Millennials push retailers towards community-led stores

Millennials are driving demand for retailers to create ‘third space’ shopping environments, according to research from the Retail Technology Show.

A survey of more than 1,000 UK shoppers found that 57% of Millennials want stores to combine community, socialising and shopping.

The findings suggest expectations for physical retail are shifting, with stores under pressure to offer more than transactions. They also showed that 24% of Millennials want immersive brand experiences as part of the in-store journey, 10 percentage points higher than the figure across all age groups.

Retailers have already been testing formats that place greater emphasis on time spent in-store and on interaction with the brand. Last year, Superdrug announced plans to open 30 new beauty playgrounds designed as experiential discovery centres, while cycling brand Rapha has built its store model around Clubhouses that combine retail space with cafés and event hubs for its cycling club members.

The research links the trend to wider social and workplace changes, with demand for spaces between home and work rising amid digital fatigue, fragmented community life and the growth of remote working.

A third of consumers surveyed said they now discover retailers through brand-community platforms and value-aligned interactions. This points to a broader shift in how shoppers first encounter brands and how stores fit into that relationship.

For retailers, the findings add to evidence that younger consumers place greater value on experience and participation in physical spaces. The research found that 78% of Millennials prioritise spending on experiences over buying physical items.

Changing Store Role

This backdrop is pushing store design and operations away from a purely sales-led model. Physical outlets are increasingly being used as places where brands can host communities, encourage repeat visits and give shoppers reasons to stay longer.

While experience-led retail is not new, the stronger focus on community marks a more specific direction. Rather than relying solely on product displays or transactions, brands are trying to create spaces that support social interaction and a sense of belonging.

That can take many forms, from beauty testing areas and cycling cafés to venues for classes, gatherings and member-based activities. The common thread is that the store becomes part of a wider brand relationship rather than a standalone point of sale.

Matt Bradley, Founder & Event Director of the Retail Technology Show, said the findings reflect this shift in consumer expectations: “Experience-led retail isn’t a new concept, but the shift towards brand spaces for connection – not just commerce – charts a new course for how retailers can show up meaningfully within their communities.”

“Consumers want to feel their relationships with retailers go beyond buying, so finding new formats that foster that deep sense of connection will redefine how stores of the future evolve.”