Retail: recovery and rebuilding

Becky Mailen at I-AM describes how retailers can recover and rebuild emotional connections with their customers

 

Retail hasn’t had the best start to 2025. Sales slumps have persisted since late 2024, marking the worst Christmas since 2013 for supermarkets and food stores. The sector’s crucial “golden quarter” was conspicuously absent.

 

Fashion performed better: textile, clothing, and footwear stores saw a 4.4% sales rise in recent months, but things are far from rosy. Primark’s sales fell for the first time since the pandemic, for instance, dropping 6% in late 2024.

 

Retailers now face a crucial question: how to recover and rebuild? The answer is simple: retailers need to build real emotional connection with customers. Physical spaces should be living, breathing entities that prioritise tactile product engagement and celebrate human interaction – apps and websites can never replicate that. 

 

The ability to evoke emotions through immersive multisensory experiences will not just attract footfall but build lasting customer loyalty. Out with transactional, in with emotional.

 

Senses and sensibilities

Retailers have long sought to build emotional resonance by engaging shoppers’ senses. Shop windows traditionally used aspirational displays or practical reminders; and countless high street fashion brands use bespoke music playlists to draw in target consumers – and either keep them browsing or efficiently guide them to checkout, for instance.

 

And a growing number are thinking about how to merge senses. Aesop, for instance, creates its refined vibe by carefully balancing its signature neutral, earthy tones with a calming, subtle scent profile to create a sense of serenity. Its carefully curated fragrances align seamlessly with its design philosophy, reinforcing an experience of understated luxury and tranquility.

 

Similarly, Lululemon stores take a multisensorial approach: its physical stores bolster the brand’s wellbeing-centric messaging by blending fresh, clean scents that evoke energy and movement with carefully curated music playlists which do the same. Crucially, each and every sensory element not only enhances both product appeal and emotional connection, but aligns perfectly with Lululemon’s overarching brand identity, ensuring a seamless customer experience wherever and however people are interacting with the brand.

 

For retailers striving to reconnect with their audiences, sensory branding can be a powerful tool – but only if the acoustic and sensory atmosphere is authentic, enhancing the store experience and creating emotional resonance while connecting to its core values.

 

Community-centric spaces

Brands should be focusing more on building communities in their stores. By offering genuinely useful spaces that can flex across sites - think coffee mornings, fitness classes, youth clubs, or swap shops - retailers can build stronger ties with their local communities in ways that benefit their whole range of target consumers.  

 

Look at how Gymshark has taken this approach to drive long-term brand loyalty. Its stores host workout classes and meetups with fitness influencers, aligning the environment with its brand ethos and building a loyal fitness community.

 

People engage with experiential zones where they can try or play with products. Glossier’s “Realms of You” pop-up offered immersive beauty experiences that fostered belonging and self-expression, resulting in lasting emotional connections. Similarly, LEGO’s Piece Garden pop-up invited customers to play and create in a calming, interactive space.

 

Tech, curation and storytelling

Technology can support this community development. Look at ways to use AI, AR and VR to merge digital and physical worlds and create innovative, highly personalised shopping experiences that encourage in-store footfall. 

 

Nike’s House of Innovation stores are a great example. At a basic level, shoppers can access exclusive content and product updates through scanning items with the Nike app, and AI tools are used for a deeper level of personalisation. But these stores (currently only found in Paris, New York and Shanghai) go a lot further than that: AR is harnessed for customers to visualise how different sneakers will look on their feet before buying; while VR spaces immerse customers in the brand’s storytelling, offering behind-the-scenes insights into things like the products’ design process and Nike’s athlete collaborations. 

 

Nike’s use here of cutting-edge tech isn’t just a gimmick: it transforms the act of shopping into an experience that feels interactive and deeply personal. 

 

In the same way, we can think about how we curate our stores. Where once shoppers valued choice and abundance, today that’s all online and they come in store for recommendations and expert curation. Think about how each store can showcase product ranges relevant to that specific site and location.

 

Finally, look for ways to tell stories. People want to be part of a story, and stores that use visual displays or layouts to create resonant narratives that both reflect the brand’s core values, and align with the customer’s aspirations, will make them want to visit, come again, and tell their friends about it.

 

Build communities, build memories

Such changes are obviously not without their challenges: limited budgets, reluctance to deviate from traditional sales models, and the biggest barrier of all, the convenience of online retail.

 

It is challenging for physical retail to keep up with online stores, however by rethinking physical store spaces as places for creativity and community, retailers can turn the tide on declining sales and position themselves for success in 2025 and beyond.

 

Bricks and mortar is getting squishy. It has feelings. Crucially for brands, it makes memories that’ll last for years.

 

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Becky Mailen is Client Business Director at I-AM

 

Main image courtesy of iStockPhoto.com and jacoblund