Thursday, 3 September 2026
Physical retail is entering another phase of transformation as stores increasingly combine shopping with hospitality, services and other activities designed to give consumers additional reasons to visit. The change is beginning to influence not only retailers’ operating models but also the type of commercial space that landlords need to provide.
According to Colliers, hybrid formats are becoming more important as conventional stores compete with the convenience and efficiency of digital sales channels. Rather than functioning solely as places where products are displayed and purchased, stores are increasingly being used for customer engagement, services, food and beverage and interaction between online and offline sales.
“Retail is evolving toward hybrid concepts that can attract both investors and customers thanks to these set-ups ability to generate consistent foot traffic. The trend is toward expanding experiential concepts, which are bringing customers back to stores and strengthening brand loyalty,” said Blanka Sovová, Director of the Retail Division at Colliers.
This evolution is changing how the performance of physical stores is assessed. Visitor numbers remain important, but retailers are also paying closer attention to how consumers use a space and how long they remain there. Seating, refreshments, consultations and other services can turn a relatively short shopping visit into a longer interaction with the retailer.
“In practice, this means that if a retailer can extend a customer’s stay—for example, by offering coffee or a place to sit—the store owner then increases the likelihood of larger purchases. However, the length of stay isn’t just important for immediate sales; it also serves as an indicator of the quality of customer experience,” Sovová said.
Bookshops provide one of the more established examples. Combining bookselling with cafés gives customers somewhere to browse, meet and spend time rather than simply completing a purchase. Similar strategies are increasingly visible elsewhere in retail.
“Coffee in stores is nothing new, though. Tomáš Baťa already used this idea in the 1930s. He offered coffee to men who were waiting for their wives to choose their shoes,” Sovová said.
Contemporary fashion brands are developing the concept further. Colliers points to H&M’s ARKET format in Prague as an example of combining fashion retail with refreshments. At the luxury end of the market, brands including Dior, Gucci and Ralph Lauren have used cafés and restaurants to extend their presence beyond conventional fashion stores.
Beauty retail has followed a somewhat different route. Physical locations increasingly combine product sales with services such as consultations, makeup application, product trials and skin analysis. These activities provide an element that cannot be replicated as easily through an online transaction and can therefore strengthen the role of the store within a retailer’s wider sales network.
The relationship between e-commerce and physical stores is also becoming less straightforward. Instead of treating the two channels as competitors, retailers increasingly use them together. Online sales can provide information about customer preferences before a company commits to a physical location, while stores can support product discovery and strengthen a retailer’s presence within a particular market.
“When a brand opens a physical store, digital sales in that area typically rise; when it closes one, they fall. According to a Capital One Shopping survey from this past June, as many as 55% of customers visit the retailer’s website before heading to the store. So, as the online world grows, so do sales in the offline world,” Sovová said.
For commercial property owners, however, the move towards hybrid retail creates practical challenges. A unit originally designed exclusively for selling clothing or other merchandise may require substantial changes if a café, restaurant or another regulated activity is subsequently introduced.
In the Czech Republic, combining conventional retail with food preparation or service can trigger additional hygiene, ventilation, technical and fire-safety requirements. Depending on the existing approval of the premises and the proposed operation, alterations can also require changes to the permitted use of the space.
This creates a property investment consideration that extends beyond tenant mix. Retail buildings capable of accommodating different activities without extensive reconstruction may become more attractive to operators whose business models continue to evolve. Flexible layouts, sufficient building services and the ability to modify units could therefore become increasingly important when shopping centres and high-street properties are refurbished.
“We recommend that property owners and retailers move away from rigid divisions of retail spaces and start thinking of them as dynamic ecosystems. Successful stores are no longer defined by the number of items sold, but by the depth of the customer’s engagement in the brand’s world. Hybrid concepts are a good tool for achieving this goal,” Sovová said.
For landlords, the shift means that future leasing strategies may need to consider much more than the traditional division between shops, restaurants and services. As those boundaries become less distinct, adaptable commercial space could play a larger role in attracting tenants and keeping existing retail properties competitive.
