms of sales, according to LaFleur. The executive still thinks of the company’s customer strategy as “narrow and deep” — and still sees the brand tied to “elevated clothing.”

“We're not the brand that you would probably wear if you wanted to relax at home. Or if you wanted to … just get a cup of coffee and walk around the neighborhood,” LaFleur said. “We're clothes where you want to just show up a little bit and I think showing up can take many forms, but if you just want to look a little put together, then that's when you put on your M.M. … We're not going to compete against Everlane or Uniqlo.”

But a brand evolution only works if customers come along for the ride. LaFleur hopes that a broader assortment means customers tell their friends about M.M. LaFleur more and the brand becomes more of a go-to store for its current customers. As it is, some existing shoppers are still surprised to discover M.M. LaFleur sells certain categories. 

“You could see a world in which they would say, ‘M.M. has gone in a different direction and it's not for me anymore’ — and I'm sure that's happened to some customers, I'm not denying that,” LaFleur said. “But I think for the most part, customers have really kept up with us, and they've liked the direction we've headed in and so we're not churning them.”

Newer collections have been promising, with the sell-through rates of its recent spring line “significantly higher” than its other lines in the post-pandemic era. 

It’s not just the product lines that are evolving. M.M. LaFleur’s Bento Box, a Stitch-Fix like subscription service, shut down in the fall of 2019 and relaunched in April, with a focus on having customers preview the items in their box and potentially make changes before receiving it. An initial lookbook usually gives customers eight styles to preview, which they then discuss with a stylist and add or subtract pieces based on what they’re looking for, according to Twidwell. Most shoppers whittle down their Bento Box to between five and six styles that they ultimately purchase, Twidwell said. M.M. LaFleur noted average weekly revenue has grown 12% since the relaunch. 

The company's stores have always stressed appointments, and still offer them, but the company is also expanding the in-store experience beyond that. Only two of M.M. LaFleur’s seven stores strongly recommend booking a stylist in advance, and even then, walk-ins are possible. 

“We really like our appointments — and I think our customers really like them, too,” LaFleur said, noting good basket sizes and higher net promoter scores from appointments. But part of the reason the Georgetown location was appealing was that anyone can walk in, according to LaFleur. M.M. LaFleur’s K Street store, on the other hand, requires prospective customers to hit a buzzer in order to enter, likely a deterrent to casual shoppers.

M.M. LaFleur is also marketing to customers through new avenues, including through a multiyear partnership with the WNBA’s New York Liberty that launched in 2023. The brand gives free clothing loans to women running for office and dresses a selection of authors that it works with for their book tours as well. Post-pandemic, M.M. LaFleur stores have also played host to book events for some authors.

The Georgetown store, for example, has its first store “book club” in the works and features a curated book collection in the store, thanks to a partnership with local independent retailer Old Town Books. The events are good not just for existing customers, but also serve as a unique customer acquisition tool, according to LaFleur.

“I’m a big reader, I mostly read a lot of novels. It's kind of my happy place,” LaFleur said of why the company has leaned into partnerships with bookstores and authors. The company’s New York locations also have a local bookstore partner. “We started actually featuring a lot of authors on our blog, maybe six or seven years ago … There is a nice Venn diagram of women who like to read fiction and memoirs, and M.M. customers.”

Ace Hardware is preparing to launch a new experiential store model.

Dubbed Elevate Ace, CEO John Venhuizen said the home improvement retailer plans to invest over $1 billion to add the concept to its new and existing stores over the next five years.

Key changes include adding store-in-store brand showrooms; new product assortments; a flagship store model featuring an outdoor space with a live goods display; and enhanced customer service.

“[We] wanted to create more than just a space where customers could come shop but a space in which they could connect,” Dale Fennel, the company’s vice president of merchandising, said in an interview with Retail Dive. “We think that Elevate Ace is a fundamental change in our store model.”

Ace Hardware introduced the Elevate Ace concept with a fully built out 13,000-square-foot model store inside the McCormick Place convention center during its recent convention in Chicago. 

While a handful of stores will feature the new concept in Q4, Fennel said the full rollout will begin in January 2025.

Experiential retail is “one of the absolute imperatives” for the company and for the overall future of retail, Fennel said. The revamp began two years ago with two goals in mind. The first was to build a store that highlights Ace Hardware’s core categories — paint, power tools, backyard grilling and home preservation. The second goal was about community. 

A key element of the changes is to create an in-store shopping experience that can’t be matched online, Fennel said. A small number of brands and categories are fueling most of Ace Hardware’s current growth, “so we set out to really elevate those brands and create this immersive shopping experience that you can’t find anywhere else.”

The hardware retailer is debuting the experiential store model as it celebrates its 100th anniversary in 2024 and the recent opening of its 5,000th location in the U.S. The company opened 111 new stores through June and plans to open 200 overall by the end of 2024. Globally, Ace Hardware has over 5,800 locations in 60 countries.

The industry has changed since the company last updated its store design five years ago. To enhance the customer service experience, Fennel said they’ve trained frontline associates to serve as brand advocates who can help walk customers through a purchasing decision whether they want to shop by brand or by features.

Additionally, Fennel said they’ve optimized the assortment in the home preservation section and that the makeup of the product categories will shift. While the grilling category will occupy the same space on the sales floor, Fennel said the power department will grow significantly by about 60%. 

“We really are focusing in on trying to understand what the customer wants, whether it be by brand or features and benefits, and serving up to them all the products that are available at Ace either in store or in the case of grilling, for assembly and delivery,” Fennel said.

As a cooperative, Ace Hardware has a different business model than big-box home improvement stores. And Fennel said the company operates in a slightly different retail segment than Lowe’s or The Home Depot. Most Ace Hardware stores, for example, don’t offer building materials or large appliances. That approach has insulated the company from some of the economically driven consumer reluctance or inability to spend on big discretionary purchases, like major home renovations. 

Lowe's and Home Depot saw sales decline in their most recent quarters, down 4.4% and 2.3%, respectively. Ace on the other hand reported first-quarter revenues grew 2.5% year over year to $2.1 billion.

“We know there’s different purchase occasions, and customers are going to shop with different retailers but that separation of home preservation versus home renovation is a key differentiator between us and big boxes,” Fennel said.