THE BIG IDEA: In a demanding retail environment where customers shop online more frequently, retailers with physical spaces have an opportunity to create atmospheres where customers want to gather, not just shop.
You have an hour to meet with a friend to catch up.
Or, you and a colleague want to brainstorm a new product idea outside of the office.
Or, you have a free Saturday out with your two daughters.
Where do you go?
Our primary and most familiar setting is our home. The second most familiar is our workplace. We most often interact in these two places.
The Third Place
Sociologist Ray Oldenburg coined the term “third place” to distinguish a location where people meet and gather outside the home and office.
Neuroscience continues to confirm Aristotle’s observation: we are social animals. Social animals have a need to gather, connect, and interact with one another.
As we’ve learned from Maslow’s work, we all share the basic human need to feel like we belong.
But where can we gather? On a warm, sunny day, we can go to a park. The rest of the time (especially for most urbanites), we end up at Starbucks.
Food and Drink
Starbucks consciously used the third place concept to insert itself into the American urban landscape more swiftly than any retailer in history. CEO Howard Schultz came to the idea after a trip to Italy in 1983 where he was inspired by their coffee bars and the gestalt of the Italian coffee experience.
Third places often involve food and drink. Not only does eating and drinking support basic biological needs, eating and drinking together help strengthen social bonds.
Not surprisingly, many retailers have integrated food and drink into their in-store experience. IKEA sports its own restaurant at numerous locations. Whole Food Market goes a step further, offering juice bars, icecream stations, self-serve hot food with cafeteria seating, and even a wine bar. Numerous retailers, including Barnes & Noble, have licensed Starbucks stores within their retail spaces.
What would your local mall be without a food court? It’s in the space between the mall’s stores that provide an atmosphere to gather, especially if you’re a teenage mallrat.
Creating a third place, however, isn’t just about having food and drink. Costco, Target, Wal-Mart, and Sam’s Club have their own eateries in most locations, but you’re unlikely to want to hangout there.
Panera Bread Company, in contrast, has consciously created a warm, cozy atmosphere with comfortable seating. Their environment invites you to stay, catch up with friends, check your email, or read a book.
A Dark Future For Brick and Mortar Retail?
Will the Internet eventually make retail locations obsolete?
It’s a familiar question to any executive that trudged through the early days of the Internet jungle. Dotcoms were in. Brick and mortars were dinosaurs.
Then, the initial Internet hysteria broke. The future of retail didn’t look so dim. Hybrid terms like “click and mortar” and “brick and click” came into being. Happily, we haven’t seen those terms in print lately. (Until now. Sorry about that.)
But this question on the future of physical retail space seems more relevant now. With total B2C online shopping sales in the U.S. expected to hit $304 billion this year and mobile sales estimated to reach $114 billion (a 60% increase over last year), it’s fair to question the future of physical retail.
Amazon.com’s annual revenue is expected to break $100 billion this year. With free shipping, ultra-fast service, unparalleled product selection, a massive community of product reviewers, competitive pricing, and superior customer service, they are a force to be reckoned with.
A Shining Light in Retail’s Future
With the convenience of online shopping on Amazon.com and the rest of the big box retail family, do customer’s have a reason to enter your store?
For many retailers, the answer is no. Retailers with environments set up solely to convert the next transaction will likely continue to become less relevant to their customers.
Remember that humans need places to gather. Your customers want to feel like they belong. This need represents a tremendous opportunity for smart, customer-oriented retailers.
The Opportunity for Savvy Retailers
When you think of a 65-foot ferris wheel, simulation shooting galleries, roller ball bowling alleys, a 16-gallon saltwater fish tank, sports simulation games, and 24 flavors of homemade fudge, you probably don’t think of retail.
But if you’re a customer of Scheels, living within driving distance of one of their 24 locations, that’s your shopping experience.
With over 200,000 square feet of retail space, you aren’t just entering a big store, you’re entering the Scheels experience. And you’re not doing it alone: You’re taking your whole family. It’s a destination, a really big third place.
Customers travel from far distances with their family to go to Scheels. Sure, they can buy their family’s sporting goods and apparel online or at a local Sports Authority. But why just go shopping when you can see your kids light up on a ferris wheel or mesmerized looking at Nemo’s family in a massive fish tank?
The opportunity for retail may very well be in retail’s real estate. Retailers with physical space have an extraordinary opportunity to create spaces that offer meaningful experiences for their customers.
With thoughtfulness, creativity, and inspiration, you can cultivate a third place where your customers don’t just shop, but also gather and connect.
How are you making your customers feel at home when they enter your space?
Are you creating a meaningful experience for them?
Do your customers have a reason to return to your store again and again?