The COVID-19 pandemic changed in-person retail shopping forever. Big-box stores have become quasi-fulfillment centers for online ordering, convenience has become the top priority for shoppers, and emerging technologies have permanently changed the ways shoppers browse and check out.
Despite the pandemic, luxury retail shoppers are still overwhelmingly shopping in person. In 2022, online luxury retail sales totaled about $24 billion in the US, while brick-and-mortar sales eclipsed $84 billion.
That said, luxury retail isn’t immune to change—experts estimate that online luxury sales will triple by 2025.
How should today’s luxury retail construction companies respond to the ongoing popularity of in-store shopping and the continued rise of digital sales? In this guide, we’re exploring four strategies retail construction brands should consider in the post-pandemic landscape.
#1 Leveraging eCommerce Concepts in Brick-and-Mortar Spaces
In a market where online sales are poised to rival brick-and-mortar sales, today’s retail construction contractors must help their clients stay competitive. One approach is incorporating popular ecommerce concepts into brick-and-mortar designs.
Online shopping offers customers a unique experience, but many of the functions customers love can be adapted into the brick-and-mortar format:
AR/VR – Augmented reality (AR) and virtual reality (VR) technologies are still growing, but they’ve already solidified their places in both ecommerce and in-person retail shopping. Today’s retail construction companies should consider incorporating spaces for VR/AR customer experiences into their building footprints to help their clients bring these innovative technologies to the brick-and-mortar realm.
Extended inventory options – Real-time inventory access is a key priority for online shoppers—people want to see every product option in every available color (and even sign up for alerts when out-of-stock products return to the shelves). While it might not be practical for brick-and-mortar stores to carry every product in every color and size in-store, contractors can incorporate tools like kiosks and tablets to give customers enhanced inventory access even while shopping in person. Many Lululemon stores have already adopted this approach.
#2 Embracing the Hybrid Space
For many luxury brands, retail stores are no longer just places to shop. Multiple brands have adopted some type of hybrid space model, creating multifunctional spaces where customers can enjoy more than just shopping experiences.
Consider two luxury retail examples:
Fabletics – A recently built Fabletics store in Walnut Creek, California incorporated a workout area into its retail footprint. While this space simply gives customers the ability to try out their athletic wear in an exercise setting, an innovative retail construction company could take this concept to the next level. An athleisure store, for instance, could feature room for a regular in-store yoga class.
Tommy Bahama – While they stumbled into the hybrid restaurant-retail space somewhat by accident, Tommy Bahama’s Marlin bars and full-service restaurants have proven successful. After refining the strategy at the original Naples, Florida location, Tommy Bahama expanded the restaurant-retail concept to stores in seven states.
Today’s retail construction companies should encourage their brick-and-mortar clients to think outside the box when it comes to space functionality.
#3 Integrating Health-Conscious Design
While the federal COVID-19 public health emergency ended in early May of 2023, only 49% of Americans think the pandemic is over., Many consumers have returned to their pre-pandemic activities, but a significant portion are still taking precautions.
Retail construction companies should take this continued concern into account as they guide their clients through the design and construction processes, incorporating health-conscious choices whenever possible. Consider using COVID-19 guidelines as a blueprint:
Sanitizing stations – A 2023 survey determined that 93% of Americans believe handwashing is important for their health, and 58% of respondents make a point to wash their hands after touching a shopping cart. While adding handwashing stations throughout a retail store might not be practical, consider hand sanitizer dispensers in sensible locations (like the fitting rooms and checkout areas).
Enhanced cleaning – While keeping a store clean can reduce infectious disease transmission and protect customers’ health, data shows that maintaining a clean retail space can positively impact sales. Nine out of ten consumers say that a clean store environment increases their chances of making a purchase. Consider incorporating cleaning supply storage throughout a retail store for increased ease of access for workers.
Touchless pay – The in-person checkout process has changed drastically in the wake of the pandemic. Visa alone processed an estimated $13 trillion in contactless payments in 2022, and 30% of US consumers used a mobile wallet at least once during the same year. Retail construction contractors should encourage their clients to embrace touchless payments and other innovative checkout technologies (like RFID systems and mobile transaction support) to remain competitive, offer customers a convenient checkout process, and optimize checkout space planning.
#4 Controlling Costs Proactively
The considerations above have mostly spanned design and space-related strategies for luxury retail in the post-pandemic era. But builders should also consider how the pandemic and its aftermath have shaped the construction process, especially in relation to cost control.
Experts anticipate a slowdown in construction industry activity in 2023 due to increased economic uncertainty for both commercial and residential clients. For customers that do invest in new facilities or upgrades, builders should take great care to keep projects on budget. For today’s retail construction companies, that could look like:
Adding contingent allowances – Inflation, fluctuating materials costs, and trade labor shortages continue their deep impact on the construction industry post-pandemic. To help address clients’ concerns about changing costs, consider implementing contingent allowances to cover unexpected costs during the construction process, especially for large-scale projects with extended schedules.
Leveraging tech tools – Software tools for estimating, materials takeoffs, and cost tracking have the potential to help both builders and their clients save on projects. Quality estimating can help companies provide more accurate pricing to clients, more precise takeoffs can prevent errors in materials purchases, and cost-tracking tools can help project managers stay on budget throughout the life of a project.
In a cost-conscious world, the construction industry must adapt to protect their own financial interests and help clients make cost-effective facilities investments.
Explore the Possibilities of Post-Pandemic Retail with Pacific Wide Builders
COVID changed the landscapes of both retail and construction, and today’s luxury retail construction companies simply must embrace new approaches and technologies to keep delivering quality projects to clients. Incorporating ecommerce strategies into brick-and-mortar, considering hybrid space designs, making health and cleanliness-conscious design choices, and proactively managing costs can all help builders and their clients continue to thrive in 2023 and beyond.
At Pacific Wide Builders, we’re excited about the continued evolution of the construction and luxury retail industries—but our dedication to excellence hasn’t changed. If you’re looking for a general contractor with integrity and a commitment to quality, we’re the perfect fit for your next project.
Take a look at our past projects to get a taste of what we can do. And when you’re ready to bring your dream retail store to life, reach out to our team.
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