Experimentation in Physical Retail – What Works and What Doesn’t

In an era where e-commerce continues to grow, many brick-and-mortar retailers face the challenge of remaining relevant to their customers and worth visiting on the high street. Consumers now expect more than just a place to shop when they enter a physical store; they want experiences that are engaging, personalised, and immersive.

This shift in consumer expectations has led to a surge of real experimentation in physical retail stores as brands seek to redefine the role of their in-store experiences. Some retailers have successfully reinvented their physical stores, while others have struggled. So, how can retailers successfully experiment, and where do some go wrong?

Experimentation Matters!

Shopping habits are evolving, and physical stores must evolve too. Consumers can easily access online marketplaces and shop for almost anything from the comfort of their homes. Therefore, for physical retail to remain relevant and pervasive in the lives of consumers, it needs to create something unique—something that cannot be replicated online. This is where experiential retail comes in.

Experiential retail focuses on creating memorable in-store experiences that engage customers in new and exciting ways. As retailers, we know the goal is to foster brand loyalty and deeper connections by offering personalised, immersive experiences. However, when experimenting with store formats, it is essential to remain true to your brand—and it is incredibly easy to make mistakes.

The risks of experimentation are high. The wrong approach could alienate customers or fail to meet their expectations, leading to wasted resources and poor returns on investment. But when executed well, these experiments can differentiate a brand from all others and create a buzz that will not only boost foot traffic but reinvigorate the brand's identity and audience.

What Does Success Look Like?

Some brands have embraced innovation and successfully redefined what a physical store can be. These retailers have created unique shopping environments that attract customers and enhance brand loyalty. The key to their success? An understanding of what their audience values—whether it’s convenience, exclusivity, or engagement—and the ability to seamlessly blend those elements into the in-store experience itself. Below are some standout examples of retailers that have taken bold steps in experimentation and reaped the rewards.

Nike – House of Innovation

Nike’s House of Innovation is a tech-driven flagship store that exemplifies how technology and personalisation can transform the retail experience. With only three of these flagships across the globe—in New York City, Shanghai, and Paris—it’s clear that these locations are intended to be unique and exclusive. It is also clear from the name that these locations are designed to innovate the Nike retail offering.

With features like real-time inventory tracking, customisation stations for personalised shoes, and app integration, this store merges digital convenience with in-store shopping. It offers a seamless experience where customers can order online while in-store, create unique products on the spot, and even skip the checkout line by using the Nike app. This innovative approach enhances personalisation and omnichannel shopping, making the store an extension of the Nike brand rather than just a place to purchase trainers.

Nike has struggled in recent years, misreading consumer trends (something they have admitted to). But to their credit, their House of Innovation flagships not only display a willingness to experiment and adapt to the retail landscape, but they are also working! Shifting the focus from in-store transactions to a content-rich, experience-driven store, along with digital integration that generates consumer data to continuously improve customer experience, these flagships have raised the bar for physical retail.

Starbucks – Reserve Roastery

The Starbucks Reserve Roastery is a far cry from your average Starbucks location. Designed as a high-end, immersive coffee experience, this store features on-site roasting, mixology, and exclusive blends. The Roastery is Starbucks’ answer to the growing demand for an elevated experience, providing an opportunity for customers to witness the coffee-making process, explore a variety of rare brews, and engage with baristas who craft custom beverages.

These roasteries also represent a shift in the way Starbucks markets its products. Sometimes described as a Willy Wonka factory for coffee, these locations expose customers to the coffee-making process far beyond a barista bar and a quick cup of joe.

This premium coffee experience not only differentiates these locations from other Starbucks stores, it elevates their retail offering above their competitors and has made the Roastery a destination in its own right. The coffee industry is enormous, but it is also very saturated. As such, it is more important than ever to offer consumers something new—something they want. For a brand like Starbucks, customers want a new, less homogenised experience.

Selfridges – The Corner Shop

Selfridges has long been known for its commitment to pushing the boundaries of traditional retail, and The Corner Shop is a perfect example of how experimentation can successfully drive foot traffic and customer engagement. Situated within Selfridges’ flagship London store, The Corner Shop is a rotating retail space that allows different brands, designers, and artists to take over for limited periods, creating one-of-a-kind shopping experiences.

This concept taps into a fundamental consumer desire: novelty and exclusivity. Even in an era where online shopping offers convenience, Selfridges is uniquely positioned to provide a unique shopping environment—and they already do. Their enormous flagship is home to a cinema, a bar, a skate bowl, and more.

The Corner Shop delivers something that bridges the potential gap between experience and retail—a dynamic space that is completely transformed on a regular basis. Whether it’s a collaboration with a luxury fashion house, an avant-garde art installation, or a sustainability-focused retail experiment, customers are drawn back repeatedly, eager to see what’s next.

What makes The Corner Shop particularly successful is that it aligns with the shopping behaviours of modern consumers, particularly those who seek experiential retail and limited-edition products. Unlike traditional department stores that may have the same layout and offerings for years, Selfridges has created an environment where change is expected, making the store feel fresh and relevant.

Canada Goose – The Cold Room

Canada Goose’s The Cold Room is an incredible example of experience-based retailing for a high-end, established product. The brand offers customers the chance to test winter gear in a simulated -25°C room, allowing them to experience the performance of its jackets in real-life conditions. This immersive approach builds customer confidence in the brand’s products, as shoppers can directly feel the effectiveness of the gear. By making the shopping experience interactive and entirely focused on the success of the product and how it feels, Canada Goose strengthens its position as a leader in performance outerwear while providing their customers with an entirely individual experience.

What Can Go Wrong

While innovation in physical retail can lead to great success, not every experiment delivers the desired results. Some brands, in an attempt to stay ahead of trends or differentiate themselves, have introduced concepts that failed to resonate with customers. Whether due to poor execution, a misunderstanding of consumer needs, or an overreliance on technology, these missteps highlight the risks of retail experimentation. These kinds of mistakes can frustrate customers, damage brand perception, and even contribute to long-term financial struggles. Below are some notable examples of retail experiments that faced significant challenges, offering valuable lessons for retailers looking to innovate wisely.

ASOS – In-Store Experience

ASOS, a brand that built its reputation as a leading online fashion retailer, briefly experimented with a physical store in London, aiming to create a digital-first shopping experience in a brick-and-mortar setting. The store featured tablets where customers could browse the online range while in-store, reinforcing ASOS’s tech-driven approach to retail. However, this concept failed to resonate with customers for several reasons.

Firstly, ASOS’s core customer base was already highly comfortable with online shopping, meaning there was little incentive to visit a physical store that simply replicated the online experience. Unlike brands that use physical locations to offer unique experiences—such as Nike’s customisation stations or Selfridges’ rotating concepts—ASOS did not introduce anything tangible or interactive to enhance the shopping journey. Additionally, customers visiting a store often expect instant gratification—trying on and purchasing items on the spot—whereas ASOS’s model remained heavily dependent on online ordering.

Ultimately, the store’s failure highlighted the importance of offering something different in physical retail, rather than just extending an online model into a real-world setting without added value.

Sainsbury’s – Till-Free Store

Sainsbury’s took a bold step into retail innovation by launching a till-free store in London, aiming to streamline the shopping process using technology. Customers were expected to scan items on their smartphones and pay through an app, eliminating the need for traditional checkout areas. While this concept aligned with the growing trend of frictionless shopping, the reality proved far more challenging.

Many shoppers found the process confusing and cumbersome, particularly those who were less tech-savvy or unfamiliar with mobile payments. Some struggled with the app, while others preferred the familiarity and perceived security of traditional checkout systems. The lack of physical tills alienated cash-paying customers and those who encountered technical issues, leading to frustration rather than convenience.

Digital advancements can enhance efficiency, but retailers need to ensure that new systems cater to a broad customer base instead of creating new barriers. Sainsbury’s recognised the error that the till-free store had become and reintroduced tills, proving that sometimes, the simplest solutions remain the most effective.

Topshop – Virtual Reality

Topshop, once a dominant force in UK fashion retail, sought to integrate cutting-edge technology into its Oxford Street flagship store by jumping on the virtual reality (VR) shopping trend. The idea was to engage customers in an immersive, futuristic way, allowing them to explore collections in a digital space. However, it failed to provide clear value to the customer experience—they failed to align their innovation with their customers' desires.

Shoppers visiting physical fashion stores typically want to touch, try on, and experience clothing in real life—something VR inherently can’t replace. Instead of enhancing engagement, the VR experience felt detached from the natural shopping journey, with many customers seeing it as a novelty rather than an actual tool.

The failure of this experiment highlights a crucial lesson: technology should enhance the retail experience, not replace fundamental aspects of it. For fashion retailers, digital tools that aid personalisation, sizing, or styling can be very effective in customer engagement, but full-scale virtual experiences are perhaps a step too far.

House of Fraser – Personal Shopper Concept

The Personal Shopper Concept at House of Fraser allowed customers to book private consultations with stylists, aiming to offer a highly personalised, high-touch service.

The biggest challenge was that the service felt too exclusive and niche, catering only to a small segment of the brand's customers who valued personalised styling. The majority of shoppers visiting House of Fraser were looking for convenience and accessibility, rather than an appointment-based service that added extra steps to the shopping process.

This mistake once again highlights the importance of aligning retail experiments with customer demand. While luxury brands may find success in offering personal shopping experiences, a department store like House of Fraser needed a broader, more inclusive approach.

Key Takeaways for Retailers

So, what are the key takeaways for retailers considering experimenting with their physical stores?

• Align with Customer Expectations: Successful experiments are those that resonate with what your customers value. Whether it’s personalisation, sustainability, or convenience, ensure your experiment addresses a clear customer need.

  
  

• Tech Should Enhance, Not Replace: Technology can significantly enhance the shopping experience, but it should not overshadow the personal, human elements of retail. Don’t lose sight of what makes physical stores special—tactile, social, and sensory experiences.

  
  

• Test with Small-Scale Pop-Ups: Experimenting with pop-ups or smaller-scale versions of new concepts can be an excellent way to gauge customer response before committing to a full-scale rollout.

  
  

• Stay True to Your Brand: While it’s tempting to jump on the latest trends, make sure your store experiments align with your brand identity. Experimentation should enhance your brand, not distract from it.

Conclusion

The future of physical retail will be shaped by continued experimentation and innovation. Retailers must strike a balance between creativity and practicality, offering experiences that excite and engage customers while remaining aligned with their brand identity and what their customers truly want from physical retail. As e-commerce continues to grow, brick-and-mortar stores must provide something unique to stay competitive.

For retail store owners, the lesson is clear: experimentation can lead to great success if done thoughtfully and strategically. Test new ideas, embrace technology, and offer experiences that make customers want to step away from their screens and into your store.