Purpose: This study aims to use place identity theory to examine the concept of physical environment design (PED) and its effects on consumers’ emotional well-being (EWB) dimensions such as sensorium, behaviour and happiness. Design/methodology/approach: The authors used a qualitative approach. Thirty interviews were conducted among participants drawn from the city of London, which is one of the flourishing and world’s most famous international trade centre, providing paramount access to the global market. The data was analysed using thematic analysis. Findings: The findings suggest that PED is defined precisely using the terms like atmosphere, appealing, attractive, impressing, inviting, ambient, compelling and design cues. The findings also suggest that PED has a positive effect on consumers’ sensorium, behaviour and happiness. However, these effects are lower when the retail stores have unwelcoming themes than when they have mesmerising PED. The different names can also be advantageous, specifically when online shopping dominates today’s retail industry. The findings also illustrate that the theoretical model used in this study is valid and suggest that PED has positive effects on consumers’ sensorium, behaviour and happiness. Originality/value: To the best of the authors’ knowledge, while other authors tried to identify the effect of PED on consumers buying behaviour, this study is the first one to show how PED effects consumers’ sensorium, behaviour and happiness. The results of personal interviews highlight the importance of design elements and a gap in the application of novel elements to improve consumers’ sensorium, behaviour and happiness.