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Is this the end of the road for physical retail shops? by 0813 studio interior designs Sydney and retail transformation specialist.

In this article, we discuss the current retail climate in Australia and retail transformation strategies.

Have you heard the news about Myer and David Jones? They are  not alone! It's the entire physical retail world! The 'silent catastrophe' has started, from supermarket mogul - Woolies and Coles, to department store Myer and DJ, to even retail banking sector - Bankwest just closed 29 branches east-coast. Empty trading floors, lack of foot-traffic, low margin transactions or no transaction; while physical retail shops / department stores are burning dollars with utility bills, rents and labor cost. On financial balance sheet, it starts to look a bit red, a.k.a. less cash-in more cash-out. Almost everyone agrees that change is a must, retail transformation is a must. 

Why is there less interest or no interest in physical retail shops any more?

There are multiple reasons just like every other problem in the world. One of the main reasons is development of online shopping in recent years. Online shopping is nothing new to Australian market, but these days online virtual retailers offer the exact same products and services with convenience and most of times less cost. Customers also get a variety of options online. Online retailers won't need any fancy stores to display or large amount of shop assistants. Ever saw the email ad 'Click Frenzy'?

Other reasons are: overall lack of confidence over market, overall less shopping power from customers that lead them tend to shop in a cost-driven pattern... to name a few.

Retail transformation 101: The purpose of retail physical shops has shifted to customer experience and marketing.

The million dollar question: Is this the end of physical retailers? If not, how to attract customers back to physical stores and increase the quality transaction volume?

We know the conventional discount strategy won't work anymore! There was a time when sales only happened on holidays and end of financial year, now it has become a norm that 20% off sale happens every day and above 50% off is definitely expected during holiday season. I went to this discount floor which was the recent effort from this department store. Every items had been marked down 50% - 70% off and then a further 40% off if purchasing 5 items in one transaction! The problems are: 1) even with this huge discount, the whole trading floor there was only me and no other customer around! 2) yes, indeed I bought 6 items in one transaction, but this was an extremely low margin transaction, only screaming out loud the message that this department just wants to clear the stock.

Then what works now? 

Let's forget about the traditional retail activity (buying and selling) for a second, as this can be easily replaced by online shopping. The purpose of physical retail shops need to be fundamentally changed. While buying and selling activity will still be a part, the emphasis of human interaction will be predominant; through which attracts customers to have the retail experience that online shopping cannot provide. Take Apple store as an example. Through the years we witness the development of Apple concept stores by combining traditional retail activity with customer interaction space, like experience bench, learning centre and genius bar. Have you even seen an empty Apple store, like ever? All Apple shop assistants are friendly, easy to chat, knowledgeable with their products inside out, happy to have a random conversation. Never have I been encountered with anyone pushing me to buy anything, instead they would just greet and let me lead the conversations, try anything or ask any questions. All in all, for physical shops it is not about the sales any more, it is about increasing foot traffic, lifting customer experience, building up the trust to the brand, products and shop assistants, and 'selling' a better branding image so that customers could relate to the brand and start interaction, come back or later purchase online.

In summary, the purpose of retail physical shops has shifted to customer experience and marketing.


The purpose of physical retail is fundamentally changed.

While buying and selling activities will still be a part, the emphasis of customer experience, marketing and human interaction will be predominant.

How can we save physical retails? Ahhhh, the good old topic of retail transformation strategy. This is certainly not a 'one-size-fits-all' situation, but there are some ground rules to follow:

  • Market analysis first before spending cash! Question yourself - What are your target customers? What do they like? What make them start talking about your brand/shop and start interaction? What method of interaction would they like? What do your peers in the field do these days?

  • Re-design. Re-configure. Be open to ideas of multi-functional space, rather than traditional sales racks and display units. For example, have you thought about getting a small cafe counter in your retail banking? Have you thought about including customer training program in your tech shop?

  • Be trendy, or even better be original - create a new trend. From design point of view, tired of dark metal, brick veneer, concrete flooring? Start a new trend now, how about a shop with minimalism design? How about you pick a feature color and make it a theme? There are limitless of options and combinations.

  • Start with one store to test the field. Do a performance study after 6 months and 1 year. Do not do a national roll-out. 

  • Embrace the online digitalisation. Have a well maintained virtual selling platform and a good supporting team, that includes logistics.

  • Fully utilise the social media platforms to generate leads, topics, attractions, especially among younger generation.

  • Use your current resources, get some sponsors and use trading floor to host events. For Myer or DJ, a fashion show with all clothing ready to buy in stores might be an option.

  • Create some WOW factors and/or WOW moments for customers to talk about.


We don't believe it is the end of physical retailers, but certain level of transformation is a must and we suggest taking proactive actions sooner rather than later. Remember:

  • Embrace the change and think outside-the-box.

  • Be bold

  • Be flexible

  • Be persevere

  • Accept this is a long battle

We have abundant experience of retail transformation, providing clients with strategies and designs catering for their own business. Let's start with a free consultation. For more information, please contact: / +61 433 329 799

Please also have a read of our methodology page and retail hospitality interior design page to find out how we could give you some real support on your retail project design and delivery, as well as retail transformation strategies. 

Contact us.



mobile: +61 433 329 799

address: lvl 2, 65-71 belmore road, randwick, nsw 2031

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monday - friday: 9:00 - 17:00

weekends: by appointments

please give us a call to book your one on one appointment and free consultation.

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