The National Retail Federation’s (NRF) ‘Retail’s BIG Show’ 2015 set the scene for the global market in which retailers operate. The 18th Global Powers of Retail Report produced by Deloitte Touche Tohmatsu Limited has again identified those that are leading the pack in managing the demands of the trading environment and highlighted the performance of both brands and nations.
Capturing the highlights of this report seems near impossible as there is so much to digest, however, the common thread in the data is the capacity of progressive retailers large and small to embrace innovation – setting a clear direction for 2015.
Mobile retailing
This trend continues to be supercharged by the rising smartphone usage globally. In the next three years it’s predicted that e-commerce sales via mobile devices will grow to $638 billion. This figure was the total size of the entire e-commerce market one year ago. Innovation in wearable technology is creating the next interface for the growth in mobile sales in the e-commerce sector. Retailers are challenged to embrace the urgent necessity of free in store Wi-Fi and mobile friendly devices or risk irrelevance in an increasingly impatient market.
Faster retailing
Fast retail is clearly an important trend adopted by the millennial consumer. Speed is being driven by shorter trend cycles and ‘limited time only’ products and locations. Same day or same hour delivery service is also an emerging norm. The testing of delivery options to shorten the end-to-end supply chain was the basis of many presentations at the NRF conference and a space to watch closely. Additionally, the faster retailing concept is as much about speed of information on products and trends as it is about the physical item itself.
Experience retailing
This encompasses all the elements of entertainment, education, emotion, engagement and enlightenment. Cross-functional collaboration and the removal of business silos is the only way that brands are able to curate content and experiences for the consumer that are seamless, personalised and layered to perfection in both the physical and online environments. The ‘segment of one’ marketing strategy is a primary focus for many brands to deliver individualised and non-invasive communications.
Innovative retailing
With no set rule book to the industry, retailers are adapting to the market with concepts in all shapes, sizes and formats. Some concepts are imperfect and creative, and others are all about being accessible and futuristic. The refreshing part is that there is so much change as retailers invest heavily into innovation. Brands such as John Lewis, Nordstrom and Amazon are incubating ideas in their innovation labs and collaborating with rising talent in technology start-ups to deliver a new edge to their retail concepts.
Further insight was given by Leslie Ghize of TOBE trend forecasters at the NRF conference, highlighting that there are many atmospheres that are motivating consumers today. Coupling this with the Deloitte insights gives more depth to the complex influencers of consumer behaviour and guides retail strategy.
Three perspectives on atmospheres were presented by Ghize that are worth understanding.
First she spoke about the atmosphere of imperfect – a place of realness and relaxation. This trend is being driven by the acceptance of reality TV as a norm and a willingness to share the real side of life. Facebook is clearly a driver of reality sharing where imperfections are celebrated and socialised. The key to success for retailers is to capture a level of imperfection that makes their brands real and to build this with their innovation strategies. An example is where marketing has moved from structured formalities to ‘friend like’ conversations and informal connections that highlight not only the positive elements but the importance of brands failing and learning in order to succeed in their customers mind. Nike has demonstrated this with the Michael Jordon ‘fail in order to win’ advertisements.
Ghize also spoke of the atmosphere of creative. This drive for creative is growing as businesses steal from the old, re-do and then combine to create the new – in essence old + old = new. Urban Outfitters flagship store in Herald Square NYC demonstrates how one brand builds a store for the customer who never wants to leave. An atmosphere of creativity is the obvious in this new concept where you could sleep in one of the vintage tents, grab a coffee at the in-store Intelligentsia cafe, tidy up your look in the well mixed beauty zone or the adjacent aptly named Hairroin salon. Fun does not finish here as there’s still a massive shoe shop popping up limited edition ranges from desired brands like Hunter as well as vinyl to collect at Amoeba Records.
This 5300sqm store demonstrates the collaborative strength of mashing up brands of appeal under one roof to bring a new edge to an old experience. Brands such as Staples, Nordstrom, Home Depot and Sears see this as a new norm in their business.
Finally, Ghize investigated the atmosphere of mindfulness. The concept of mindfulness has its origins in Eastern philosophies where it’s defined by ‘living in the moment.’ The translation of this concept to Western retail has extended beyond this definition to a concept where consumers support those brands that actively seek out and support their personal philosophies in the way they live a whole and balanced life, therefore seeking brands that support designers, artisans and manufacturers with social, ethical and authentic goals. These brands create product collections that fuel a customer’s desire to feel good and positively influence environmental and social change.
Modern mindfulness in retail is built with recognition of the need for the retailer to be the educator and storyteller of an atmosphere that gives permission to the consumer to make socially responsible choices. The global shift from traditional large format fitness centres to micro fitness zones that facilitate mediation for the masses as part of a specialist fitness ritual is a classic example. These concepts are redefining the value of the fitness sector.
Brands such as Soul Cycle are the hottest new concept in fitness in the USA with 25 studios across the USA. Their studios are set dim with 50 riders packed as a mob and riding with unified surge to the throb and sway of the music while the instructor leverages their control to give the group the mental workout through commands and inspirational chants. Attending one 45 minute session sets the consumer back $34 but classes are still packed and booked out well in advance. The power of mindfulness is like jet fuel to simple retail concepts like Soul Cycle where a class has transitioned to be part exercise, part dance rave, part cult and all about developing one’s body mind and soul.
As we kick off 2015 and focus on what’s in store for the year ahead it’s imperative that a clear view of innovation strategies are in mind for all retail brands. Taking time to digest early in the year the trends that are impacting on the industry, from the ‘be everywhere’ strategies to ‘one click everything’ expectations of consumers, our businesses need to be the hub of not just consumerism but innovation, creativity and mindfulness.
The full Deloitte report makes informative reading and can be found at https://nrf.com/news/2015-top-250-global-powers-of-retailing
