Digital, Experiential and Physical Retail Strategy

Retail strategy is the work of deciding what each retail format is for, what it should cost, and how the formats add up to one customer relationship rather than several competing ones. It covers the physical estate, the digital storefront and the experiential formats between them, each judged on the job it actually does rather than on which channel is winning this quarter. Vivaldi works on format strategy, store and location planning and the in-store experience specification for consumer and retail clients.

• Since 1999demand, commercial and customer strategy
• 200+published case studies
• 10 officeson four continents
• No build stakewe do not fit out stores, so our format advice carries no construction revenue
• The Interaction Fieldwritten by our founder

When companies bring us in

Retail strategy work usually starts at a moment when capital is about to be committed and nobody can agree on what the money is buying.

• A lease cycle is approaching and the estate plan is an extrapolation of last year rather than a decision.
• Physical and digital each report growth, and the customer keeps meeting friction on the seam between them.
• An experiential format is being judged on sales per square foot, which is the one job it was not built to do.
• A replatforming is funded, and nobody has settled what the stores are for once it lands.
• The store estate knows less about the customer standing in it than the website knows about an anonymous session.

Why a better store concept does not fix it

Most retail estates still run physical and digital as separate businesses, with separate targets, separate customer views and separate P&Ls. The customer experiences one brand. The organization experiences two businesses. Almost every friction the customer meets sits on the seam between them.

That is not a failure at the format level. Each channel is behaving rationally against the number it has been given. A return bought online is a cost to the store that accepts it and a saving to the channel that sold it. Assortment is decided against last year’s sales in that format rather than against demand across all of them. An experiential space gets defunded at a budget round because the measure applied to it was never the measure it was built for.

Which is why a new store concept rarely holds. The concept is downstream of the format’s job, its economics and its place in the customer’s path. Commission the design before those three are settled and you get an admired space with an unclear commercial purpose, and the incentive that produced the original problem is still in place when the ribbon is cut.

What our retail strategy services include

1. Format strategy and the demand spaces each format serves

What each format is uniquely good at, and therefore what it should be funded and measured to do. Physical is unmatched for evaluation that needs the senses, for advice from a person, for immediate possession and for building meaning at a scale a screen cannot reach. Digital is unmatched for range, comparison, replenishment and continuity of the customer record. Experiential formats exist where participation is the point rather than the basket. We settle which demand spaces the business intends to own before we settle which formats serve them.

2. Store and location planning

The store plan and the location plan, set against the demand spaces rather than against a competitor’s footprint. Format mix, where each format belongs, which markets open first and what a pilot has to prove before a rollout is funded.

3. The in-store experience specification

What the space has to do, written from the value proposition rather than from a moodboard: the touchpoints that carry the most weight in the decision, the end-to-end experience, and the testing and piloting that tells you which parts of it are actually working. This is the brief a retail design or architecture firm builds against. We write it; we do not build it.

4. The digital storefront and the customer record across formats

What the digital estate carries, what it hands to the store, and what the store hands back. Associate tooling that puts the customer’s context in the hand of the person serving them is consistently the highest-value piece of this and the least funded, because it improves a number the store P&L does not own. Where AI belongs here is specific: assortment and allocation against predicted demand rather than historical sales in one format, pricing that reflects preference rather than only competitive position, and store-level decisions informed by what digital already knows.

5. The operating and economic model for the estate

The economics each format is held to, the measurement line that connects a format decision to the P&L, and the operating standards, staffing model and supplier requirements that make the estate runnable after the strategy document is filed. Experiential formats get measured against the demand space they serve and their contribution to lifetime value across all channels, because measuring them on sales per square foot is a decision to close them.

How a retail strategy engagement works

1. Establish what each format is being paid to do. We take the estate as it is, and for each format we write down the job it performs for the customer, the number it is measured on, and the gap between the two. The gap is usually where the capital is being misdirected.
2. Settle the demand spaces. What customers in this category are actually trying to get done, which of those jobs the business intends to own, and which formats are the right instrument for each. This is the decision the store plan and the location plan follow from, not the other way round.
3. Price the format decision. What a format contributes across the whole customer relationship rather than inside its own channel report: revenue from the demand spaces it opens, price realized against preference, lifetime value, cost to serve. A format has to be argued in the same unit as every other claim on capital.
4. Specify and pilot. The in-store experience specification, the operating and economic model, and the measurement line, proved on a small number of stores before a rollout is funded, with what the pilot teaches written into an operating standard rather than left in a deck.

Why companies choose Vivaldi for retail strategy

We are a strategy firm, not a store designer, a fit-out contractor or a systems integrator, and we have no revenue riding on which of those you end up needing. That matters more in retail than in most categories, because the usual advisers in this market earn on the build.

The second reason is where we start. Our work begins from demand spaces, what customers are trying to get done, rather than from a benchmark of competitor formats. A format strategy built from competitor footprints produces an estate that resembles the category and differentiates inside none of it.

The third is that we treat the channel P&L as part of the brief. A firm that scopes this as a design exercise leaves the incentive that created the friction untouched, and the friction returns within a planning cycle.

How to evaluate a retail strategy consultant

Worth asking of any firm on your shortlist, including us.

• What will you do about the channel P&Ls? If the answer is nothing, you are buying a store concept and keeping the problem.
• How do you decide what a format is for? If the answer starts from competitor formats rather than from what customers are trying to do, this is a benchmarking exercise with a floor plan attached.
• What will you measure an experiential format on? A firm that reaches for sales per square foot has already told you how that format ends.
• Do you earn anything downstream of this advice? Design fees, build, platform licenses or an implementation practice all shape which answer looks attractive.
• Who runs the estate afterward? Operating standards, staffing and supplier requirements are where retail strategy becomes real or stays a document.

Retail strategy consultancy vs retail design firm vs systems integrator

Related work

Retail format decisions rarely arrive alone. Where the question sits one step away, these are the nearer homes for it.

• Connected commerce is the group this page belongs to, and the place to start if the problem is that customer context stops at the channel boundary rather than that a format is wrong.
• Commerce strategy if the prior question is where commerce growth comes from across all channels, before any format decision is made.
• Social commerce strategy if discovery and purchase are moving into platforms you do not own.
• Dynamic customer journey strategy if the formats each work and the path between them is where people are lost.
• Direct-to-consumer programs if the question is selling direct alongside the retail and wholesale estate rather than what the stores are for.
• Adaptive e-commerce strategy if the digital storefront itself is the thing that needs rebuilding.
• Experience strategy if the subject is the whole experience a brand delivers and the store is one instance of it, rather than the estate being the decision.

This work sits inside our commerce and customer practice at Vivaldi, the strategy firm behind the Demand Landscape and the Interaction Field.

Retail strategy in the US and worldwide

We work with retail and consumer clients from ten offices on four continents, which matters for this service in a specific way: format economics do not travel. A format that earns its rent in one market is a different proposition in a market with different store sizes, labor costs, lease structures and shopping habits, and the most common error in a global rollout is exporting the pilot rather than exporting what the pilot proved.

So we work the estate market by market, on local customer research and local economics, and keep the format’s job constant while the expression of it changes. US clients get the same discipline applied to a market where lease structures and labor economics make the format question sharper than almost anywhere else.