What: In China, the physical store could make a comeback as a small, locally focused experiential retail proposition in neighbourhoods with authentic character.

What is important: Further to Nike launching small stores, neighbourhood shop trend is getting more and more important in China as a way to engage in a different way with customers. Such stores are opening in neighbourhoods with an atmosphere, but also in smaller fashion commercial districts and retail complexes.

The space can be more about the pleasures of experiential retail — in line with current retail trends — encouraging communication with consumers and interaction about fashion. Rather than standardised product displays, neighbourhood stores place higher significance on creating a sense of affinity between product and customer and nurturing a special atmosphere.

Chinese online women’s fashion retailer Short Sentence opened its first boutique in Shanghai in January, seeking to create a friendly vibe. The new 100-square-metre store aims to project the warmth of a neighbourhood shop with a small garden at the entrance. The store’s layout recalls a workshop space, presented as a gathering place for creative, innovative people.

The concept of a neighbourhood store offering an experience is extending well beyond fashion and furniture. Nio House, described as a “lifestyle sharing space”, has been created by electric automobile manufacturer Nio. A Nio House has a multitude of rooms for exhibitions, dining, reading and discussion. Nio users can also invite friends for a test drive or to participate in themed House activities. Nio House has been developed to bring a stronger sense of community to the Nio brand, which is best known for its family cars. The lifestyle spaces are typically located in urban shopping malls, where families tend to shop.

There’s a certain degree of randomness to these new local stores and it requires retailers to take risks. While mainstream retail districts and shopping centres attract a certain crowd that can be analysed in advance, a neighbourhood shop may attract all kinds of people. It may evolve as more showroom or digital pick-up space than sales unit. Customers visit for the experience rather than with a particular objective, collecting impressions about products in-store, and probably, buying online.

Welcome to China’s new neighbourhood stores