“Tom Moore, Geometry UK, Head of Retail & Shopper writes for Management Today.”
Barely a day goes by without a well-known high street name’s collapse. Yet the rise of online retail does not spell the death knell of traditional sales.
While e-commerce grows by 14-15% annually across Europe and the US, offline retail remains flat, with annual growth of around 1%. Indeed, futurists that by 2025, 75% of sales will still occur in physical stores.
My view is that that online and offline will continue to co-exist with people moving seamlessly between the two. Those best able to master this hybrid retail environment will be the ones that respond best to a different trend –increasing polarisation of shopping behaviours to two extremes.
Convenience and experience
The first is the rise of the ‘immediate shopper’. In today’s modern, highly-connected world we feel busier than ever and ‘always on’. The mushrooming – and fragmentation – of media and information sources has compounded the number of choices we make.
On average, an adult makes an astonishing 35,000 decisions a day. We live in the moment and, as shoppers, dash for convenience.
At the same time,, we have seen the emergence of a second group: the ‘experiential shopper’.
Now, more than ever, people crave unique, curated and immersive experiences - everywhere. Some 45% of consumers globally are willing to pay more for a better retail experience and retailers report over 14% better conversion when experiences are offered.
What innovations meet those trends?
Retailers should take heart from mart ideas to win immediate and experiential shoppers now being pioneered by retail brands.
Sure to appeal to immediate shoppers is check-out free tech. Startup AiFi has launched a ‘scalable’ version of checkout-free store technology, beginning trials with a major grocery retailer this year in a 50,000 square ft store. This is far larger than Amazon Go’s 1,800 sq ft prototype set to roll out to six further sites.
Effortless ordering is gearing up. Fast, low-friction commerce has morphed into assistant-enabled utility. Alexa users who install Starbucks' mobile app can order preferred products at their favourite location by simply saying, ‘Alexa, order my Starbucks’.
A return to craft and authenticity is winning, too. When Coach opened its new NY flagship, it included an area for made-to-order handbags, including a workshop with full-time craftsman visibly working, doing repairs and personalizing items.
Staff-powered personalisation with wearables, is another growth area. Denim brand True Religion has armed teams with Apple watches connecting staff to consumer info as well as real-time inventory data. They create orders direct from the watch and transmit images of the product onto a 42” screen in-store. Sheer genius.
With an expanding armoury of innovation, a growing number of brands and retailers are happily engaging with very different, and polarising, trends of human shopping behaviour. Rather than fear for the future, they are confronting it to power innovation. Today, then, is above all an exciting time to be in the retail business.
Please click here to read the full article in Management Today.