Physical space is back in vogue, it seems. Just look at the latest investments in bricks and mortar by digital-first brands such as Amazon, Wayfair and even Netflix. In the shift we’re now seeing, however, lies important lessons for all brands – upstart and legacy, old and new.

Talk of the resurgence of interest in physical brand impact, especially in retail, and that old line ‘what goes around comes around’ might spring to mind. But there’s way more to this than a cyclical fad if you dig deeper into what’s happened over the past ten years.

In the run up to 2020, we saw the steady rise of digital. Next, thanks to Covid-19, this pace of change rapidly accelerated. Then, the cost-of-living and supply chain concerns ramped this up ever further. And the result? An over-indexing on digital led to an obsessive pursuit of the holy grail of utilitarian function by many brand owners at the cost of human experience. And this has led to the course correction needed by so many brands today.

I’m not talking about a reversal, no. Rather, I’m talking about a re-balancing – between digital efficiency on the right hand side, emotional storytelling through an ecosystem of connected human experiences on the left – and a re-emphasis on both. The number of brands now stopping to take stock and work out how best to do this is interesting – and the number of digital-first brands now doing the same is perhaps more so.

In Milan, for example, Amazon recently opened Amazon Parafarmacia & Beauty ahead of a Europe-wide roll out promising personalised specialist pharmacy and skincare solutions delivered in a techno-enhanced environment. In the US, Wayfair, the formerly online-only furniture and home goods retailer, is readying for the opening in Atlanta of its second large-format store.

View this post on Instagram

A post shared by Netflix UK & Ireland (@netflixuk)

Netflix, meanwhile, will soon open Netflix House – a physical ‘play, shop and eat’ destination concept – after testing in-person pop-up shopping experiences selling fashion items, props and other memorabilia from some of its most famous streaming shows.

The ranks of digital brands venturing into physical are growing fast, following the lead set by the likes of sustainable footwear brand Allbirds, prescription glasses specialist Warby Parker, and, of course, the grandaddy of them all: Apple Store.

Each in their own way reassessed how best to show up within the context of their product, category and – above all else – the wants and needs of their own specific audience. And the decision they made was the same: to take a 360-degree, holistic approach to connecting with their customers beyond ‘just’ a seamless digital experience.

The fact that digital-first brands are now embracing physical spaces in ever growing numbers should be a wake-up call for the many other brands yet to do so

This is the approach we take at Wolff Olins in all our work, across all brands in every sector – from physical destinations like museums and destination brands such as Sandals to legacy brands like Lloyds Bank or digital start-ups. Fashion and beauty brands – luxury brands, especially – have long known the value of physical retail as theatre and brand showcase. Automotive brands, too.

But the fact that digital-first brands are now embracing physical spaces in ever growing numbers should be a wake-up call for the many other brands yet to do so – especially those who due to cost, or a misunderstanding of people’s desire for human interaction, are downgrading their physical presence.

People’s desire for human interaction and connectivity is primordial – as is their appetite for and engagement with stories and storytelling. And in the increasingly AI-powered world we have seen emerge since the pandemic, these instinctive wants have become more important not less.

View this post on Instagram

A post shared by Hammersmith BID (@hammersmithbid)

To understand how physical presence can work best for a brand, you need to consider the physical experience through two lenses. First, you need to define the role physical space should play in a brand’s strategy, which in turn is determined by the role the brand owner wants that brand to play in the world.

A physical space can be a place to sell, or to showcase, or to give certainty and instil trust – as with high street banks – or to foster human interaction and a sense of community. Yet sometimes, some younger, urban brand managers can overlook or undervalue the importance placed on each of these things by different customer groups.

A physical space can be a place to sell, or to showcase, or to give certainty and instil trust – as with high street banks – or to foster human interaction and a sense of community

Other times, however, a brand gets this just right in a surprising way – as Ikea did when it opened its first high street Swedish restaurant in Hammersmith, London, last year. Starbucks’ Roasteries and Reserve store propositions, each intended to evolve the coffeehouse experience, are other compelling examples.

Second, you need to consider what functionality you need to connect that physical space with a brand’s wider ecosystem – ‘ecosystem’ in this sense meaning the package of interactions and experiences across a brand’s every touchpoint. So, you might choose to use digital technology in a physical space to offer customers different ways to buy – click and collect, for example, or express checkout. This is about defining how to integrate the physical and the digital in a way that’s best for your brand.

Nike’s integrated digital and physical ecosystem, with interrelated and interwoven apps fuelling and sustaining interest in the brand and its products as well as enhancing the in-store shopping experience is a powerful demonstration of this.

As the world emerged from the pandemic, understandably everyone focused on service and acquisition. But since then, things have changed. Today, it’s all about the loyalty and retention that can only come with the best brand experiences – the best brand experiences being those that balance digital with physical with a truly holistic, 360-degree strategy.

Wayne Deakin is global creative principal at Wolff Olins; wolffolins.com