The future of retail
Winning retailers are not focusing on winning the masses, rather they’re providing a desired experience and quality engagement with a smaller number of consumers who consequently become great brand advocates.
Over the last couple of years, Magenta has spent a lot of time working with retailers. We’ve observed shoppers, conducted intercepts and accompanied shops, and reviewed eye tracking material captured through stores. We were, therefore, excited to attend the 2018 Retail Design Expo, a coming together of design, technology and signage experts all sharing their thoughts and ideas on the future of retail, and how this is going to impact on our high street.
Throughout the two-day conference there were a number of key themes:
The consumer has high expectations and retailers need to meet them. Expectations exist across all areas of engagement including the service they receive; the value they get; the convenience of the shop; and the overall retail experience. Retailers need to be open and agile if they’re to meet, and dare to exceed, these expectations, and remain the retailer of choice for consumers.
Consumers don’t see channels. The physical and digital are not separate experiences or executions, rather multiple ways of engaging with the same brand. Consumers don’t think about different channels as separate or disassociated from each other. We heard an example from Caffe Nero who have relaunched their paper reward card, into a multi-functional loyalty app to meet all consumer needs. It allows bonus rewards for different products, gamification, gifting, competitions, provides a store locator, electronic receipts, and will soon enable customers to pre-load the card for payment. Similarly, in response to smaller, more frequent shops, Waitrose use their digital MyWaitrose programme to provide personalised recipe inspiration for that evening’s meal, driving footfall in to the store. We heard repeatedly that to truly operate as a consumer centric company, retailers need to restructure themselves internally to reflect the customer perspective, rather than working in silos.
Leading brands collaborate. One brand or retailer cannot be an expert in all areas, and instead of being threatened by new generations or start-up companies looking to shake up the industry, leading brands collaborate. We heard examples from Adidas on how they invited students from the local fashion college to come and try new clothes, create their own engagement and talk about new ranges on social media. The young generation used their own language, created their own stories and provided content for Adidas to share.
The online experience needs to be personalised. While we love the ability to browse from the comfort of our sofa, sometimes the endless ranges provided, especially in grocery stores, can make it difficult to navigate. We heard an example of being able to personalise your online experience by telling the brand you’re vegetarian, looking for low calorie options, or lactose intolerant, and they will only show you the products that fit your requirement. All brands need to be exploring how they can provide a personalised, and more engaging online experience.
Staff can also power personalisation. A huge amount of money is spent creating engaging experiences in-store in order to keep shoppers there for longer. However, while omnichannel strategies and in-store tech are a key trend we can’t ignore, a challenge for retailers is ensuring that their shoppers aren’t walking around only looking at their phone and not engaging in the physical environment. Staff can help with in-store personalisation and in delivering great experiences. True Religion, for example, equips staff members with a smart watch. When an online member walks into the store, staff are alerted and key customer data is sent to their watch, detailing previous purchases so that they may offer genuinely useful recommendations. Brands should ensure that staff are considered an integral touchpoint in the experience and empower them to deliver accordingly.
Winning brands are selling a lifestyle. It is not simply about providing a desired product, it is provision of a desired lifestyle. The coming together of retail, leisure, food and beverage gives permission for consumers to hang out with you, to spend time in your space, to share the brand values. We’ve seen examples in Wholefoods and Waitrose who offer in-store wine bars and deli counters where customers can sit and enjoy the food and drink whilst engaging in the space and soaking up the brand. Consumers will pay more for experiences. It is not just about purchasing a product, it is the experience with the brand. Spaces need to be curated to meet consumer aspirations.
Across the two-day conference we often heard that to keep pace in this highly competitive retail environment, brands need to put their consumer first and understand both their lifestyle and behaviour but also what a good experience means to them. If you want to hear more, or discuss how to evaluate (or innovate) your shopper journey, get in touch.
