An outline of my theories around different retail formats and the value proposition that leads some retailers to success and others to failure. Includes a hypothesis of how physical retailers can successfully differentiate themselves from the competition of other retailers and the ever-growing challenge of online retail.

2. Physical Retail Formats
Format Proposition Aim Competitive Advantage Critical Success Factors Example
Lifestyle
Curator
Edited by experts
– trust the we
know you and
your
style/lifestyle
Provide a
carefully edited
selection of
products and/or
services to a
specific
consumer group
• Provide products, brands and/or
services that others cannot
• Stay ahead of the competition –
faster to market with new trends
or essential items
• Credible and trusted reputation
• Seen as ‘one of the tribe’
• Product and environment must make shoppers feel like they
belong
• Price competitiveness is not the main driving factor for sales
• Complementary channels (digital, social etc.) optimised to
nurture, inform and inspire shoppers
JD Sports
Specialist
Curator
One-stop-shop
for a particular
need, hobby or
purpose
Deliver
everything that
the shopper
needs under one
roof, combining
products and
services
• Comprehensive and carefully
selected combination of products
and services that cater to the chosen
category, interest or hobby
• Deep knowledge of the hobby, category or need
• All staff are experts and ‘live the proposition’
• Carefully selected range of relevant products and services,
ideally including hard to find and/or obscure items
• Complementary channels optimised to provide greater
service, deeper knowledge/information, community building
and quick access to hard to find items
REI
Eclectic
Curator
A place of
discovery
Combine an
eclectic mix of
products/
categories to
attract shoppers
and inspire a
trend focused
shopper
• Provides inspiration for the shopper,
enabling them to discover new
‘finds’ that relate to their
world/preferences
• Clear understanding of the target shopper
• A store environment that is able to successfully bring
together an eclectic mix of products under one roof
• Highly trend led – must be absolutely up to date with the
latest trends
• Newness vitally important for fickle shoppers
Urban
Outfitters

3. Physical Retail Formats
Format Proposition Aim Competitive Advantage Critical Success Factors Example
Experience
Centre
Try before you
buy – no
obligation!
Build a close
bond between
product/service
and the shopper
so that they can
buy with
confidence
• Be the only/best place where
shoppers can experience the
brand/products/services to the
deepest level of detail
• Be both educational and entertaining
• Service focused around expert product/service knowledge
• Deliver a personalised service experience – how this
product/service fits into your life/can help you
Apple
Brand
Showcase
Get to know the
brand like never
before
A showcase for
the brand to let
shoppers
discover its world
and
products/services
• Outstanding presentation and
storytelling
• Interactively brings the brand, its
products and services to life
• Staffed with passionate brand
advocates
• Ensure that the same experience is
not widely available elsewhere
• Provides a far reaching halo effect that positively impacts
all other sales channels
• Communicates brand first
• Gets shoppers talking and drives high levels of word of
mouth
• Powerful, compelling and emotional experience that
resonates well with shoppers and makes them feel
connected to the brand
Nike House of
Innovation
Portal
Physical
connection to a
digital world
Bring the best of
what physical
retail offers to a
predominantly
digital or virtual
product/service
• Seamlessly connects to and works
with the online proposition, feeling
like one joined up journey from
start to finish
• Brings more people to the online
platform, growing online traffic
numbers and frequency of visit
• Enhances the shopper’s experience of the online
proposition
• Creates greater awareness of the online products/services
• Helps to expose lesser known aspects of the business that
are harder to communicate effectively in the online world
• Puts a human face on a digital business and builds on the
advantages of having real people to deliver a service
Pro-Direct
Soccer, London

4. Physical Retail Formats
Format Proposition Aim Competitive Advantage Critical Success Factors Example
Atelier
Showcase for the
artisan
Showcase the
artisan’s skills
and sell their
‘made on the
premises’
products
• Unique products/services that
cannot be replicated elsewhere
• Reputation for and clear demonstration of the skills and
craftmanship required to make the products
• Exclusive, high quality products
• Limited range
• Made on the premises/locally sourced
3x1 NYC
Atelier
Reproduction
Welcome to the
world of the
original artisan
Experience the
products/services
in the same way
that the artist
originally
intended
• Retains the essence and quality of
the original
• Provides the same unique
products/services that the original
Atelier does
• The ‘reproduction’ must retain the same qualities as the
original Atelier
• Products must be sourced/produced in the same way as
the original Atelier
• Staff working in the Atelier Reproduction must be trained
to the same high standards – they are effectively
apprentices of the original artist
Daylesford
Workshop
Shopper
participation
Get shoppers
actively involved
in the brand’s
activities,
products and/or
services to co-
create, learn,
have fun and
purchase
• Personalised/customised products
and/or services, tailored to the
shopper
• Fun experiences that almost
guarantee a sale
• Is a ‘rite of passage’ or an absolute
‘must experience’ for the target
audience
• Activities must be part and parcel of the brand’s core offer
or integral to how the product is used
• End product must be genuinely useful and/or better than
what could have been bought off the shelf
• The proposition/experience and the end product become
talking points for the shopper
American Girl
Place

5. Physical Retail Formats
Format Proposition Aim Competitive Advantage Critical Success Factors Example
Fulfilment
Centre
Value, breadth of
range and
convenience
Provide a broad and
deep product range to
the mass market at
highly competitive
prices
• Never out of stock on key items
• Highly price competitive
• High levels of convenience
• Offers plenty of ‘no frills basics’ to provide
supreme value
• Strong reputation for ‘right product, right
price, right place’
• All channels optimised to offer supreme
service, value and convenience
• Careful but thorough trimming of operating
costs to drive greater consumer value
• Not obsessed with latest trends
Primark
Marketplace
A platform that
sells directly
and/or offers
others the
opportunity to
sell from its
space/platform
By offering others the
opportunity to use its
space, the marketplace
is able to extend its
offering, provide
greater choice,
competitiveness or
experience to the
shopper
• The right choice of partners, helping to
provide a more comprehensive offer or
greater value, while driving down costs for
the business
• Other brands/retailers are able to utilise the
marketplace’s infrastructure and services,
enabling them to offer something or access
a shopper that they otherwise cannot
• A well integrated back end infrastructure
that creates a seamless shopper experience
All partners together create cost synergies
and an overall saving to the operating costs
of the business
• A proposition that is greater than the ‘sum
of its parts’, offering something that the
individual businesses could otherwise not
achieve alone
Farfetch Store
of the Future
Service
Centre
Top class face to
face service
Provide instant service
to the shopper, solving
their problems
immediately
• Provides education as well as service
• Provides a level of service that cannot be
obtained elsewhere
• Faster, more convenient and/or cheaper
than other solutions
• Fast and friendly
• Staff empowered to solve problems
• One-stop destination – requirements are
solved there and then rather than at a later
date
• Easily accessible – convenient locations
Warby Parker

6. Physical Retail Formats – The Differentiator Grid
Product
Specialist
Range built
around a selected
category/
product type
Lifestyle/Eclectic
Curator
Range built
around a shopper
lifestyle
Generalist/
Marketplace
Focus on breadth
and depth of
selection
Levelofproductcuration/specialisation
Level of experience/interactivity
The product specialist curates a carefully
selected range based on the technical nature
of the products and the specific requirements
they fulfil, ideally combining wants and needs.
Range generally changes in-line with product
development.
The lifestyle/eclectic curator understands their
shoppers’ desires and creates a collection of
products to match, often based on a deep
understanding of latest trends. Range
generally changes frequently, in-line with
[fashion] trends.
The generalist understands their shoppers’
needs and creates a broad range based on
choice and selection. Range generally changes
infrequently.
Service levels and the amount of space given
to non-product areas generally increase along
this axis. At the same time, the focus on price
being the competitive advantage generally
decreases.
The formats on this scale often include some
or all of the aspects of the formats preceding
them (i.e. a Workshop is also a service centre,
an experience centre and a showcase).
Experience
Centre
Product
Interaction
Showcase
Presentation
& Storytelling
Fulfilment
Centre
Price &
Convenience
Workshop
Engagement &
Fun Factor
Service Centre
Problem solving

7. Physical Retail Formats – The Differentiator Grid
High levels of product differentiation, low levels of
experience differentiation
Medium risk of proposition losing sales to online/other
retailers
Low level of product and experience differentiation
High Risk of non-differentiated proposition losing sales to
online/other retailers
High levels of product and experience differentiation
Highly differentiated proposition with lowest risk of losing
sales to online/other retailers
Low level of product differentiation, high levels of
experience differentiation
Medium risk of proposition losing sales to online/other
retailers
Level of risk that online can
replicate the value
proposition, meaning that
an increasing amount of
shoppers convert online.
High Low
Product
Specialist
Range built
around a selected
category/
product type
Lifestyle/Eclectic
Curator
Range built
around a shopper
lifestyle
Generalist/
Marketplace
Focus on breadth
and depth of
selection
Levelofproductcuration/specialisation
Level of experience/interactivity
Experience
Centre
Product
Interaction
Showcase
Presentation
& Storytelling
Fulfilment
Centre
Price &
Convenience
Workshop
Engagement &
Fun Factor
Service Centre
Problem solving

8. Physical Retail Formats – Identifying the Key Battlegrounds
Key
Battleground:
Price
Key
Battleground:
Make shoppers
feel part of the
‘tribe’ (and be
prepared to
make others feel
that they are not)
Key
Battleground:
Staff: Product
knowledge,
passion for the
product and
ability to fully
demonstrate the
product in detail
Key
Battleground:
Quality of service
& shopper’s trust
in your capability
to solve their
problems
Key
Battleground:
Enjoyment / fun
Product
Specialist
Range built
around a selected
category/
product type
Lifestyle/Eclectic
Curator
Range built
around a shopper
lifestyle
Generalist/
Marketplace
Focus on breadth
and depth of
selection
Levelofproductcuration/specialisation
Level of experience/interactivity
Experience
Centre
Product
Interaction
Showcase
Presentation
& Storytelling
Fulfilment
Centre
Price &
Convenience
Workshop
Engagement &
Fun Factor
Service Centre
Problem solving
Level of risk that online can
replicate the value
proposition, meaning that
an increasing amount of
shoppers convert online.
High Low

9. Physical Retail Formats – Example Retailers
Product
Specialist
Range built
around a selected
category/
product type
Lifestyle/Eclectic
Curator
Range built
around a shopper
lifestyle
Generalist/
Marketplace
Focus on breadth
and depth of
selection
Levelofproductcuration/specialisation
Level of experience/interactivity
Experience
Centre
Product
Interaction
Showcase
Presentation
& Storytelling
Fulfilment
Centre
Price &
Convenience
Workshop
Engagement &
Fun Factor
Service Centre
Problem solving
Level of risk that online can
replicate the value
proposition, meaning that
an increasing amount of
shoppers convert online.
High Low