The Power of Place: Why Physical Stores Matter

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I'm Bernadette Walsh, Marketing Partnerships Manager at Payments Consulting Network and Merchant Advisory. I'm coming to you from NRF Asia and Singapore. While our usual format features interviews with leaders in the payments industry, today I'm switching things up to explore the latest retail trends shaping the omnichannel landscape. My guest today has more than 20 years of experience leading retail transformation.

Alex Resvin, founder of the Retail Podcast, has driven global brand growth through innovative strategies. His leadership has produced $1.5 billion in new revenue and enhanced customer experiences worldwide. At Verizon, Alex built an innovative global retail consultancy that drove industry-wide change.

At Microsoft, he reinvented the UK retail sector, establishing himself as a leader in transformation. He also led store of the future projects for top brands such as Pandora, Target, Tesco, and many more. Welcome, Alex. Thank you.

What a fantastic introduction. Well, I thought it was time that you were in the seat for a change instead of being the... I love it. Okay.

So Alex, you've built a reputation for exploring retail markets worldwide and discovering what sets each apart. Brands are transforming physical stores from simple transaction points into a vibrant experiential hub. All holistic space is designed to foster deep emotional loyalty and a sense of community and belonging. I understand you've just returned from Milan, London, Madrid and Amsterdam.

And during your recent travels, have you encountered any standout examples of retail stores delivering innovative and surprising customer engagement? Yeah, no, absolutely. So thank you for the question. What was really interesting, when we started planning the trip, we had an idea, but where we started and where we finished are completely different than it.

And it challenged my own thinking about how I think about retail across the world or across Europe. And so what you find specifically in the APAC region, like Europe, you have these hotspots where you've got these mega cities like London. London was all driven by experiential pop-up. It was all about how am I going to make you feel through some form of experience in the store.

And a fantastic example of that was Coach that did an activation in Selfridges, which is an upmarket department store. But Coach is a legacy luxury handbag American brand that's now addressing the market in a new way where their relevance is mum and daughter as opposed to mum or daughter. So it's a brand that's crossing the generational divide through activations on experience. And I was like, man, that's really interesting how a brand with that depth and breadth is now thinking about experiential retail We have Louis Vuitton in the UK Obviously everyone aware of the Louis Vuitton in China the big boat in Shanghai.

In London, they had created a pop-up hotel. So it was like a hotel inspired luxury. Each floor had a different sort of theme, all related back to the product. So the theme wasn't some random theme around luxury.

It was, here's our, and I wish I knew the Louis Vuitton names of the different bags, but this floor is dedicated to this band. And then they had two restaurants, like a speakeasy bar that had that sort of 1940s vibe. It was incredible. And it's a pop-up, right?

So it's only going to be there for six months in a really beautiful part of London. But then you look at other European cities, Milan, a small community, but that was all around culture. That was all around, how do we get our customers who love fashion, who love music, who love highbrow, how do we get them to feel that they belong to that brand? And so the activations were a lot more subtle, but they're a lot more deeper.

And so it was all about dwell. All retailers would say, obviously, we want dwell, but how do we create that in that sort of fashion and music art? So it became, how do I create my store as a magazine where you can sit down and curate? And on the video, I've mentioned about 15,000 times, curated this.

But it was all about curation. And then we had Amsterdam, where we went to the House of Rituals, which was this beautiful example of how affordable luxury doesn't just need to be product. It's affordable luxury. They've got a...

They've got a restaurant there, a cafe there. They've got a cafe downstairs. Upstairs, they've got a mind oasis, where there's two treatments. It's affordable luxury.

It's like 50 bucks per treatment. But one's Hydro Massage, which is beautiful. you lie down and you get a massage. The other is sound beats, sound waves, or the rainforest.

You get a choice of binary beats or rainforest. But look, at the end of the day, they're supposed to be selling you product. And they're like, no, no, no. Come and have an experience with us.

It's like a wellness experience, isn't it? It's just incredible. Yeah. And so what I found, I mean, Amsterdam has one startup to every 600 residents.

So they've got that culture of fintech and startup. So it's not surprising that Rituals, a beauty brand, affordable luxury, is reshaping the model in European standards. And then you go to Madrid, where, you know, ultimately it's a tourist hotspot. People go on holiday.

They're used to maybe eating well, going and getting to suntan or going to the coast. But that city in its whole self is reinventing around retail as a destination, which I think for the APAC communities like Gentle Monster and one of the stores the Hoff flagship store that their CEO actually met the CEO of Gentle Monster was inspired and went back and they sell footwear to not just open another store he wanted to build a flagship store that was all about being a destination and yes there's a coffee shop yes you can get beautiful cheesecake there and buy some trainers or footwear but also hang out listen to some cool music have a look at some records It like a community there isn it Absolutely But more of a destination Whereas in Milan we were thinking about it as this sort of community They would all say they want community Every retailer wants a community But then when you see how they targeting that it looks different.

It's similar in Australia where we had Mecca, their flagship store in Melbourne, which they recent up in the last year. And it was like 4,000 square metres of Art Deco store. So they transformed that and I'm sure they've increased the foot traffic there in Bourke Street where it is. And they've got over 200 beauty products in more than 80 immersive services, including Cafe Masterclass.

So again, something for everyone, really. Do you see this trend increasing in years to come, like ensuring brick and mortar continues to have a presence in an increasingly automated world where, of course, we're worried about the AI coming into the retail space? Do you think it'll shape how we think and how we shop? Or do you think the AI, the tech side is the passing of that?

I think discovery, automation and back-end excellence will all be technology. But look at Shanghai, city of 22 million people. How do you drive relevance there? It's not through technology.

It's through activation. It's how do I make, give you some sort of delight? How do I make you smile? How do I make you inspired?

How do I make you want to hang out? And so I don't care what technology is going to come along. And experience has taught me it doesn't matter what the widget does. It's about how I, as a human, want to be inspired and what that feels like.

And yes, AI will come, but people will still strive for human connection. Yes, I agree with you there. In your experience, what psychological, emotional benefits do customers gain from shopping in-store that they can't find online, which I think you've pretty much touched on that? I think the quickest one, I have this beautiful analogy of if you've seen the movie Interstellar, when he goes to and I wish I could remember the name of the planet, he arrives on the planet.

Hans Zimmer does the soundtrack to it, that every second seconds is the equivalent to one year in the real world. That's the online world we live in. And people forget about that pace. And that's why Amazon does so well.

Right. Because I know what I want. I want to get there quickly. I want a good price for it.

And so there's these three elements of efficiency, discovery, all happening super quickly. I'm not saying in physical that doesn't happen. So your shopping mission could be a fast shop. But traditionally, in terms of system one, system two thinking, retail is about discovery and delight.

E-commerce for me is about execution. But look at pin interest. So people do want discovery and mood boards. But I think once you've got your mood board done, you're going to go into physical.

You're going to go and see how that looks on you. True. That's it. Okay.

Have you ever visited a store or pop-up that started online and then expanded into a physical space and did that well? And what was your impression? And did the physical location capture the same visual identity as the brand's online presence? Yeah, I think, look, Warby Parker, Fabletics, Boo Bloom in the UK.

And there was one in Amsterdam. And I wish I could remember, but I forgot. But there were never another set of opticians. There's someone who's wearing frames.

All of these brands were online brands DimShark online brand The only way that they can grow is by opening in physical So you get to your limit online and at that point you come to physical So that's why... It's a big investment for them. Absolutely. They brought some waters, a lot of investment, Dan, hoping that that will translate into sales.

But that's why pop-up works. You don't need to go all in and get that lease. A little taster. Correct.

And that's what a lot of sort of Shopify brands, a lot of these marketplace brands are doing. A little pop-up, get the community excited, get that interaction, and then keep pushing to go into your permanent residence. I've got two more questions for you. Sure.

I'll try and keep it quick. You moderated a panel yesterday. Yes. At NRF Asia, where we are.

You discussed how mega malls across various countries are evolving into retail tourism destinations, many now resembling Instagram-worthy theme parks. Department stores are unveiling their own versions of the store of tomorrow, creating unique and engaging experiences unavailable elsewhere. Every aspect from layouts to decor and design is thoughtfully being reviewed and optimised. Did any compelling insights emerge from your discussion yesterday?

I think the one thing I talk about shopping malls is dopamine villages. And so they are places where you go to have an experience. And now with your family, whether it's F&B, you're going for a food experience, whether you're going to electric go-karting, it has to be something that gets you excited. Yes, the shops, the anchor tenants are there, but it's no longer a one activity place.

It's a multi-activity place. And so they become villages. They become hubs. Very much like anyone like me in the 80s.

That's what it was. You'd go and hang out, have some food, see some clothes. Yeah. And I think thanks to Stranger Things, this new whole generation are like, I'd like to go and hang out.

Because who wants to play Fortnite for eight hours or Roblox? They'd want to go and hang out and do it in real life. And so therefore, go-karting or any of these types of experiences, water surfing, surfboarding or anything like that. Well, you know that we're essentially a payments company and we tend to have payments focused people on the podcast.

But I know it's not your area of expertise, but what have you experienced as you've traveled the world into different retail stores, the different types of payments and offering, whether that be online, anything you can. Yeah, I think the new theme, and this is really down to the payment technology providers, whether or not they can provide systems where your communities can come in through the POS transaction and, for example, build up points and loyalty. In the US, we're so used to credit card numbers being assigned to loyalty.

What we'll see now is that sort of expanding into an ecosystem where payments starts the journey, but then it connects you through to so many other areas. We're in the past that hasn't. Payments has just been payments. And now it's the gateway to connection in some elements.

And obviously what you've got here is palm pay, face pay, smile pay. Literally think about the form factor. And then you've got the whole buy now, pay later. So in terms of flexible micropayments, which is another massive trend that will continue to grow.

Alex, thank you very much. My pleasure. Thank you. Thank you for tuning in to Payments Beats.

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