If you follow large brands on LinkedIn, you have most likely noticed a trend of new physical retail spaces opening worldwide. But why, in an era dominated by e-commerce, are these companies investing heavily in brick-and-mortar locations? This shift is driven by evolving consumer preferences, the power of immersive retail experiences, and the desire to create tangible brand connections. In this article, we’ll explore the factors behind this resurgence and what it means for the future of shopping.

HOKA Sportsmen’s Lodge (December, 2024) hired Feels on Brand to open this new physical retail location in Studio City..

Why Consumers Choose Physical Retail Spaces When Shopping

E-commerce was forecasted to be the death of physical retail spaces, but as we step into 2025, we are seeing brick-and-mortar stores aren’t going anywhere. In fact, EMARKETER forecasts that 83.7% of retail sales in the US take place in-store. Why? Consumer preferences are rapidly changing.

Customers want to see and touch items

Many consumers jumped on the fast fashion train because they got in-style, cheap products. Unfortunately, that low price tag came with cheap materials and poorly designed items, but they were unaware of this until the purchase had already been made. Today’s consumers want to be confident in their purchases and see and touch products to ensure quality and fit. According to FedEx and Retail Dive report, “6 in 10 customers visit stores where they can see and touch items, even if they plan to buy online”.

Purchasers want products immediately

Shipping times have become faster, but customers still want their products immediately after purchase. Instant gratification is something physical retail locations have a competitive edge over online retailers. Brick-and-mortar stores act as both a fulfillment center and a place for consumers to enjoy the satisfaction of instant ownership.

*HOKA Prudential Center (October, 2024) footwear wall allows customers to interact with each product while category and gender wayfinding guides the experience.*

Users crave experiences

For many consumers, online shopping is now considered a chore, similar to grocery shopping. They realize they need something, find it online, and wait for it to arrive in the mail. Fit Small Business states, “6 in 10 shoppers look for curated experiences when going to retail stores”. All this is to say that in-store shopping has transformed into more than just a transaction; it is an experience.

Retailers are rising to consumer expectations by adding experiential components, such as welcome moments, community spaces, recurring events, visual merchandising, and storytelling elements.

Why Retailers Keep Investing in Physical Retail Spaces Location

Even though it costs more upfront, retailers are thrilled about the return to brick-and-mortar movement. This is because physical retail stores offer unique advantages that online platforms can’t replicate including the ability to foster customer loyalty and an increase in purchases both in-store and online.

Physical Retail Locations Foster Customer Loyalty

The best way to create connections and foster customer loyalty is by storytelling. While brands can control digital elements like colors, fonts, and layouts, they lack influence over a user's environment. On the contrary, physical retail spaces allow brands to craft a fully controlled and immersive narrative through product displays, visual merchandising, materials, sensory experiences, and window displays, to name a few. These elements work together to captivate customers and communicate a cohesive story, offering brands complete creative freedom to express their identity and connect more deeply with their audience.

HOKA Sportsmen’s Lodge (November, 2024) uses an interactive footwear tool and storytelling elements to engage and interact with customers.

Impulse purchases happen more often in physical stores

The more time consumers spend inside a physical retail space, the more money they spend. This is because they have opportunities to discover new items. EMARKETER reports that 31.5% of shoppers made a purchase right away after an in-store discovery, compared with 19.1% of those who visit retail websites.

Brick-and-Mortar & E-commerce complement each other

Brick-and-mortar stores have been found to increase online purchases. ICSC found that online sales increased after opening a physical store—around a 6.9% increase in sales. Plus, the online halo effect is two times for emerging and direct-to-consumer (DTC) retailers that open physical stores in the same trade area.

Additionally, physical locations can function as hubs for inventory, returns, and same-day pickups, seamlessly integrating with online operations to enhance convenience and drive overall success for the retailer.

Key Takeaways for the Future of Shopping

Physical retail spaces benefit both consumers and retailers, driving meaningful connections and enhancing shopping experiences. In the future, we can expect pop-up stores to maintain their popularity, offering brands a flexible way to engage customers. Established retail locations will see reinvestment, with a strong emphasis on user-centric design and immersive experiences. Additionally, hybrid shopping models—blending online and in-person interactions—will become the standard, catering to the demand for convenience and personalization in modern retail.

Are You Ready to Open Your Next Unforgettable Location?

Now that you understand why physical retail spaces are thriving, what consumers want, and where the future of retail is headed, it’s the perfect time to launch your next store. With over 15 years of architecture, in-house brand, and design agency experience for influential brands including HOKA, Arc’teryx, Nike, Adidas, and Garmin, Feels on Brand is the go-to retail experience design studio for creating unforgettable retail spaces. Together, we'll help navigate designing and implementing your next retail brand experience. Download our Investment Guide to learn how to get started.

Why Big Brands are Opening New Physical Retail Spaces in 2025