Retailers are planning more store openings than closures this year, reaffirming that while we’re more digitally connected than ever, tactile, communal experiences remain central to commerce.

Coresight Research predicts that US retailers will close about 7,900 stores this year, a 4.5% YOY decline and the lowest number of closures in the past three years. The firm also anticipates that national retailers will open 4.4% more doors this year, equating to 5,500 new stores in total. 

But brick-and-mortar’s resurgence isn’t measured solely by the number of doors; rather, by the intention and meaning behind the spaces retailers are creating.

In a recent survey of 1,000 consumers, we found that consumers preferred to shop in stores because they wanted to see/feel items before buying them (47%), they needed a specific item same-day (34%), or because it was more convenient (37%) than shopping online. Beyond instant gratification, there is a special type of emotional, social, and cultural fulfillment that comes from leaving the confines of our homes (and screens) and immersing ourselves in physical environments. 

It’s why Gen Z, the first digitally native demographic, was recently called the new Mall Rat generation. They’re not going to stores to buy stuff. They’re going to connect with friends, document their experiences on social media, and forge their alignment with specific brands by engaging continuously across all channels. Gen Alpha is following in their footsteps, favoring physical environments that offer food, drinks, and brands that offer moments of interactivity and play, such as LEGO and Five Below.

As Gen Z and Gen Alpha capture a larger share of retail spending, brands and retailers need to rethink how they design their spaces and, perhaps most importantly, how they measure success. 

This is where Return on Experience comes in.

The Theory Behind Return on Experience

Return on Experience (ROE) is a methodology based on the firsthand experiences of Kate Fannin, lead analyst of Future Commerce’s Field Notes and the “Retail Realist” who has worked for brands spanning Nordstrom, Estée Lauder, and Lowe’s. 

She believes, and has witnessed firsthand, that “people buy things, but they pay for experiences.” And while retailers across categories are acknowledging consumers’ pivot back to physical stores, they don’t quite know how that translates into meaningful decisions for their business. 

“Retailers don’t typically create a roadmap of what it means; is it new visuals, new training? What are they doing that’s different?” Fannin noted. The most creatively exciting (and difficult) part of this new era of retail is that not every experience should look or feel the same. All design, service, and technical decisions must be rooted in a deep understanding of the brand and the customer you’re trying to serve. Otherwise, brands fall into the trap of replicating trends that don’t have any actual meaning or impact. 

The merchants with the largest store footprints are in dollar-store and convenience categories, and the ones planning to open the most new doors this year are Dollar General, Aldi, and Tractor Supply. These merchants benefit from penetration and proximity to their customers, but they are by no means “experiential” brands. Yet they are investing in Return on Experience by making decisions that align with what consumers want and expect from them. For example, Dollar General has opened more small-format stores located within five miles of roughly 75% of the US population. Most of the retailer’s fleet (80%) serves communities with populations of 20,000 or fewer. The brand’s stores may not be the most immersive or entertaining, but that’s not what consumers want or need from the brand. What they’re actually looking for is ease, convenience, and access to everything they need at a good price, including groceries, which aligns strategically with Dollar General’s vision of becoming more of a “small-town grocer.” 

The vision and execution of Dollar General differ significantly from that of a retailer like Montblanc. Beyond the category differences, Montblanc’s goal isn’t to get people in and out of stores as quickly as possible. As Fannin’s exploration of the brand’s Madison Avenue store indicated, the location was thoughtfully designed to inspire in-depth browsing, exploration, and even lingering. Strategically placed seating permitted customers to stay, and interactive elements like the Nib Bar motivated them to touch and test items. 

In the first wave of Field Notes stores, which included Montblanc as well as brands ranging from Printemps to SWATCH, Fannin noted that the most successful stores committed to aesthetics. “All of these stores tied to the story of their brands really well,” she said. Even SKIMS, which Fannin considered to be a bit of a bore, embodied the aesthetic of the brand and founder Kim Kardashian herself. 

Glossier is another brand that commits to its story very well. Retail expansion was previously the key indicator of DTC success, but now, the brand is shuttering nine of its 12 stores and prioritizing key markets: New York, Los Angeles, and London. By thoughtfully pruning its store fleet, the brand can double down on the highly sensory, museum-like experience it has become known for, including custom merch collections for each market.

These stores “are really designed to be immersive playgrounds, and really designed to connect people to the brand, the products, and, most importantly, to the community,” said Emily Lewis, Glossier’s GM of Retail, during a session at Shoptalk Spring. She defined Glossier stores to be “if an Apple store and a Disney store had a baby.” Apple is known for its modern yet welcoming spaces that encourage discovery and play, while Disney is a master of worldbuilding. Glossier’s goal is to combine the two in a way that only the brand can.

"I think it's going to be the stores the customers choose to be in, not because they have to, but because they feel a sense of belonging there. That's what we're building at Glossier,” Lewis said. 

The Decline of Retail’s Middle: Strategic and Operational Pitfalls Persist

Retail executive-turned-author and podcaster Steven Dennis has called the industry's bifurcation the “death of the unremarkable middle.” Indeed, the brands that don’t emphasize seamlessness and value, nor exclusivity and luxury, end up blending together, especially if they don’t offer anything distinct or meaningful in the physical retail experience. 

And the reality is, even retailers once heralded for their operational excellence, such as Target and Sephora, are struggling with consistency. They’re haphazardly oscillating between convenience, culture, and conversion, creating a brand identity crisis that leaves consumers asking, “Where am I and why am I here?” 

“I went to Sephora to return an online order, and it was a nightmare,” Fannin admitted. “It was so messy in there, and the poor associates are trying to help you, but the brand felt completely degraded in that moment.” 

Target has experienced a similar downfall, arguably on a much larger scale. After tasking associates with pulling online orders, the retailer found they couldn’t keep up with the mounting responsibilities of an exceptional omnichannel business. Shelves were left unstocked. Displays were messy. New collab launches felt undercut. And worst of all, customers felt ignored. Now, Target’s new CEO is investing in a major turnaround plan to bring the retailer back to brick-and-mortar excellence. “It’s almost like Target is slipping back while Walmart is opening some new, stunning stores,” Fannin noted. 

When customers visit stores, they expect value, whether in service, merchandise assortment, or unique experiences such as collabs and activations. Three out of five Gen Z shoppers visit stores because they want to experience a brand’s community and fulfill their desire for a greater sense of belonging, according to MG2 Advisory research. Similarly, 73% of Gen Alpha go to stores to “fully immerse themselves” in a brand’s environment. If brands can’t fulfill these most intrinsic needs, consumers are more likely to rely on digital tools, like LLMs, which offer the speed and concierge-level service that physical stores once promised. Our research showed that 40% of consumers planned to visit physical stores less often in the future because of positive experiences shopping with AI platforms like ChatGPT and Gemini.

The Case for Return on Experience: Why Existing KPIs Fall Short 

Traditional store KPIs measure sales, efficiency, and core customer behaviors to gauge a store and chain’s profitability. Conversion rate, average transaction value, sales per square foot, and even inventory turnover, convey the bottom-line results of a store. But there is missing context in these numbers because they don’t capture how a store’s overall quality of experience drives engagement, immersion, or a feeling of cultural and/or community belonging. 

Today, brick-and-mortar can serve a vast spectrum of roles and purposes. It can be a sensory medium, a storytelling stage, a cultural interpreter, and a point of community connection.

Physical retail can also be a force of security and reliability, especially in pharmacy and grocery categories. Yet even in these scenarios, proximity and seamlessness can fall short if the overall experience fails to leave a lasting impression. After all, they can just go online for something fast and easy. These areas need to be benchmarked and analyzed consistently.

Sales-oriented KPIs also overlook possible areas of improvement. In their one-dimensional view, a store is considered a success because a sale took place. But these metrics don’t capture problems in executional areas such as: 

• Service: Associates who don’t fully know or represent the brand can break the experience, especially in specialty and luxury retail. If a customer knows the brand better than the associate, long-term ROE crumbles.
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• Sensory neglect: Many stores fixate on visual merchandising while ignoring a broader multisensory ecosystem that complements products. Scent, sounds, spatial flow, and emotional pacing all set the tone for consumers as they venture through a store.
  
  
• Aesthetic inconsistency and chaos: Imperfection is forgivable, but not when it becomes the standard. When there is a constant mess in aisles, every visit feels stressful and overwhelming.
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• Purpose and design misalignment: A discovery-led brand built as a warehouse store feels out of place. A high-volume brand that designs museum-like spaces can feel misplaced. Experiences should be based on brand identity and purpose first, and customers’ expectations of the brand second.

The Core Dimensions of Return on Experience

Several qualitative and quantitative factors shape the above Return on Experience (ROE) framework. It encapsulates how a physical space communicates the brand story, is designed to serve a specific commerce intent, and is augmented by human connection.

ROE = Brand Story + Human Factor + Sensory & Aesthetic Immersion + Commerce Intent Fit

• Brand Story: Cues, symbolism, coherence
• Human Factor: Emotional tone-setting, concierge, and up-sell support
• Commerce Intent Fit: Environmental signals that steer behavior
• Sensory & Aesthetic Immersion: The anchor that connects all components

Sensory and aesthetic immersion connect all components of the store, adding a level of attraction and engagement that the retail “fundamentals” alone can not. 

For example, Bang & Olufsen uses lighting and sound in tandem to turn lifestyle vignettes in its SoHo Manhattan store into compelling, contextual experiences that bring its products to life. Without them, Bang & Olufsen’s assortment of speakers, headphones, and sound bars would look and feel like rows of static inventory. The Victoria’s Secret flagship on Fifth Avenue uses digital displays to add rich storytelling and depth to product displays. Rituals, the luxury skincare and cosmetics brand, uses its stores to create interactive moments that encourage self-exploration and reduce reliance on associate-driven education. 

Commerce intent fit is used as a benchmark to verify that all store elements align with the store’s strategic goals. It’s the proverbial gut-check that all brands need to ensure they’re not simply chasing the latest design trends but creating spaces with meaning.

Buc-ee’s is a great example of a brand excelling at what it wants to be known for. The country store and gas station chain is focused on high volume and high utility. It wants to get people in and out as quickly as possible, but also provide the breadth and depth of inventory that makes shopping more joyful. From beef jerky to branded slippers and trucker hats, every aisle has a surprise that drives an impulse buy. This quirkiness, coupled with a rich menu of quick-serve items, makes it a high-sensory environment that meets business goals and serves customer needs.

Why Sensory Design Matters for Return on Experience

Sensory and aesthetic immersion are the immersive “wrapper” that surrounds every experience. It’s why luxury retailers like Coach and Louis Vuitton are creating hospitality moments in their flagship stores, and it’s why “faster” brands like UNIQLO are adding product customization services into their locations. 

These moments of interaction, whether it be sight, scent, touch, or taste, slow people down. Three in four Gen Alpha consumers surveyed by MG2 Advisory said that when brands offer in-store food and beverages, they are encouraged to spend more time in their locations, explore, and connect further with the brand.

Although Gen Z and Alpha are primarily driving the “experiential” trend, even boomers seek comfort and meaningful moments with their families, creating a clear tie to the third-space environments that so many brands are designing. So much of life is optimized for speed and convenience that sometimes, we’re secretly looking for reasons to dwell. 

Sensory integration can also convey the brand story in a way that basic store design and product merchandising cannot. The use of scent, music, and lighting can communicate a brand’s price tier, product quality, and even emotional promise before someone engages with an associate. These touches can be tweaked over time, customized by location and market, and even scaled across a brand’s footprint. It can all adapt to what the brand wants to convey as it grows and evolves.

The New Algebra of Experience

The $132 billion experiential retail market is expected to more than quadruple by 2035, according to ICSC. Retailtainment can range from subtle design elements to large-scale activations, and brands of all sizes are investing in the movement. However, the key is to do so in a way that is appropriate for your brand and for your customer. Strategic recommendations include: 

• Prioritize the fundamentals: Cleanliness and cohesion are the foundation of a positive experience.
   
• Train associates to use sensory methods as a tool: What opportunities can they present to interact with your brand in a more sensory way? They can reinforce the brand and product story through these moments.
  
  
• Map sensory ideas to commerce intent: What is the intent of your environment, fast and easy conversion or high discovery and dwell time? Match your intent to the tactics that address them.
  
  
• Measure what customers remember: Collect qualitative and quantitative feedback through social, email, chat, and in-person conversations to see what they remember and why.

If customers recall a moment and share it with their friends and family, that value goes far beyond the conversion. Because people may buy things, but they pay for experiences.