The Future Laboratory Editor-in-Chief Martin Raymond calls out brands that can’t see past the challenge of the change “Fire people in your team who come to you with excuses regarding increased competition and shifting market dynamics. They have missed golden opportunities while fixating on protecting the status quo. Brands must realise that they have to collaborate and adapt to transform challenges into opportunities.” Martin Raymond, Editor-in-Chief, The Future Laboratory
People can shop anywhere, anytime – that’s why a retailer’s job is not about the channel, about online or offline, it’s about acting with the consumer in mind, being creative, exciting and interactive and understanding that retail is a fluid, omni-channel experience.
FROM PHIGITAL (Convergence of Physical and Digital) TO VTAIL (Virtual Retail)
Shoppers are yearning for a multifaceted shopping experience. Speed and convenience are hygiene factors – no debate necessary. Brands have been trying to be inspirational, exciting and social in their online interactions by blurring digital and physical – owning the Phigital. Now Virtual Reality technology is further enhancing our 2D Phigital retail experience by making it as close to the real world as you can imagine – truly experiential. For example Chrysler launched a 4D virtual reality experience in 2014 that took Oculus Rift headset wearers inside the brand’s new 200 model as it rolled along the production line, recreating the real world in cyberspace. A clothing collaboration between SHOWstudio and independent boutique Machine-A used a different take on the same theme. SHOWstudio’s store in Soho, London was 3D-mapped and digitally rendered online allowing visitors to virtually walk through it from their phones or laptops.
VASSTIGE – Value Presstige
A rising middle class in the emerging economies of Africa, MINT nations (Mexico, Indonesia, Nigeria, Turkey) and a number of former Soviet Republics will be one of the key driving forces in keeping global retail on its slow path to recovery. ‘But in developed markets like the US and UK, the squeezed middle class is flocking to designer outlets to search for luxury at discount prices, giving discounters momentum.’ They want cheap, but cheap on itself is prevailing not to be enough. Vasstige brands have to have an angle, a philosophical difference rather than a product difference, and a voice to succeed. Even if you are Costco or Lidl you need to offer an aspirational experience and a sense of collaboration. Otherwise people will be lost to find a reason to buy from your store.
CASHLESS FUTURE and WEARABLE TECH – it’s real and worth it this time around
We are undergoing rapid change with how we relate to the transaction process and wearable technology. Devices are no longer telling us what to do; they are collaborating with us. We are at a breaking point, like we were with credit cards 35 years ago. Apple Pay, which is backed by Visa and MasterCard and uses fingerprint recognition, was launched at the close of 2014. According to the New York Times, in its first month, the cash-free system accounted for 50% of all tap-to-pay transactions in McDonald’s in the US, showing widespread adoption of the technology. And with Apple’s new smart watch set for release in 2015 the pace of change is set to continue. According to Deloitte, the global smart watch sector is currently estimated at £0.93bn (€1.2bn, $1.4bn) to £1.2bn (€1.5bn, $1.8bn) and it is expected to surge to £6.6bn (€8.6bn, $10bn) by 2018.’
SAMSUNG GEAR 2 SMARTWATCH BEACON ENABLED PAYMENTS
MICA SMART BRACELET BY INTEL AND OPENING CEREMONY
A strong, wise, entrepreneurial, financially independent woman is emerging. According to the Boston Consulting Group (BCG), by 2028 they will control 75% of global discretionary spending. Deloitte’s Gender Dividend Report states that, encouragingly, earned income among women in developing nations has been growing at a rate of 8.1% compared with 5.8% for men. Consider the Athena Women’s needs and engage with them like Nike has done with their 6000+ square foot ‘women’s only’ consumer experience store in Longbeach, California.
Blue for boys and pink for girls is an increasingly alien concept for Generation I, a gender-blind tribe made up of those born after 2002. Barbie, famous for her pink-themed lifestyle, was knocked off the number one spot in the US Christmas shopping race in 2014 for the first time in 11 years by Disney’s Frozen. It’s rumored that Barbie’s sales are down by 21%. Hamleys removed its gender related colour-coding on its floors upon backlash from its customers. Rid yourself of stereotypes if you want to resonate with this new generation. Beware, they have an incredible power when it comes to their parents’ purchasing habits.
SPRING KINDERGARTEN BY JOEY HO DESIGN, HONG KONG
FLAT AGE – Millenials & Boomers Blur
Think of Boomers as the grey-haired Millennials you’ve been studying up on. These Flat Agers are keen to ignore the date on their birth certificate and embrace the lifestyles of the much younger tribe. Brand owners have the opportunity to target the two tribes together making more of their marketing dollars. Place experience at the heart of your brand, use terms like artisanal, local, refined, bespoke, and learn to open conversations with them. Look at Celine and Kate Spade for inspiration. Celine features 80-year-old American author Joan Didion and Kate Spade features 93-year-old icon Iris Apfel in their latest campaigns.
IN CONVERSATION WITH
Ana Andjelic, Founder, Fame & Glory
In the past five years, luxury brands have faced the challenge of utilising digital tools whilst worrying about protecting their brand equity. Ana Andjelic expressed that to do so brands need to develop a brand experience promise, a strong point of view and a compelling story rather than communication messages. Brands need to have a role in people’s lives; for example, Tom Ford provokes, Burberry entertains!!! Luxury brands are no longer status symbols, but represent a culture and a specific lifestyle.
Jose de Cao, Co-Founder, Olapic
Jose de Cao shared his entrepreneurial story of entering the Visual Marketing industry and turning consumer generated content into brands’ most important asset. The key insight that blew Jose’s mind and convinced him of their business model was that 350M photos are uploaded to Facebook everyday and approximately 42000 photos are uploaded to Instagram every minute.
Measurement and data analysis is an important part of Olapic to further grow their business and keep their clients happy. Olapic measured that people are actually blind to stock images; however, when they see authentic photos their click through to purchase increases 40 percent.
“It’s mind blowing how companies have been doing marketing for years without collecting data on their visual communications. They have been navigating the waters with gut feeling, but that doesn’t need to be the new normal.” Jose de Cao, Co-Founder, Olapic
“The success of visual platforms and the amount visual searches online have pushed companies like Google to realise the power of Visual SEO – it’s the next big thing’ Jose de Cao, Co-Founder, Olapic
Ross Bailey, CEO and Founder, Appear Here
Appear Here Founder Ross Bailey has capitalised on the growing global entrepreneurial and experiential culture and is helping people and companies make their ideas happen – fast. Brands like Moleskine are able to be agile by trying and testing a location via a pop up and Showtime network is utilising physical retail spaces as a new media channel. For the Homeland TV series, they rented 4-5 stores from Appear Here rather than renting 50 billion billboards and got back more on their investment by investing in consumer experiences rather than pushing messages via billboards. Google is creating spaces where consumers can experience how their products can be used in everyday life.
“Our key learning is the more experiential the pop up store is the more successful it will be. A mistake technology brands often make is showing off their latest technology with big screens and lots if gadgets but it’s not about that – it’s about forging relationships with people.”
It is clear that we are operating in a new market paradigm.
Everybody has the opportunity to be a retailer, as long as they are delivering what the consumer needs at their time of need. That’s why we all need to be out there continuously testing our ideas – trying, failing, learning, collaborating and adapting – fast. Ross Bailey’s company Appear Here is enabling us to do just that.
But to make it clear, bricks and mortar are not going away. We are living in an era of Total Retail in which digital and physical are continuously blurring. Expect continued innovation in the retail world as physical brands try to engage the 70% of visitors who leave without making a purchase and as the digital world tries to replicate the excitement and socialness of a brick and mortar experience. It is up to brand owners to create environments where people want to spend their times IN or ON, regardless of the channel. Creating shopping experiences that adds real value to peoples lives.
Brands also need to understand that a successful retail brand is not just about intuitive and seamless technology; it’s also about shifting the mind-set of people who are delivering it. Companies need to undergo a lot of behavioral change to create a culture of collaboration.
Learning and adapting to this new way of behaving is our only choice. Martin Raymond did not put it as delicately, but to reiterate, if you are so set in your ways that you can’t capitalise on change and create a benefit to your business, you are doomed to become stale and irrelevant to the changing retail consumer.