The Retail Multiverse as a Survival Strategy for Downtown Retailing

Corona and digital services have changed customer behavior. Deliveries happen promptly and to the front door, online services such as "Guerrillas" and new options such as on-site self-check-in make the power of convenience very clear. The instant delivery of groceries and food within 10 to 30 minutes represents a real challenge for retailers and will shift priorities in the customer journey - from a long-standing relationship (loyalty) and the familiar contact to convenience and simplicity. Retailers should respond to these challenges.

Convenience and "fast retail" will challenge the retail as new customer experiences. If we can get a product delivered to our door within half an hour, why would we still visit a retail store? Simplicity and convenience will triumph over loyalty, if products and services from competitors are easier to acquire or to experience.

On the physical side of the experience, a whopping 90 percent of all customers look forward to returning to shop downtown at local retailers. 46 percent want to go to restaurants and cafes. The most important thing is and has been, to meet in a welcoming environment to exchange ideas. Diversity and a unique character got lost in many cities. “Monocultural" offers left city centers deserted after hours. Parallel to the emerging e-commerce, customers were increasingly looking for specialist stores and destinations that met their need for individuality.

Customers have long expected experience shopping with a great variety and diversity, mixed uses, short distances, and offerings that are more than mere presentations of goods and that turn a stay on site into an experience. In Germany, shopping temples such as KaDeWe (Berlin), Oberpollinger (Munich) or Breuninger (Stuttgart) use this recipe for success. They are destinations with gastronomic offerings, shopping services and a sophisticated calendar of events. As affordable residential space tends to become increasingly scarce, "third place living" is becoming more and more important: the café, the lounge or the park bench supplement or replace what is missing in apartments: space for community.

The thirst for community is not only noticeable in the physical world. The rise of digital worlds gives new meaning to communities and shows what the future holds for the development of Web 3.

The gaming industry has paved the way and created multiplayer worlds where users can interact, complete tasks, find friends and, in some cases, even get married. Games such as "World of Warcraft," "GTA," and "Second Life" provided the first blueprints for how people could interact online via an avatar and what the experience could look like. 

We can argue that part of the generation of the Millennials is prepared for the metaverse because of their previous experiences or touch points with the gaming industry. We can assume the same for the Generation Z and Generation Alpha as "new" gaming worlds are launched that have integrated different interaction styles like Fortnite and Roblox.

Right now, it seems as if the fashion industry is leading the way and luxury brands are transferring a trend from the real world to the digital world:

Due to this online presence in digital worlds, it is no wonder that celebrities and brands use the exploding communities as a marketing arena: Ariana Grande with her Fortnite-Tour or Gucci with designs for [i]. The luxury brand is translating a trend from the real into the digital world: our external appearance determines how we are perceived by the community. In the digital world, of course, we can create a whole new personality, an avatar that shows how we want to be seen. For gamers, this perception can be more important than the game itself, as brands facilitate change and acquire new brand loyalty.

How sustainable will the metaverse determine our lives? We will have to wait and see to what extent its icons and avatars will hold their own in the long term. Or whether the desire for real experience will not prevail after all and proxy life will remain only an intermezzo. As we are only at the beginning, the challenges of further developing digital communities and metaverses will be determined by the acceptance of the customers and developers.

We believe that the lack of experience in recent years has created a desire for a shared sense of belonging. Generation Z pushes to meet friends again in schools and universities, visit bars and clubs and party all night, while Millennials and the Generation X were coping better with staying at home. But they long for familiar routes, even if the old normality may no longer materialize: shopping trips, visits to cafés or weekend excursions to Paris, Amsterdam or Milan. Travel is arguably becoming more sustainable, more conscious, but it's still about exploring new territories.

They expect retail to provide impetus and inspiration for their thirst for experience and they shifted to discovering unique stores while traveling. The challenge we derive from this, is: How can local retailers create an experience as unique as a vacation trip?

Surveys suggest that almost half of those surveyed would like to buy more sustainable and environmentally friendly brands in the future: This corresponds to an increased awareness of corporate culture issues, i.e. questions about how entrepreneurs care for their employees, what they really stand for and what they give (back) to the community ("Purpose"). In the long term, globally active companies will have to face the question of what contribution they make to society as a whole. A holistic approach, that encompasses all dimensions of sustainability, is required. Nowadays especially its social dimension is almost on a par with economic and ecological aspects.

What does this mean for brands?

1. Sustainability has to be lived, but also communicated. More than one-third of the consumers wants more information about the sustainability of brands. Communicating sustainability at the point of sale does not only catch the attention of attentive consumers, but also empowers them to take better decisions.

2. Brands should place special emphasis on engaging the local community. Collaboration with (other) local businesses and shared spaces that can be used by all create a sense of belonging and foster mutual understanding between brand and customer.

The challenge for the brand industry and its creators is circular value creation. Customers will not compromise on brand and quality standards but will place increased demands on reusable materials and circular design. This presents designers with the task of intensively addressing the holistic requirements of a Circular Society and its consumers.