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future trends for retail in 2025 and beyond

What can we expect in terms of trends for 2025?

AI is going to be increasingly used to help enable retailers to hone the personalised experience that customers are progressively coming to expect. AI will move closer to completing the 360 degree experience in collaboration with the human face of the brand, as well as the seamless operational delivery.

2025’s shoppers also won’t just focus on price but how a product was sourced and made and they will be making their purchasing decisions based on this. Savvy retailers can turn their supply chain transparency into a competitive advantage, ensuring that their sourcing and sustainability practices are both virtuous and transparent.

“Vintage” will continue to gain popularity. No longer seen as something only utilised by those who are financially strained, it is now being embraced by the “middle classes”, with many retail giants launching their own resale platforms to cater for them. This also links to the increasingly visible conscientious and sustainable decision making of their customers.

The focus will be about ‘closing the circle’ on commerce from choice, selection, use and then recycling and it will be this 360 approach that defines the story and accedes to what customers expect now.

How can retailers prepare?

One of the most important assets to the success of retailers is their workforce. As AI and technology increasingly become tools to streamline the process, retail employees can develop into “experience orchestrators” that can utilise the available digital tools and data insights to deliver optimal experiences for customers.

A strong example of a retailer that is responding to the current and future expectations of its customers is our client Foot Locker. Their latest store concept  revolutionises the retail experience, as it delivers an immersive, cultural and accessible premium shopping environment. Foot Locker has blended innovation with a passion for ‘sneaker culture’, leveraging customer insights to create an intuitive customer journey that leads to a path of discovery and delivers an exceptional customer experience.

The resulting stores boast a bold design, enhanced storytelling and an extensive product selection, with a strong commitment to sustainability, aided by technological advancements. Dedicated sections highlight the latest sneaker styles and a communal try-on area at the heart of the stores encourages customer interaction and promotes inclusivity of the sneaker culture. The Sneaker Hub is a dedicated area that enhances customer engagement and enriches the experience, by offering personalised services, omni-channel ordering options and unique FLX experiences.

Foot Locker’s iconic brand ambassadors, known as the Stripers, benefit from cutting-edge technological tools to manage the omni-channel inventory and streamline the in-store payment process, delivering optimal customer service.

The future of retail won’t just be about selling products, but about creating experiences and building trust with customers, which will result in a life-long and lucrative relationship for both.

A Sustainable Summer for Paris Olympics 2024 Megastore Pop-up

London 2012 Megastore

In 2012, rpa:group were pitched to create the retail environments for the London 2012 games, which included the 40,000sqft megastore in the Olympic Park in Stratford, which accommodated 65,000 customers a day. All areas of rpa:group’s expertise were set to work to design and deliver in excess of 100,000 sq. ft of retail space, which aside from the megastore also included Kiosks around the UK and the  ‘Pop-up’ shop in Hyde Park, the largest pop-up store in the world at the time.

The remarkable thing about the retail environments created for the London 2012 games were that they were so sustainable, in that most materials used to construct them were able to be completely recycled after the event. It was encouraging to see that the sustainable legacy we helped create for the 2012 Olympics has been replicated in Paris.

London 2012 Megastore Olympics

 

Paris 2024 Megastore 

Located right in the middle of a roundabout, but still offering lots of space to browse and located next to The Place de la Concorde, the Paris Olympic megastore has been built to accommodate thousands of tourists a day. Clad externally in wood to add texture, it has a sleek and modern appearance and features the Olympic Rings and the Paralympic Agitos alongside its unique logo, a legendary Mascot of the historic French hat The Phryge and the Eiffel Tower,  the city’s iconic landmark.  As part of the sustainability statement, all will now be repurposed or recycled, proving that temporary retail environments can be striking and demonstrate creativity, while still being sustainable.

          Paris Olympics Megastore 2024          Paris Olympics Megastore 2024

 

 

 

 

 

With the London Paris Olympics successfully over, Los Angeles has some big shoes to fill, as the saying goes. It will be exciting to see what progress will be made in the next 4 years and how sustainable design will evolve for the 2028 LA Olympics.

Airports are becoming destinations in their own right

A surge in the middle class globally, rapid urbanisation, and a rise in disposable income has led to an increasing demand for air travel. Nowadays, more people are choosing to fly for business and leisure, and airports are experiencing an increase in passenger traffic, which is driving the need for additional services and infrastructure. Research shows that the global airport services market is expected to hit around USD 485.99 billion by 2032, growing at a CAGR of 17.09% during the forecast period 2023 to 2032.

For millions of us, airports are as much associated with shopping as travel, with retail still the primary experience at airports, prompting one airport retailer to comment that they are quite simply “huge shopping centres with runways attached.”  Such is the demand for retail space, that large airports like Heathrow have a number of applicants for every retail unit, and have become one of the most sought-after retail locations in the world. Each shopper is around for just 60 or 70 minutes on average, and despite being considered a “captive audience”, they still expect the overall retail experience to be effortless and appealing. The challenge for retailers is that the airport trading environment is nothing like the high street and they are having to work even harder to deliver to customer expectations, as the high street also continues to evolve and to create truly engaging experiences.

For designers, airport terminals can throw up a number of challenges, such as awkward spaces, negotiating brutal commercial deals, retail design management and demands for extra-ordinary concepts and short dwell-time potential. However these can in turn stimulate truly creative responses with hard-edged commercial realities.

We are also seeing a different design approach to Airport lounges, with what were previously rather mundane spaces, now being looked at by designers in the same way that a high-end hotel concept would be. They are gearing towards creating more unique and personal atmospheres, with design elements and technology that are not generally seen in commercial projects. In addition, the boundaries between leisure and retail have become blended propositions, which means that exclusiveness in retail can now filter into these ‘exclusive’ lounge spaces and deliver a VIP experience – mimicking the experiences of the finest shopping malls.

rpa:group has extensive experience in terms of designing and project managing various types of Airport experiences from First and Business class lounges to Retail, Restaurants, Airline check-in and more, which makes us the ideal partner for your next airport lounge project. We are also familiar with the process of obtaining the necessary external and internal airside passes and of navigating stringent airport approvals, managing the coordination of approved consultants and site access for a range of schemes. If you would like to know more, or need our help, please get in touch.

Why the joy of shopping in stores is back – for good!

PICKING A CAUSE

For starters, self-reflection and internalisation has been amplified during the pandemic. People have begun to redefine themselves, evaluating their fundamental values and life choices. As they emerge, they continue to flex their augmented identities online whilst also engaging in the ‘real world’ through common aims. In addition to realising personal goals, the media coverage of social issues has seen the number of subscribers and activists of ‘good causes’ swell.  

In a global study, 91% of consumers said they were likely to switch to a brand that supports a good cause, given similar price and quality. 92% said they would buy a product with a social or environmental benefit given the opportunity, and 67% said they had done so in the past 12 months.  

Beyond the noise of virtue signalling, people are looking for allies to emotionally support and align themselves with. Evaluation of a brand’s attitude to quality and value is now being applied to its response to a global society. Customers want a genuine commitment to all aspects of a brand’s presence in their lives and will jettison relationships that won’t commit. From Dunelm and the Retail Trust’s RIADA campaign to Nike’s Jordan Brand Wings program, there is a diversity of choice on offer. 

Sustainability has also become only one element of customer brand choice. Brand governance, and a 360 degree approach to sourcing, production methods and recycling are all non-negotiables for brands looking to maintain deep-seated loyalty. Inclusivity and diversity offers a world of acceptance and opportunity to engage. Our clients Tommy Hilfiger having their own collection of adaptive fashion, while Adidas has introduced their “Lasting Change Now” policy. 

Smart, human-centric brands will engage, continue to invest in their commitment and watch relationships with their customer community flourish.

CONNECTION THROUGH DISRUPTION

Joy of Shopping

DOES SIZE MATTER?

Whatever the store size, it’s an opportunity to celebrate moments of engagement

This is where we can truly learn from luxury retail, which has, since its inception, exclusively provided the ‘white glove’ level of service to its clients. Sales staff are, more than ever, advocates of the brand and need to be invested-in to be able to immerse themselves fully in brand, environment, and their reason for being there. Committed to this knowledge and belief, the investment is communicated directly to the customer in a genuine way and forms authentic engagement.

The physical journey starts with the storefront, traditionally analogue and criminally under- used. The potential for service windows, pick-up lockers or content-based showrooming is enormous. Content can be personalised through touch, AI or NFC and can use scale and relevance to wow and drive those snappable moments that support online interaction and multiple channels, even before entering the shop. This can engage all the senses and drive the decision to enter from the street in a way that scrolling or mannequins never can.

The reduction of stock-holding resulting from more sophisticated fulfilment allows for smaller stores. This encourages a more personalised or specialist service – perhaps an opportunity to develop appointment based shopping to deliver the ultimate personalised experience – including fully programmed and personalised sensory theatre that is derived from data profiling from online sources and choice-shared customer data.

 

THE MEDIUM IS THE MESSAGE

Aside from levels of human service, how can physical spaces continue to engage? Agility and adaptation are the key, with cues from pre-covid trends.

Chief amongst these is the homogenisation of offers according to experience. Dwell spaces such as coffee or refreshment points are still valid as gathering spaces within apparel stores – Tommy Hilfiger’s German coffee shops on store premises offer some striking interiors that are anything but ‘flat-white’.

In-store cinemas or entertainment hubs extend the physical audience beyond the common demographic and bring depth and diversity to the brand experience. Traditional store functions need further disruption. With the correct technology, cash desks are defunct as a physical operation, whereas clear ‘hubs’ for human interactions never will be.

 

As this single point of service becomes assimilated into the overarching store experience, we need to consider its relationship to other functions such as the changing rooms. A subtle shift of perception may be considered. Perhaps the changing room becomes the ‘Dressing Room’ – a place to emerge from, having already purchased, primped, and preened, beginning your reinvention from the moment you step out into the space – becoming an intimate part of the retail theatre itself.

 

Joy of Shopping

Flexible and agile spaces allow for experimentation. They allow brands to TRY, knowing that human experience can result in success or failure; but always garners respect and that positively engaging with customers can lead to better things.

Showrooming allows brands to service the most niche of their customers – but widens genuine experience in the process.

R.E.S.P.E.C.T….FIND OUT WHAT IT MEANS… 

Alongside a personal re-evaluation of a work/life balance, potential customers have come to treasure their time and make careful choices about how they want to use it. The workforce is increasingly rejecting overtime in favour of quality-time, so brands must work harder to bring value to their experience and deliver compelling take-aways, to support long-term relationships.  

Effectiveness of brand communication is one consideration in optimising this precious resource, and in-store the use of multiple channels is the means to achieve it. Rather than being a static wayfinding device, internal messaging needs to be able to respond instantly to the changing needs and expectations of the customer. In everything from recommendations, promotions, and personalisation, right through to behavioural expectation in this era of increased hygiene, brand communication needs to bring seamless, reassurance and ease in delivery. With this, the customer can focus on their key-decision making in-store and have the experience reflected on-line.  

OLD HABITS…

During the pandemic, our increased adaptation to online connectivity and developing technologies, combined with our self-discovery to perpetuate our ‘analogue nostalgia’ – the same nostalgia that saw increasing vinyl sales, home-baking and home- making in the last few years. Distracted from our work-life “hamster-wheels”, we’ve rekindled a sense of adventure and with it, acceptance of the new and different.

A survey of 22,000 participants found that almost every single one has headed to a physical store after the pandemic, even if 80% said they would continue to shop online. Customers are carrying-on their search for this fusion post-pandemic, so it is the responsibility of brands to engage with this joy and realise the best of both worlds in their brand approach.

Joy of Shopping

SMOKE & MIRRORS

We as humans crave a manageable level of tension, and we power it through self-discovery and rekindling our sense of adventure.

We talk about frictionless processes and seamless experiences. Technology supports this, but should do so invisibly, as the seatbelts on our retail rollercoaster ride. The other way technology will succeed and throw off its smoke-and-mirrors reputation is by enhancing the other senses within the physical experience, creating theatre and suspense and enabling fulfilment far beyond it.

FUTURE NORMAL

If brands can listen and innovate, customers will respond with open eyes and hearts.

As sad as it is to see familiar long-established brands disappearing, it is human nature that all eyes are on the voids they leave, and the anticipation of the next big thing. The power and impact of ‘the different’ should not be underestimated, neither should the opportunity to evolve and improve.

Humans adapt organically, brands need to be cultivated to evolve. They provide food for the soul; experiences to make us rich, but not at a cost to the planet.

Whether through a surprise charity-shop find, a personalised big-ticket item or an in-store performance, the joy of discovery borne out of variety and physical human interaction will continue to fuel our imaginations and the direction of travel for brands post-covid for many years to come…

The department store dilemma

So, what is to become of these extinct department stores? Clearly something needs to, because space that is no longer fit for purpose has a materially adverse effect on society. Mark Burlton, MD of Cross Border Retail Ltd, a global independent retail real estate business agrees. “Even though many have heritage and are significant landmarks to which people hold an attachment, empty or abandoned buildings emit a sense of local economic distress and impact the perception of the surrounding area.”

This is when we can draw inspiration from the past. For hundreds of years, our high streets were buzzing and multi-faceted hubs, serving the local community with a thriving mix of retail, residential, services and hospitality. Over time, retail cannibalised these and the bubble has now burst.

Nigel Collett, CEO of architecture, design and cost management consultancy, the rpa:group states that what the pandemic has emphasised, is the value of community. “During lockdown, we have spent an unimaginable amount of time in our own neighbourhoods, relying far more heavily on local shops and services during this time.” He adds that this feeds into something referred to as hyper localisation, where the services providers and retailers of a community can directly understand and respond to the needs of the people living within it. “As the new normal will see many more of us working flexibly and spending more time at our homes and surrounds, it is the right time to reintroduce more community relevance and empty department stores can help,” he says.

This is because as we live a more local existence, our essential needs all need to be met and there is still a requirement for some retail, but it will be condensed. There is also opportunity for the introduction of more pop-up, adaptable event spaces, leisure and hospitality and the provision of fitness and healthcare centres. With flexible working becoming the norm, there is going to be a need for co-working spaces and “business hubs” and childcare facilities to support these, which can be accommodated by vacant department stores. “Large empty stores are usually spread over three of four floors and the space can be carefully divided up. Natural daylight is a challenge as their floor plates tend to be large, but there is scope to introduce light-wells, which make the spaces more versatile”, states Nigel.

“Structurally, many department store buildings having flat roofs, and there is opportunity to build onto these and have outdoor entertainment spaces and roof gardens or airspace hotels or residential units,” adds Nigel. Mark agrees  “Airspace construction tends to be more modular and more easily supported by the existing structure of the building. Including residential will bring more people back into towns and city centres, which is what we need.”

Like anything, there are challenges that need to be overcome.

At the onset, a detailed study would need to be carried out to foresee exactly what the needs of the local community surrounding the empty store are and to prevent any replacement being a “five minute wonder”, as Mark puts it. “Staying relevant and responding to these is the most important first step, to ensure the social and economic benefits of repurposing the retail space. A local solution needs to be taken into account and this will result in diverse outcomes”, explains Mark.

As an example, the old Debenhams site that occupied 80,000 square feet in London’s Southside Shopping Mall is being transformed into London’s first active entertainment venue, which includes a Japanese E-karting area, bowling lanes and various hospitality offerings.  Further afield, an old Macys store has been transformed into a secondary school. “In both of these instances, how these buildings are repurposed is in direct relation to answering a local need,” states Nigel.

Like anything, there are challenges that need to be overcome. Mark warns that landlords will need to be convinced that a change of use is in their best financial interest. “Local councils need to lend their support to help uplift the area. From a planning perspective, the recent government guidelines stating that planning permission is not needed for change of use needs to be approached with caution.” Nigel agrees and adds “Architects can help ensure that the character of the building is not lost and that the space is divided and utilised in the best way possible, with full safety and quality practices in place.“

We also cannot ignore the fact that repurposing multi-level retail stores is expensive and architecturally challenging and all the more reason why an experienced architect is essential. And yet, done properly, these present a strong opportunity to transform dead spaces into engaging and commercially viable ones that are adaptable and future proof, no matter what may lie ahead.

What will 2021 and beyond hold for Architects?

A RIBA statement in October last year, revealed that over £3.5 billion of work was scrapped, with a further £7.5 billion on hold. There is no doubt that times are tough and as a result, competition is fierce, which is bringing about a “race to the bottom” on price. It is up to the industry to retain consistency and standards without compromising on quality, which occurs when costs and corners are cut.

For architects involved in retail, there are additional challenges due to the pandemic escalating the popularity for online shopping. The customer journey is changing, and we need to respond to this across both the retail and hospitality sectors, by looking into placemaking and taking a multi-faceted approach. The role of designers should be transforming experiences and collaborating in a more community-driven environment. There are going to be opportunities for architects as spaces need to be repurposed to adapt to the rapidly changing market and make them work differently.

Post pandemic, making people feel safe is going to be an important criteria in how space is utilised. Airport lounges for example will increase in numbers and popularity, as people feel safer in less crowded spaces and will be prepared to pay for this premium.

The pandemic has highlighted the opportunity to be innovative. We will start to see the regeneration of town centres, with vacant office and retail units making way for more placemaking facilities, with spaces for people to live, work and play.

What of rural areas? There is concern over the impact that Brexit has had on these communities, which have seen funding all but disappear. Rural estates need to be optimised to work a little harder, and to look into opportunities for change of use, such as including holiday accommodation, conference, leisure and lifestyle facilities.

And what of London and the larger cities? Interestingly, certain sectors respond more slowly to change, and what is referred to as “critical impact” can take up to three years. What we will start to see more of is changes to the profiles of buildings and some environmental changes, with more and more green spaces.

Overall, there is optimism about the residential sector. The large government debt will see the need for more jobs to be created, to generate taxes to help the economy recover. This will result in more employment in the construction industry. Advancements in construction methods will be explored more than ever, prioritising the use of off-site modern methods of construction (MMC) to deliver homes at a faster pace than traditional methods.  Schools can also take advantage of this form of construction to speed up the shortfall.

However, off-site needs to think very carefully about the environment and sustainability, for what is basically moving boxes of air over vast distances. A way round this is to source things as locally as possible.

There is no doubt that sustainability is going to be increasingly important regardless of sector. With government targets set to achieve net zero carbon by 2050, advancements in technology can support this initiative by utilising collaborative tools such as BIM level 2, which gives an accurate picture of  initial costs and whole life costs, encouraging clients to implement sustainable solutions upfront. BREEAM (Building Research Establishment Environmental Assessment Method) will become an increasingly important factor in architecture, being the world’s leading sustainability assessment method for master planning projects, infrastructure and buildings.

In conclusion, there are certainly going to be challenges, but also opportunities that arise from the shifting needs for buildings and spaces and how we will use them.

Generation Z are the unlikely saviours of physical retail

According to Bloomberg, around 95% of them visited a physical shopping centre in a three-month period in 2018, as opposed to just 75% of millennials and 58% of Gen X. Also among the researchers was The Grocer, which undertook a major pan-European study that targeted 50,000 adults across 11 countries. What was revealed, was that nearly 22% of Gen Z (aged 18-24) do their research and purchasing in-store, compared to the milennials (people aged 25-34) who came in at just 14%.

In light of the Covid-19 pandemic further bolstering online shopping, the convenience of which already being long accepted; why would this group seek to congregate in shopping centres and on high streets? We strongly believe that it is the need for social interaction that is driving this. Think back to the typical “all American” teen movies and inevitably, the social setting for public interactions was “the mall”. However, back then a few fashion retailers and a fast food outlet or two sufficed in keeping the typical teen entertained, but not anymore.

The Generation Z shopper wants an experience that offers ease of use, entertainment, flexibility and immediacy; in other words, much the same as if they are having an online interaction and it is up to the brands to create environments that support this. It is all about breaking the mould, bringing down the barriers, using a lot of imagination and not being afraid of trying new things. In short, there is a need to facilitate the opportunities that create memorable moments and experiences for the Generation Z consumers, which when successful will make them the ultimate brand advocates.

A panel discussion about the future of shopping centres discussed this in detail at the RetailExpo in London. On the panel was Kathryn Malloch Head of Customer Experience at Hammerson, who summed it up by stating, “They must be entertainment venues and not just about shopping.”

Sue Shepherd, General Manager of London Designer Outlet in Wembley, part of the biggest urban regeneration project in the EU agreed. “More than ever, shoppers want an experience, rather than just the option to purchase.”

There is no doubt that retail landlords need to be supporting this and looking at the use of space, to allow for the diversification of the experience. As Kathryn explains, “Traditional anchors are moving. People are coming more for a day out and we need to look at the mix of leisure and retail.” She also went on to explain that there is an opportunity to repurpose redundant department store space, in order to facilitate this growing demand for a variety of experiences. “ People want to do more, rather than buy more,” she added.
A strong example of this is Birmingham’s Bullring, where the mix is constantly changing and evolving. Kathryn explained that there is a strong drive to support local brands, that is involving a move away from the mass market, into something different. This is being bolstered by offering less long-term and more short-term rents, an increase in pop-ups and space for independents, supporting the all-important appeal of localisation.

There are other things that shopping centres and high street retailers can do to attract the Generation Z demographic; events being one of them. Interactive digital displays, increased VR, light shows and artist and celebrity experiences go a long way in increasing the all important dwell time. If the shopping area is located where events happen anyway, then finding ways of making the customer experience easy and effortless, go a long way to increase loyalty.

Sue Shepherd explains. “In Wembley, there are events happening frequently anyway and our focus is more on the overall guest experience.” The solution was to launch a digital experience called “drop it”, which allows customers to leave shopping in the stores, which a concierge collects and arranges to have delivered to their homes. It is all about identifying “pain points” and responding to them.

Research plays a key part in discovering what drives influencers and spend. As previously mentioned, although this generation prefers physical retail, they still want the convenience of the online experience. Developing street style apps, offering click and collect and free delivery and using analytics, will all help to deliver this. Ibeacon and tracking technology allow the affinities between brands, based on consumer behaviour to be analysed, creating better zones and shopper journeys. The relevance and tailored communications that can be offered back to customers as a result of this, via for instance Geolocation software, cannot be underestimated.

In the shopping centres and high streets of the future, we are more likely to see an increase in curating consumer lifestyles. These may well include bespoke offerings such as supper clubs, sushi masterclasses and exclusive events and rewards for local residents only. We are also likely to see an amalgamation of areas, to include mixed-use developments more co-working spaces and possibly even medical and educational environments.

In conclusion, they will become giant “Ecosystems” that facilitate a lifestyle and answer a need. There will be a frictionless experience across brands. They will be very high-tech, but there will always be a place for good service, personalisation, and engagement.

value and values…

The speed at which retail theory evolves has meant that the language and terms we use quickly become overused, obsolete and obfusticated. This means goodbye to ‘experiences’, ‘omnichannel’ and ‘phygital’ and our associations with them. This also reduces our ability to clearly define our brief and brand expectations. However, there is some enduring retail language worth investigating further, to gain a more insightful view of how we might approach this evolution.

Let’s consider ‘value / values’ as a persistent term, associated with retail…

A brand’s value could be said to refer to its customer’s relationship to the product or service and the financial worth attributed to it. As this is calculated on investment in marketing versus uplift, and is exclusive of cost and margin it is sufficient to measure Return on Investment. However it begs the question: Where is the longevity in the relationship? In this sense, Value is subjective and reliant wholly on a brand’s marketing skills to establish and maintain this. The ‘storytelling’ is unilateral, non-interactive and lacks true engagement. We experience this historically in the cosmetics industry, witnessing a pot of cold-cream, increasingly miniaturized, slathered with impenetrable pseudo-scientific jargon and afforded an exorbitant price tag related to perception, but not necessarily performance. Brand loyalty in this case is garnered only by the psychology of limitation and the need for ‘the latest’, not necessarily ‘the best’.

A brand’s Values however, when carefully considered and delivered, can significantly alter this dynamic. Values are inherent components of the human individual that govern selection in most things. They are subconscious and can be subjective, but share commonality that is regardless of gender, race and social background. If you are able to appeal to the fundamental psychological level of shared human values, empathy is generated, inclusivity prevails and lasting engagement is the result. Let’s not forget that humans process their relationships with brands, with the same part of the brain that they use to generate and evaluate friendships and social bonds. If brands and designers engage with and stimulate this process in the same way, through generating genuine empathy and understanding, a lasting retention of the brand experience is created. It results in authentic engagement, and trust – friendship in other words.

So, the ultimate question no doubt is how do designers appeal to these values? Reflecting on the time-poor nature of many consumers, the brand message needs to be focused both on individual relevance and wider cultural inclusion. Generosity, inclusivity and wellbeing are just three arenas in which we to battle for the hearts and minds of customers. We see brand generosity increasingly reflected in conversion of prime retail space, into complimentary service areas. L’Occitane and Lululemon, both on London’s premium Regent Street estate, dedicate their first floors to a focused extension of the main brand. Make no mistake, these are conceptually indulgent, committed, beautifully designed environments, devoid of direct sales and suggesting a wider world beyond the brand. Inclusivity and empathy with alternative social and cultural sectors generates that fundamental feel-good factor, especially alongside the feelings of indulgence during purchasing. US online retailer Zappos understands this and parallel with their retail website has a compelling, but most importantly, easily realised methodology of donating used goods. The customer simply prints and attaches their own label to a box of donations and drops them in the post. Domestic and foreign charities benefit, and allow selection of specific destinations. Physical ease and altruism are a winning formula

Wellbeing and social conscience continue to be enduringly historic on the high street. Arguably, Anita Roddick began to extol the virtues of brand Values with the first UK Body Shops in the late ‘seventies, infusing the brand with ethical sourcing and moral leadership. That trend extended to physical health over a decade ago with Innocent Smoothies 5 for 5 cafes, aiming to serve 5,000 people their 5-a-day for a fiver. We now see slowly increasing focus on mental wellbeing, with active wear brand Ivy Park consulting mental health charity MIND, to help positively empower women by increasing self-esteem. Similarly Boots is focusing on positive engagement with teens regarding their mental and physical wellbeing.

How do designers initiate this process with clients? It all leads back to Values. We need to remember that our clients are human too. Engagement and empathy with their brand aspirations is just as important as translating it for their customer. Understanding the traditional ‘goods-for-money’ transaction is dead. We need to embrace the fact that information is the new currency and investing in understanding any customer or client, taking time to listen and empathise is going to give us a return on experience.

essential retail design trends for 2019 that can’t be ignored

 

01.  UNDERSTANDING THE FREQUENCY OF CHANGE

The speed at which things change visually with shopping websites and the constant advancements in technology, mean that customers have come to expect the same frequency of change in physical stores. This means that with the exception of grocery stores, (where customers want and expect familiarity), “Bricks and mortar” retailers need to allow for the customer journey and experience to be refreshed regularly. Because, when it comes to retail environments, flexibility drives engagement so there is a very real need to create environments that are easily adaptable. This means that the displays, the spaces around them and how these are used, is more important than ever.

02.  ENCOMPASSING THE RETAILER HIERARCHY

It is during the design process that the need for flexibility first needs to be considered, and it is both the designers and the manufactures who need to fully understand what the retailer motivations are. There is essentially a hierarchy of needs to be taken into account. These are: delivering engagement, experience, flexibility, convenience and using quality materials that are fit for purpose, all of which when implemented collaboratively, will generate well designed, flexible and engaging retail environments.

03.  CREATING BOTH EXPERIENTIAL AND SENSORY ENVIRONMENTS

Store design must support experiential and personal environments, that resonate with each consumer on an individual level. We are sensory creatures and sight, sound, touch, taste and smell when utilised synchronistically, deliver an engaging sensory experience that naturally leads to empathy. This in turn creates longevity of a relationship with a brand. In other words, stores need to be created to “sell from the inside, as well as the outside”.

04.  ADAPTING TO SHRINKING SELLING SPACES

With many physical retailers continuing to pay premium rents, stores need to be designed to allow for the maximum use of space and purpose. With customer perspectives of physical space in stores also changing, selling space is morphing into experiential space – and the proportions of purely sales versus engagement space, needs to be adapted as such.

05.  ENABLING THE CHANGING FUNCTIONALITY OF STORES

We are seeing stores becoming show-rooms and distribution centres, as well as conventional purchasing platforms. Offering fulfilment services such as “click and collect” is increasingly important and innovative physical retailers are merging online and offline experiences with the offer of convenience and ease of access. Here, customers can choose how much they wish to engage with the store. They can obtain product information directly from knowledgeable staff members face-to-face, (something online shopping cannot provide), or simply pick up a pre-ordered online purchase from a locker, while passing by.

06.  TRANSITIONING THE ONLINE TO PHYSICAL ENVIRONMENTS

An increasing number of online retailers are opening physical stores. The function of these are not necessarily to buy product, but to provide an all important physical interaction with the brand, offer customers product trials and the opportunity to acquire product knowledge from informed brand representatives. This strengthens the customer relationship with the brand but for this to truly work, the design and fixtures need to bridge the gap between the online and physical stores – creating an easily identifiable synchronicity of themes and colours that are inherently recognisable within both the online and the physical stores.

07.  EMBRACING TECHNOLOGY TO DELIVER ENGAGEMENT

Technology used accurately, will continue to go a long way to deliver engagement. The use of touch screens, in-store tablets, virtual reality and devices such as smart mirrors, are all helping to deliver this. Mobile usage continues to grow and retailers are increasingly seeking to capture the attention of customers in-store by utilising tools such as iBeacon technology, to “push” information specific to them. Some brands are opting for portable tech, which continues to create opportunities for brand interaction, even when the customer is no longer in the store. Tommy Hilfiger, for example, is using smart tags in their clothing, that the customer chooses to activate. These then track how often and where the item is being worn, rewarding the wearer accordingly.

08.  RECOGNISING THE IMPORTANCE OF SERVICE DESIGN

If anything, good service interactions are as critical as well-designed environments and also need to be “designed” to form part of the entire store experience. Training and support is becoming increasingly essential, to ensure that staff have the brand and product knowledge that allows them to be a key part of the delivery of the full sensory experience to shoppers.

 

evolving retail: why retail brands are moving from traditional retail spaces

We will see physical shopping undergo a dramatic transformation and in the next few years, it could morph into an activity that is driven almost entirely by experiences and interactive technology.  Stores will become places where customers get to try things on, or test and interact with products in person but don’t actually buy anything at the time, opting instead for the convenience of delivery of their purchases at a time and place that suits them. So, if shopping is becoming all about the experience, then for some retailers, there is a need to adapt their stores,  in some instances even extending their presence beyond them, in order to deliver a truly immersive and flexible experience to their customers.

Pop-ups have been around for a while now and won’t be going anywhere fast, because how better to offer flexible and immediate engagement with prospective customers? We see pop-ups within larger “host” stores and within shopping malls, but what about within transport hubs, gallery spaces, markets and at events? The beauty of the pop-up is that intrinsically the essence of it is temporary, providing intrigue and a sense of urgency that will entice customers, who by the very nature of being human, do not want to “miss out”.  Benefit Cosmetics recently devised a novel way to boost brand experience, by opening the world’s first “Beauty and Brows Popup Shop” close to the Glastonbury festival. The drive-thru format enticed festival-goers stuck in crowds and traffic, to meet beauticians and shop assistants, who provided them with advice and goodie bags.

A step beyond a pop-up, is offering mobile shops, that actually take the brand to customers –  something we think we will be seeing more of.  An excellent example of this is Casper, a USA mattress firm, who has rolled out “napmobiles”, where potential customers can road-test foam mattresses inside a refurbished camper van, before electing to purchase online. However, retailers don’t all need to be mobile or have a pop-up to offer immersive retail experiences to their customers. As long as they can delight and engage and leave a lasting resonance, then brand loyalty will be formed and retained.

The Museum of Ice Cream is a great example of this.  Being neither a museum nor a shop, it sells tickets to a series of garishly coloured installations in New York, Los Angeles and San Francisco. Once inside, the very essence of the joy associated with ice-cream is morphed into an experiential interaction, as visitors find themselves immersed in a theme-park type of experience, with engaging things to do rather than buy – such as a giant pool of sugar sprinkles to jump into, an ice-cream themed climbing wall and a giant banana swing.

In the UK, a pioneering social enterprise called Meanwhile Space has forged a series of ground breaking partnerships with local authorities, public bodies and companies to utilise vacant and unconventional spaces, such as disused office blocks and vacant railway arches, turning them into retail and hospitality spaces.  Similar to Box Park, Blue House Yard is one such example, and is a redevelopment and re-imagining of an empty and underused site near Wood Green station, that today offers the local community a bustling mix of retail, hospitality and social spaces, creating local interest and breathing new life into a dying area.

The House of Vans in London is another thriving location and one where art, music, BMX, street culture and fashion converge. The 30,000 square feet building encompasses a cinema, café, live music venue and art gallery, while the bottom floor holds a concrete ramp, mini ramp and street course. Designed by skaters, the park is free to use and customers are encouraged to walk in on the day. What The House of Vans has very cleverly done, is create a space that epitomises its brand identity, by creating a fully interactive and experiential space where young people can shop and socialise.

Whatever the space, retailers need to ensure that they offer quality, as well as originality,  creating a point of difference from competitors. In the same way, customers have also come to expect the unexpected, and providing this will help deliver a key point of difference and form an all important lasting impression.

Why Symbiotic Retail Space Works…

There is no doubt that big changes are afoot and retailers need to adapt in order to prevent themselves from toppling over the edge.

Customers have come to expect more from their retail experience than just the exchange of goods for cash. They can easily undertake this sort of transaction online, so if they have taken the time to venture into a store, they want to be entertained, engaged with and to be made to feel part of a community. With the interaction between retailer and customer becoming more personal, and technological advancements meaning that stores are becoming more like showrooms; stores no longer need to tout everything they offer. Gone therefore is the need for gigantic retail spaces in which to display lots of merchandise. With many retailers still beholden to long term rentals or not wishing to give up prime locations, what does this mean for all the resulting surplus space?

The good news is that excess space can be turned into a great opportunity for retailers. Increasingly, we are seeing some of this being used to accommodate “pop-ups”, which is a perfect example of a symbiotic relationship in that the host retailer benefits from extra capital, the pop-up retailers are provided with a low risk platform to trial their brand to a relevant target market, and customers are offered a more varied environment to engage with.

We are also seeing space used for integration of brands, such as Sainsbury’s incorporating Argos concessions in their stores, which in turn drives footfall and looks to transform the grocer into more of a department store. Not to be left behind, we are seeing some department stores also adapt to new demands and expectations, such as Selfridges incorporating a “silence room”, the perfect antidote to a busy and often overwhelming retail environment.

Utilising space to incorporate coffee shops and restaurants also increases customer dwell time. Book shops have been successfully doing this for years and our client Tommy Hilfiger has recently added a People’s Place café for customers to linger over a latte. The House of Dunhill was an early pioneer to offer some “non retail” space to add value. We worked with their internal team to develop the retail and club concept in their Mayfair flagship, which gives members access to a suite of facilities; including a historic humidor, traditional gentleman’s grooming salon, private club rooms, dining and a private cinema.

Lululemon offers free yoga and fitness classes in many of their stores and we helped our client Adidas transform an original bank vault in a listed building in Barcelona into what has been dubbed “The activity room”, which is used for fitness classes, product demonstrations and guest appearances from sports celebrities.

Ultimately, whether extra retail space is utilised for pop-ups, hospitality and leisure space, or as a social “hub”, it is essential that it both compliments and reinforces the brand ethos of the retailer that offers it.

omnichannel is the only road to success for car dealerships…

For many of us, the stereotypical notion of buying a car involves an over enthusiastic salesman, peddling his deals among rows of shiny motor cars on a large forecourt. But changes are afoot…The technological advancements that can be seen and felt in retail and hospitality environments, combined with the relentless march of online selling; have not spared the motor sales industry.

For starters, consumers are increasingly embracing the web as a means of purchasing goods and services. According to research, in 2017 approximately 87% of U.K. consumers have bought at least one product online in the last 12 months, with the UK being second only to Norway in making e-commerce purchases in Europe.

Car purchasing is becoming no different. Accenture recently reported that some 80% of all research into buying a new car is conducted online, with car buyers subsequently visiting fewer than two dealerships on average. So, while physical car dealerships are still relevant, it is crucial that automotive retailers find innovative ways to address this change in consumer behaviour. It is more important than ever that car manufacturers and dealerships create brand exposure in not only the digital, but also the physical world, before the actual need to purchase arises.

The Millennial generation is the fastest-growing auto retail segment, with 35% of all loans originating from this generation and a 49% growth in Millennials’ share for lease contracts from 2012 to June 2016. This generation is clearly interested in acquiring new vehicles and represents a lucrative segment for those dealerships who can make the connection with this group of car buyers, being fully aware and prepared for the fact that they are arriving at the car purchasing process with some completely new expectations.

Older generations are also picking up some new habits. This is because we are all conditioned by Amazon and other online experiences, and increasingly follow omni-channel customer episodes: We research, select and buy cars in different ways to our non-digital predecessors, and increasingly expect the same capabilities and quality of service when shopping for cars as we are accustomed to experience in other aspects of our digital lives.

In the physical world, the wealth of technology is becoming more prominent and is increasingly being used in the automotive industry to drive customer engagement. There are various examples such as Audi launching their very first Digital Showroom, bringing virtual reality (VR) technology and with it a rich and interactive experience, through simulated test drives on London’s Park Lane. Similarly, Jaguar Land Rover offers potential customers a virtual tour of life-sized, as-yet unreleased models, illustrating technical details through added animations. BMW, was also an early adopter of in-store digital technology, offering dealers worldwide a multi-lingual solution, displaying information and promotional material in showrooms, that can be controlled at a local level to meet the specific needs of a dealer’s demographic.

These days, more and more car manufacturers and dealerships are also electing to trade away from the traditional “out of town” forecourts and are instead taking up residence alongside other retailers in shopping centres and on high streets. The benefits to consumers are that they are offered more diversity while shopping, and that they get to touch and experience these cars, creating a connection and a familiarity with the brand, before the purchasing need arises. For retailers and landlords, it is a valuable use of excess space, and leads to an overall increase in dwell time.

For instance, if you visit Bluewater shopping centre, you’ll see a Hyundai store among all the usual retailers. The location of all of the cars out on test are displayed in-store, which creates an engaging visual for passing shoppers. Customers can visit the store to research Hyundai options and make their purchase, with the cars delivered to a place of their choosing. Bentley has opened in the middle of Westfield Stratford, with the introduction of their luxury studio that allows customers to design their bespoke Bentley onsite. BMW Mini has a presence in Westfield Stratford and Tesla has opened showrooms in Westfield White City and Canary Wharf respectively.

There is no doubt that car dealerships are here to stay. However, it will be the ones that continue to evolve, bringing technology, staff and online strengths together and creating a truly omni-channel automotive retail experience in order to meet the purchasing patterns of today’s customer, that will thrive.

Seismic changes can help secure retail’s future…

With so much happening, so quickly, in the world of retail we thought it was high time to delve deeper into the seismic changes affecting our industry, what they really mean for bricks and mortar retailers and how they can be leveraged to improve the future of retail, both for brands and customers. So, in October we held our first ‘Retail Indaba’, staged in Amsterdam, which met with a very positive response from some of the world’s leading retail brands.

Based on a Zulu word, literally describing a gathering for discussion, our ‘Indaba’ was designed to provide an opportunity for brand owners to put some tough questions to both rpa:group and its partners. To this end we selected an expert panel that included a retail psychologist, our own head of design James Breaks and a technology specialist, all under the watchfull eye of Matthew Valentine, the Editor of Retail Design World, who acted as Chairman.

Our overall aim for the Indaba was to stimulate discussion that could be taken back to boardrooms to inform strategies that would drive positive real life applications. It soon became clear that attendees were grappling with some big issues, ranging from ‘omnichannel’ to AI, and that for some these represented untold opportunities whilst for others they represented challenges that must be met head on. We were delighted not only with the willingness of attendees to share experiences and talk frankly about their business challenges, but also with the challenging questions this led to such as, ”How do we ACTUALLY make fundamental changes within big business?” I think we all agreed that change now typifies retail. In the last ten years the humble high street store, still the preferred destination for 85% of shoppers, has gone through more changes than in the past one hundred.

Now a union of online and bricks and mortar, the once simple store is now an immersive brand theatre, incorporating a glorious cocktail of showrooming, digital entertainment and ‘sharable’ experiences. To deal with this change however requires not just a new mind set from retailers but also a new skill set, one that goes far beyond the old transactional paradigm. There was a general feeling from attendees that the Indaba broke new ground for them and that working collaboratively with our expert panel provided the strategy and insight to help them come to terms with some of the tricky issues that can affect all aspects of their brand identity.

“Knowing the unknowns” has become a constituent part of 21st Century problem solving and our Indaba addressed plenty of unknowns presented by the audience. For many attendees, it signposted a way to investigate complex areas such as brand development, retail design and store function. Above all the event illustrated how a team of experts, all from different disciplines, can address retail challenges in real time, delivering insight and strategy into how brands can interface with their customers.

If you would like our help with your next project, please contact us on 01784 256 579 or send an email to s.cuff@therpagroup.com

What politicians could learn from retailers…

In sharp contrast, the fast-paced retail industry welcomes the competition that makes it focus on brand building and customer delivery. The old adage that customers vote with their feet is never far from mind, and every retailer knows their success depends on securing a ‘vote’ for their brand 365 days a year. If one compares the general management style of our politicians to the world of retail there are some interesting comparisons to be made. First of all, retailers are campaigning all the time. Their media and marketing machines, design, research and development departments and customer insight experts never stand down or drop their guard. They know that you are only as good as your last customer interaction.

By comparison, political parties market themselves every few years at local or general elections. Polls happen all the time of course, but they reach their apogee over a few weeks of electioneering. One could argue that the typical voter, is most receptive at those moments when they will either ‘buy’ one political brand or another. As a consequence politicians know their voters far less than retailers know their customers. As retail designers we make sure that customer insight lies at the bedrock of a retail brand’s existence. If you can’t deliver to consumers the products they want, in an environment where they want to shop, with a great customer experience, then you will fail. Brands have no mandate that will last them until the next election. Their values, their manifesto if you like, are based on an understanding of the desires and needs of customers.

I cannot think of an example in the retail industry where a CEO (Theresa May) and two managing directors (personal advisors) have conducted a strategy that ignores the company’s entire management team (the cabinet) and ultimately the company’s customer base (the electorate). Somebody pointed out that May had been too ‘presidential’ in her campaign and insufficiently ‘collegiate’. As all those who work in retail know, a ‘collegiate’ management style – working as a team, and putting the customer at the heart of all you do – is the template for success. We also saw social media, particularly Facebook, used by the Conservatives and Labour in very different ways. The Tories ran a campaign where hundreds of different messages could be delivered at a granular level, targeting people down to their postal code. Campaign content amounted to little more than blunt character assassination. On the other hand, Labour engaged with the battle weary electorate by using positive imagery and messaging.

Of course, the retail industry is no stranger to social media and spends millions on sophisticated personal profiling and targeting, but I cannot imagine a situation where one leading brand would run an ad telling you how bad a competitor’s products are. Sadly, in the UK we have almost arrived at a Hobson’s Choice and something is needed to sharpen and energise Westminster. Perhaps taking a closer look at the retail sector and how it engages with customers might improve the thinking of parties and what they deliver to all of us?

 

retailers need to be more “chameleon”

The answer appears to be no. Many retailers are embracing omni-channel in a token way. All too often the mindset is bricks and mortar + online + the brand, frequently the missing ingredient of ‘us’ the consumer. Retailers should act more like one of nature’s triumphs: the Chameleon. This fascinating animal is seamlessly and constantly responsive to its local environment and adapts to external factors in an incredibly agile way. It is one of nature’s most flexible and responsive creatures. Omni-channel requires a more flexible and Chameleon-like response to the consumer and the crucible for this interaction is the store space itself. The physical shop should be every bit as flexible as its digital counterpart and both should be mutually relevant to the consumer. Brands need to understand the relationship between physicaland digital experience better and allow themselves time to experiment, innovate and find what is right retailers need to be more “chameleon” In a world obsessed with separation it’s refreshing that retail at least supports an ecosystem fuelled by inclusivity and interaction.

I am of course referring to omni-channel. Here, borders cannot be closed, evolution cannot be halted and output should signpost the desires of future generations. But I have to ask, do retailers really understand how to fully exploit this dynamic ecosystem? within their own ecosystem so they can be flexible and responsive. Apple demonstrated this in 2001. The brand introduced collaborative side-by-side selling with passionate, knowledgeable staff who could respond to customers’ needs, demands and preferences. In essence the brand had created its own customer laboratory, a test bed where customer experience could be placed under the microscope. Since then we’ve seen most other retail sectors adopt the same key concepts. In a word, to be more Chameleon-like. But how many retailers have a store that allows for speedy reconfiguration in response to what shoppers actually want in that particular country, city or specific locality? Some have used a kit of parts approach whereby a new look store can ‘pop up’ through clever used of graphics and modular elements.

Foot Locker’s Sidestep brand, for example, is agile, collaborative, and happy to bury its ego. At the same time, it is able to reflect its core message, react with authenticity and evolve naturally within a unique brand ecosystem. Sidestep has created an engaging environment using storytelling, an ancient and universal form of immersion, as a base concept. The ‘style editor’ staff form an integral part of the experience by garnering feedback. This has allowed Foot Locker to experiment with content, adding and subtracting collateral and gaining feedback from the fiercely loyal customer base before committing to permanent stores. True brand immersion relies on authentic storytelling, skillful editing and the sharing of brand essence. It can be used both to reinforce the brand and to evolve it.

If you get the formula right it can be just as powerful in a Pop-up as a flagship. The only caveat is that the message has to be genuine. Some are getting it right and have understood the Chameleon concept totally, while others’ lack of adaptability and customer sensitivity makes them stick out like a sore thumb. Wherever you find yourself, the end goal should be to use your store as a learning environment, to reflect your customer’s thinking and desires and, most importantly, to be flexible and responsive with the knowledge you have gained. Being a Chameleon doesn’t mean losing sight of your brand truths. It means being able to reflect the thinking of your customers in the appearance and functionality of your store.

six retail design trends to look out for in 2017

Here we share what we believe to be the top retail trends that will dominate in 2017.

James Breaks, Associate Director (Design) – rpa:group.

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“Phygital” – blending the physical and digital worlds of retail

The real purpose of phygital design is to create meaningful transactions and here I mean not only the exchange of money but the exchange of information, a limitless transaction without boundaries of physical space and time limits. The presence of this transaction extends into home, work, leisure and all the spaces in-between. Smart Technology is the means of harnessing this endless transaction in our lives, through smartphones, tablets, PCs, TV’s, wearable and even kitchen appliances. By far, the most important part of this connected culture is the two-way nature of the modern Transaction. In exchange for ultra-personalised service, the consumer trades with their personal information. The retail ecosystem uses this to target future transactions and perpetuate the phygital relationship. How then do we harness the power of this Transaction in a Phygital Design? The answer requires a true understanding of the consumer, the shopper tribe frequenting your store and a willingness on behalf of the retailer to embrace change.

First, we must create an experience, not a website, not an environment. This experience needs to deliver three desired outcomes: immediacy, immersion and interaction. Immediacy and Interaction are relatively easy to provide. Immersion, on the other hand, can be delivered through retail theatre, creating incredible environment and amazing spaces. Truly effective, phygital brand immersion needs to be linked with emotion: a bond made at a sub-conscious level and therefore stronger than any consciously generated suggestion. Understanding and addressing all the senses at this level drives massive commercial potential and it’s the clever use of technology that enables it. An unforgettable retail experience is what we are aiming for here, as the visionary Seth Godin said, “If we’re going to shop, then, there’s an imperative to make it engaging, thrilling and worth the resources we put into it.” With a fresh outlook and the willingness to think outside of the retail box, we can create compelling phygital environments. We certainly have the right audience in the 21st century. The tech literate generations X, Y and Z are ready to engage with something new. We live in a world where customers have grown to expect as opposed to desire. Now shoppers simply expect 3D environments to ‘raise the bar’ of retail experience year on year. We are rapidly reaching the point where a lack of phygital innovation will seriously impact the bottom line of brands that can’t keep up. As ever it will be the innovators who set the pace of change and therefore of consumer expectations.

What constitutes excellence in customer experience is being re-defined by the shopper and often goes far beyond a friendly greeting and helpful service. However, I would sound a note of caution here. It’s easy to be led by what you think the consumer wants, or by fads and fashions. There is no substitute for knowing the shopper who buys your brand. Don’t take them on a journey they feel uncomfortable with and don’t disappoint them when they show interest in a destination you have never heard of! Ultimately, Phygital is flexible but you must always make it meaningful.

why are stores being redesigned more often?

This means individual elements have to be completely compatible with existing products, so that they can be used without difficulty and facilitate the renovation and remodelling of the store with as little time and effort as possible. Today’s stores no longer just have to stand up to comparisons with other retailers on location, but are also in a global competition thanks to the Internet. Merchandise and products are available anytime and anywhere thanks to modern mobile devices. Customers get updated with frequently changing content and have come to expect the same in a physical store environment. Flexibility and engaging retail design are by no means irrelevant; customers still want individual and pleasant shopping experiences. Even if many retailers are now also online, the store remains an important component in the marketing mix.

Through store design and store furnishings, central marketing messages can be directly communicated to customers. In addition, they are indispensable to create unique incentives to buy that differ from those on the Internet and from other competitors. Environment, product and customer service defines brand and forms the connection. More than ever, retailers today have to worry about which target audience they want to reach and which channel enables the best and most direct sales approach in certain cases. However, modern shop-fitting does not just cater to the customer, but also to the purchasing situation and the type of products.

In any case, digital presentation media and a comprehensively arranged, flexible shopfitting concept facilitate a perfect target audience adaptation of the store and enables for quick remodelling to support special sales campaigns. This flexibility is also more economical and allows for continuous engagement with customers because it can be evolved and also allows for bringing in local relevance to the environment. With a direct focus on the customer and their needs, retail design creates emotional buying incentives and effective need satisfaction, which online retail is not able to offer customers. After all, sales promoting emotions are still best created directly at the point of sale.

pop-up comes of age

The Telegraph revealed recently that almost a third of new businesses launched in the UK over the next two years will start life as a pop-up and reminded us that UK burger chain Meatliquor, now valued at £20m, started life in various car parks and vacant lots with just a van and a Twitter account. Like most successful brands, they happened to hit the zeitgeist but their success is not just inspiring a new generation of entrepreneurs, it is also putting some fire in the belly of more established brands who are also hoping to catch the wave.

The line between pop-ups and traditional retail has all but disappeared and yesterday’s transient and sassy retail concept has now become a central plank in the strategy of the biggest brand names. The benefits are obvious, pop-up stores, by their temporary nature, have a novelty value and are often seen as an edgy accompaniment to the main brand or as an attempt to ‘reach out’ to the customer. They also provide a good venue to break new ideas and products and remain flavour of the month with the press.
One established global brand that has used the concept to great effect is Foot Locker, which employed a pop-up strategy to evolve and define their Sidestep brand. Sidestep launched three pop-ups in Europe, made from a ‘kit of parts’ that could be re-jigged to suit customer preferences, a fine tuning strategy that allowed the store to act as a retail lab, in which design and presentation could be changed to suit customer behaviours and needs.

Foot Locker followed on from this activity by building the same flexibility into their new Runners Point stores across Europe. Pop-up is now a profitable vehicle for bringing innovative retail experiences to life, and the names we see popping up around us are getting bigger. With brands like Foot Locker, Marc Jacobs, Louis Vuitton and Nokia investing in the trend, we are perhaps only at the beginning of the pop-up revolution.

generation z – connecting with ‘Screenagers’ before its too late

And yet surprisingly, Gen Z is still seen as no more than a small blip on the radar for most high street brands, which seems crazy as they are the world’s fastest growing consumer group and currently make up 25% of the UK population. Gen Z has massive spending power, will soon represent 40% of consumers and by 2020 will make up 40% of the population in the world’s biggest markets, including the USA, Europe, China, India, Brazil and Russia.

How can retail connect with this important, marketing aware group that literally represents its future? Firstly, there are a few things that need to be understood and challenges that must be faced. Gen Z has been targeted by advertising from birth and has an aversion to being treated as just another another ‘sale’? JWT’s research stresses the point that any brand producing even a hint of self-interest or cynical behavior will be quickly found out, and for that reason we will have to design stores that not only fulfill their desires, but also meet their expectations. Retail destinations will not only have to provide ‘theatre’ but also a welcoming and honest interaction with the brand. Above all, we must remember that Gen Z wants to enjoy the retail stage but isn’t in the market for huge amounts of brand ‘fiction’ or storytelling. Obviously, retail needs to get on the wavelength of this age group right now and evolve stores accordingly.

Perhaps it’s a matter of evolution rather than revolution? For example, we should possibly be seeing the tired old free phone charging point and low end computer for customer use, currently tucked away at the back of the store, become genuine ‘Dialogue points’, where conversations with the brand can be initiated Maybe, shops should have chill zones where Gen Z can sign in with a thumb-print, the ultimate unique identity badge, to get personalized bargains and enjoy the kudos of being part of a brand fraternity.

Gen Z’ers would be happy to work with designers on what tomorrow’s stores should look like, they are natural ‘collaborators’ and ‘doers’, so why not enlist their help? Retailers should be exploiting that collaborative characteristic right now, so they can build shops that Gen Z will truly value.

How to reach customers not interested in in-store technology

Do we really understand who uses technology and how they want it to operate within a retail environment? Does everybody want their store to have the latest gadgets? Having taken an initial ‘giant leap’ for customer-kind, many stores have become a committed part of the technology vanguard, pioneering in-store solutions that have the ring of science fiction about them: iris recognition, smart changing rooms, near field communications and clothing that can read your moods. They have seen the ultimate promise of ‘big data’ and are working on how to personalise their stores in order to get to know their customers better than anybody had ever dreamed possible.

All this is exciting territory, however, despite the overall trend, it’s inevitable that a significant number of customers will feel disgruntled and even at odds with a brand to which they have previously been loyal. This group will be quite diverse in attitudes: some will not want to fully embrace IT in their own homes and daily lives, let alone want to experience it in-store. Others may actively enjoy technology but be turned off by it in certain situations or environments. Retailers have to think carefully about how to respond to this situation – after all some ‘techno-phobics’ may be their best customers. For a retailer, it’s now all about understanding ‘tribes’ that make up their customer base. Tribes are not brought together by age, gender or geography or even income, but by being like-minded.

We have identified over the past year or so a number of key tribes to assist our clients: the ‘style-conscious tribe’, the ‘value tribe’, the ‘urban chic’, the ‘collaborators’, the ‘iconoclasts’ and many others. Within any tribe there will be sub-tribes and there will also be members of the tribe that cross over between their tribe and another. For example, research has revealed that 63% of shoppers welcome a mobile app personalised to navigate stores and 43% find in-store location deals (where their location is tracked in order to trigger personalised promotions whilst shopping) positively “cool”. Some are delighted to have intelligent fitting rooms that ‘talk’ to them but would be horrified by the prospect of a salesperson greeting them by name when entering a store, after receiving a signal from the consumer’s mobile phone.
In fact, an overwhelming 73% found the thought of that service ‘creepy’ when asked. In addition, 68% of UK shoppers find facial recognition unnerving.

In the light of findings retailers need to identify the tribes in their customer base and create the ultimate retail environment for them, based on an understanding of their motivations, IT habits and general psychology. That is just as important as being up to speed with the latest techno inventions.

impulse purchasing – creating the right store environment for impulse buyers

First and foremost, you need to define the values that make your brand relevant to your customers and differentiate it from competitors. Then it’s about developing an interior concept that communicates those values, attracting customers and enticing them to spend more in-store, via both planned and impulse purchases. To achieve this the store must become a seductive, compelling environment that tells the “brand story”. Getting the right interior look is critical and interior architecture has got to be exactly on brand.

Creating a unique ‘signature’ environment is often about creating an aspirational environment, a sense of belonging.Tommy Hilfiger for example recently converted a listed building in Berlin, which the design team loaded with beautiful antique light fixtures, interesting pieces of furniture, beautiful rugs and comfortable leather sofas and armchairs. These make some parts of the store feel like a very chic home, one that you are excited and privileged to be in. In fact, the store is so beautiful that you ache to take a part of it home with you, and of course you can, because the gorgeous clothes hanging on the rails are for sale! Also, make sure that your store has “speed bumps”: merchandise displays that work much the same way as speed bumps in parking lots: they slow customers down.

One of the best ‘speed bumps’ is the changing room area. If the customer has made it this far, they intend to make a purchase and one might assume that all spontaneity has now been used up. However, this is vital impulse territory. For example, ‘smart’ changing rooms, that suggest items to go along with the one selected by the customer, frequently unlock our impulsive side, bringing what retail anthropologist Rich Kizer calls “merchandise outposts” back into the customer journey. Although, they may have passed the handbags five minutes earlier with no interest at all, having a compatible handbag suggested at this point can often promote the “I need that!” response, which goes on to secure a sale. If you own a retail store you will undoubtedly understand the simple idea that if customers spend more time in your store, they are more likely to spend more money.

US company, Path Intelligence, recently published a report that shows that extending a customer’s visit by 1%, will see a 1.3% increase in sales. Basically, the longer they stay in store the more unplanned or spontaneous their purchases become. So, get the look right, bear in mind dwell time, make people feel happy, indulged and relaxed. You have now set the scene to encourage very profitable impulse behaviour!

Why omnichannel retail needs real places for real people

A good idea, but perhaps nothing new. The first 1960s boutiques in Carnaby Street or trendy hot spots on The Kings Road had stores with a loyal and local following, as well as being trendsetters on a national scale. Retailing history can offer numerous examples of stores acting as social hubs, including the famous bookshop Shakespeare & Co in Paris, home to expatriates like Ernest Hemingway, Scott Fitzgerald and Pablo Picasso – all Parisians at the time.

With such illustrious antecedents, the NBHD concept has been a huge success and from Berlin to Beijing, customers have talked positively about feeling closer to the brand. It’s a nice antidote to the impersonal ‘one size fits all’ stores that have grown up with the desire or need to globalise. Retailers that embrace their locality, realise there must be a genuine and convincing fusion of retail and dedicated community space within their stores, even if this means extended opening hours or new patterns of retailing.

The philosophy of locality retailing demands that the retail environment reflect where it is, by creating an authentic sense of geographic place.  Adidas has achieved this in spades through its store design, and the new Starbucks concept has done the same. Both realise that the necessary changes can be brought about through materials, colour palette, furniture and fixtures.  But alongside a standout retail design, there also needs to be a virtual community, offering the chance to create and be part of a tribe with its own turf and personality. Savvier retailers are already taking giant strides by making individual store managers responsible for product mix to suit the demands of a particular locale and some are even making them responsible for internet and PR in their locality. It all comes down to making omnichannel work in a seamless way. If this can be done, then a truly exceptional customer experience can be delivered that acts locally but thinks nationally, or even globally. The digital environment should be as tonally and conceptually close to the physical store experience as possible. A great website and physical store should allow you to discuss, learn and make a choice effortlessly from a whole experience.

These are exciting times for retail. By embracing the available technology, high street brands will be able to take the very best from the biggest changes to commerce and society since the Industrial Revolution.  Already an elite group of early adopters realises that the future of stores is real places for real people – let’s hope the rest catch on soon.

if you’re not paying for the product, you are the product

Personalisation is now widely regarded as a way for “bricks” retailers to offer customers a seamless experience between the digital and physical worlds. However, brands need to be aware that we need to feel comfortable with how things are marketed to us.

Recent research illustrates that British shoppers are embracing technology: 14% of us would use cameras in fitting rooms to share with friends via apps or social media, 22% are interested in on screen offers in fitting rooms and 40% of us want to check if a products is available in-store via an app. But all of these things are baby steps and as easy for the average shopper to accept, as contactless payments or click and collect.

The really big stuff is just around the corner with brands planning to get ‘closer’ to us through improved personalisation. Some developments currently being mooted have the ring of science fiction about them, for example fashion and accessories that can ‘read’ emotions as we journey around a store, enabling the shop to suggest purchases or activities in line with our moods. Perhaps a calming massage on the fifth floor or a hot beverage in the basement?

This makes me question whether the store is coming too far into our personal space. Is it all a bit creepy? After all, what we all want, is to feel that our relationship with a brand is on tap – a conversation that we can start if we want to and more importantly switch off when we feel like being alone.

Accenture’s Technology Lab has a word for the creepiness that many of us feel, it’s ‘hyper-personalisation’, a devastatingly accurate data cocktail leading to a level of consumer understanding that would shock most of us. It seems as if personalisation is about to cross a marketing Rubicon into territory where progress is not answering consumer demand but is progress for its own sake. Maybe it’s time to let the consumer catch up?

 

retail revolution won’t be all click and no brick

Whoa! Hold on there, I hear you cry. What about all the savvy retail brands that are building omni-channel models, enabling their bricks and mortar offering to work symbiotically with their online activities? Well, I have bad news from Tim who thinks that omni-channel is no more than a term traditional retailers use to delude themselves that bricks and mortar retail spaces still have a role to play in the online paradigm of tomorrow. Is he right?  Well, before the palpitations get too bad let me put your mind at rest. The simple answer is, No! In fact, his point of view couldn’t be further from the truth and this is being evidenced by a number of successful retailers, one of whom I will talk about in a moment.

Whilst he is correct that the Internet is forcing the traditional retailer to adapt and some are experiencing pain on the way, he misses the all important point that as part of their adaptation to a rapidly changing retail landscape, many of the savvier retailers are now delivering an omni-channel experience to their customers and  reaping considerable rewards. They have a unique advantage that pure play internet brands like Ocado do not have, and that is true brand engagement with their customers, in other words an emotional connection. An internet purchase without social interaction and the very tactile nature of a retail environment will always be largely driven by price, a decision made without emotion.

For the more traditional retailers who have not yet grasped the omni-channel nettle, let me demystify it for you. Basically, it’s a seamless approach to the customer experience through all available shopping channels, where all the channels form part of a holistic customer journey.

Successful exponents of omni-channel include the John Lewis Partnership with its £1 billion Internet sales. JLP is a huge omni-channel success story and the company’s commitment to the concept is underlined by its recent appointment of Mark Lewis the ex MD of eBay. Mark was once a pure-play internet marketeer like Tim Steiner, but there the similarity ends. Unlike Tim, he sees stores as vital to the future success of retail brands, particularly at JLP where a new trading model has been rolled out, which links ‘bricks’ with ‘clicks’ in a seamless way that benefits both. Their recently launched Exeter store for example, successfully integrates terminals into a ‘showrooming’ approach to their retail offer. The figures speak for themselves, John Lewis’ internet sales increase locally by up to 30% following the opening of a new format store. And, in an inspiring piece of management wisdom, the company has also made the raising of internet sales figures part of the remit of regional store managers, who are then responsible for both stores and internet sales levels in their geographic area. The ‘cherry on top’ is added with another little known fact, a very high percentage of those customers collecting  internet orders in-store also buy something when they collect their order!

So, whilst forming part of a holistic customer journey, the retail store has two other benefits up its sleeve that an Internet counterpart cannot offer; emotional experiences and true customer satisfaction driven by personal interaction and staff. Whether internet brands like Amazon, Ocado and eBay like it or not, we Brits still list ‘going shopping’ as one of our most favourite leisure activities.  It’s both a social and emotional pursuit. As designers, we can support the retailer in terms of the emotional experience, creating interiors that both entertain and inspire, but the customer satisfaction is down to the retailer and the quality and knowledge of their staff, again please refer to John Lewis, a very hard act to follow in this regard.

So, my message is one of hope for traditional retailers that create a truly omni-channel offer where the retail spaces emotionally engage and where customer service excels will not only survive but thrive. Old fashioned retail is dying out, long live omni-channel!

showdown… or showroom…

A recent article by market observer TNS claims that mobiles can be used to tame the risk of showrooming by boosting brand interaction with consumers and converting them from browsers into customers. Of the 38,000 people surveyed across 43 countries, 33% had visited a store to try out products without buying them, with 21% using their mobile devices to showroom. This represents a huge opportunity for brands to approach consumers in a buying environment, as these activities say loud and clear that they are ready to interact with brands whilst in a store.

A staggering 20% of mobile users participating in the poll said that they were willing to receive mobile coupons during their shopping trip and 13% would be interested to use the services of a ‘virtual sales assistant’, which could provide additional information about items. Rather than being the IT devil incarnate, showroomers generally just want to find out more about the price of a product and its suitability and they successfully achieve this by reading reviews in social media, from friends and family and sales staff. This suggests that brands need to adopt a more integrated approach that allows for reaching consumers and meeting their needs at all touch points.

Matthew Froggatt, Chief Development Officer at TNS, rounds it all up quite nicely when he says, “Rather than seeing mobile as a threat to in-store sales, brands and retailers must embrace it as the most immediate and personalised way to engage shoppers to ensure that they don’t leave empty-handed.”

Another interesting piece of research, this time from retail training company Beyond The Box, makes another point that can easily be tackled by retailers. It claims that consumers showroom not just to save money, but because staff are unhelpful and ill-informed. The majority of those surveyed felt that retail staff, were failing to ‘connect’ with them or their needs, and that staff failed to ‘explain products and services’ to them. If this is true, there is one major dynamic being overlooked by retailers, today’s customers want information, lots of it, they are price savvy and, both online and in-store, they are looking for exceptional service. Sadly, the research shows that if customers are unable to find an empathetic and informed retail professional to talk with, there is a very good chance they’ll take their business online.

To sum up, UK retailers need to culture showrooming, encourage it, embrace it, and if they do they will benefit, honest. Make friends with the mobile, encourage people to use your store in a more high tech way, and make sure your staff deliver the experience that today’s consumers are looking for.

britishness…

For millions across the globe ‘Britishness’ is a significant part of the authenticity of the brand they choose to buy.  It can mean everything from the heritage and cut of a Savile Row suit, to the embossed Connelly leather of an Aston Martin. Fundamentally, ‘Britishness’ has become an iconic, hard to define quality, and those brands that embody it, and succeed in turning it to their best advantage, truly stand out in the international marketplace.

We asked a straw poll of consumers what exactly ‘Britishness’ meant to them. Many said that it meant craft and quality; a sense of understated sophistication. Others expressed the fact that it is traditional, yet modern. A surprising number highlighted practicality, something well made that can be depended upon, and others said it was a creative ‘spark’ that made something unique. Asked to define the quality of ‘Britishness’ through their own choice of products, manufacturers or designers, responses ranged from The Mini, to the Rolls Royce, from Burberry raincoats to Alexander McQueen’s skull prints, and from Stella McCartney’s fashion brand to Oliver Sweeney’s funky yet traditional shoes.

All have managed to infuse their brands with a ‘Britishness’ requiring not only marketing expertise, but a ‘brand story’ that is rich in association. For Aston Martin it is the 50 year link to James Bond, whilst for Savile Row it is the sartorial image of English gentlemen ranging from Prime Ministers to Princes. Whether the brand story is rooted in nostalgia or a unique vision of the future, if it is authentic and can amplify the right elements it will succeed; but only if it’s delivered in the right way. This type of storytelling is how brands need to connect with the hearts and minds of today’s consumer.

an end to clicks and bricks

Oh yes! We all know about the casualties of online versus online, the brands like Borders who fell foul of Amazon’s ability to trade out of football pitch sized sheds and cut costs across the board, but some products will never totally ‘fly’ in the purely online world.

Take clothes for example and shoes, people prefer to try something on in a shop, to know if those shoes are going to pinch without the hassle of having to return them if things don’t work out. Currently, 25-40% of all clothes bought over the internet are returned. Many shoppers order multiple sizes with a view to returning say 2 out of 3 items. It’s treating your living room like the old fashioned changing room in a store, with the added hassle of posting the stuff that is unwanted back to the supplier.

Some traders offer free returns, whilst others pass the cost on to the buyer. Whichever way, it’s a cost and hassle for retailer or consumer. The same applies to childrens’ clothes and accessories. If there’s a choice of being able to eyeball something, feel the quality, assess the safety, then parents will take it. This is probably why Kiddicare has taken over 10 ‘superstores’ from Best Buy (a victim of the clicks bricks struggle, a kettle is a kettle right? Do we need to touch it before we buy it?).

Kiddicare’s reason for leaving the sanctuary of the net for the choppy waters of the high street? To offer customers “A true multichannel experience” claims the retailer. In other words letting their customers shop with smartphones, tablets, laptops and even in stores as if waited upon by a single salesman, with an unfailing memory and uncanny intuition about their preferences.

Owned by Morrisons, Kiddicare is not the only retailer to take this step. Screwfix, the Mecca of plumbers and electricians, has opened no less than 270 shops since 2005. They realised that customers wanted both on and offline service when they spotted tradesmen sitting in the car park of their first store ordering online and then dashing in-store to pick up their purchases! Apparently, the queue for online orders was shorter than the other one! There’s an old maxim in retail, “Want to know know to do the right the thing? Ask the customer,” and in this instance they screamed “MULTICHANNEL.”

Even the mighty Amazon has cracked (just a little bit) under the pressure and is tip-toeing into the real world by installing lockers in shopping malls where customers can pick up deliveries. They also have a partner program where customers can return unwanted items to local shops across the UK, where they will be picked up by Amazon couriers, first steps towards bricks-and-mortardom? Let’s wait and see.

Matt Truman of True Capital, a fund that invests in consumer companies believes that all this suggests that online and traditional retailers are eventually “migrating to a middle ground.” Certainly John Lewis, which posts very healthy profits in a recessionary market has pioneered a hybrid trading paradigm that works for both company and customers. JLP claims that on and offline shopping spur each other on and that when a new shop opens, online sales in the vicinity jump by 20-40% “overnight”. Plus, nearly a third of all people who order online prefer to pick up their purchases in store and apparently 40% of those make an extra purchase when they pop in. The secret to online/offline trading? You do the maths!

The question for envious e-tailers is how to pluck the benefits of physical stores without incurring the costs. Most proceed gingerly, armed with high-tech weaponry. “Pop-up shops” generate buzz and then vanish. Ebay has tried them, and Winser London, a fashion website, plans to. Amazon’s ghostly high-street presence helps make delivery cheaper and more convenient, but so far it offers nothing more. Kiddicare plans 15 stores at most in Britain, a fraction of the number operated by its struggling competitor, Mothercare. They will be nimbler than traditional stores. Prices will appear on electronic labels and change with the push of a button.

Bricks-and-mortar merchants are likewise paring space and bulking up on technology. In Britain the number of outlets a retail chain needs to have national coverage has dropped from 200 in the pre-online era to 50-80, says Adrian D’Enrico of AXA Real Estate, an investment manager. House of Fraser is experimenting with shops that are little more than a changing room and rows of screens to order clothes. Hointer, a Seattle start-up, provides just enough space to display a sample of each type of jeans it sells; robots fetch the right size from the stockroom. On today’s high street, shopkeepers who stand still are unlikely to survive.

…the future of retail

Apparently women in their 30’s are most likely to rage at the unsatisfactory space allocated for trying on clothes (72%). The study, commissioned by isme, found that fully 75% of women are so fed-up with cramped, cluttered and exposed fitting rooms that they’ve stopped trying clothes on altogether, and 60% of women admit to angrily leaving garments on the nearest rail rather than endure changing cubicle. This is surprising given that according to separate research, 71% of those who try clothes on buy (according to London consultancy Envision Retail), as opposed to just 10% of those who do not try the clothes on in store. And retailers widely acknowledge the importance of the changing room experience. Therefore, stores need to really step up their game in respect of dressing rooms, because that is where the emotion happens with a product. A display can make you fall in love with something, but when a shopper can try it on, in a beautifully furnished and well lit space, then they fall in love with the item on themselves.

Stores need to be designed in a way that features the changing room as the focus of the experience – and added value services are being provided to shoppers as they make their way through their purchase paths. Yet when asked about their emotional state upon visiting a high street changing room, 58% of women expressed feeling disappointed in, and 48% feeling frustrated with, their experience. The major changing room gripes highlighted include curtains that don’t shut properly (55%), long queues (41%), no hooks to hang own clothes on (41%) and not enough space (40%). Other top ten gripes include ‘poor lighting’. But this is a good example of how a seemingly simple expectation by customers may not be all that it seems… While studies have examined lighting on the sales floor, there is very little data on the effects it has on shoppers in dressing rooms.

A recent study by Baumstarck, of female shoppers aged 18 to 35 who tried on clothes, showed a clear preference for frontal lights (those installed along the sides of the mirror) to overhead lights, which were ceiling mounted. Women complained that overhead lighting created shadows on their face and made them look unattractive. To avoid these unwanted shadows, shoppers had to step back from the mirror. Overhead lighting also makes a room seem smaller, creating a ‘claustrophobic’ experience. With frontal lighting, dressing rooms appear bigger and shoppers are willing to stay longer and even try on more clothes. Adult behaviour psychologist, Susan Quilliam says: “Beautiful clothes will always make a woman feel more beautiful and therefore more positive about her appearance, and more optimistic in general. We often use shopping to offset disappointments in other parts of life, or to balance out the negative emotions we feel about ourselves and others.

But if the shopping experience itself is negative, the whole event can be utterly destructive. Instead of boosting our self-esteem, it saps it; instead of making us feel good about ourselves and our lives, it brings up frustration, irritation and anger.” At a time when retailers are looking to every part of their businesses to improve performance, there is no substitute for good design based upon research. The use of space, lighting and brand identity within the changing areas have to make it easy for the consumer to buy into the brand ethos as much as the clothes themselves. The whole experience has to be appropriate for the shopper and their expectations of the brand. Outside of the changing rooms, the lobby needs to be inviting and designed to facilitate an attentive interaction between staff and customers. And in the era of multi-channel retailing, interactive technologies such as the magic mirror, virtual closet and other interactive dressing room technologies need to be appropriately integrated into the shopping and brand experience. In changing rooms and adjacent areas the application of expert design and input will, it seems, inevitably reward retailers with higher sales and happier customers.

a luxury retail bric in the wall

Part of the fall-out of such rapid economic growth is that the established rich and emerging BRIC middle classes are now enjoying their wealth through buying into Western luxury. According to Euromonitor the BRIC economies accounted for 11% of all global luxury sales by value last year, and will achieve 16% by 2017. China, by far the star of this trend and the big prize in the luxury goods market, has seen its consumption triple over the last five years. Forecasters say that by 2017 China will double in value again, overtaking Western Europe and Japan and establishing itself as the second biggest luxury market in the world after the US.

The country is the Holy Grail for luxury retailers, with innumerable Western store launches, not just in the major cities, but also in second and third tier markets too. Some names dominate: the forty year old Mulberry brand has a Beijing flagship and plans thirty more stores for the region, Dunhill which opened its first store in Shanghai twenty years ago now has one hundred stores and Burberry has fifty five stores across the country and nine in Beijing alone. But, will the High Street brands be able to replicate the success of their designer and luxury counterparts? Many American and European clothing brands have ambitious plans for China and others are entering the market for the first time this year. They are competing in an apparel market that was worth £150bn last year and if they get it right there are undoubtedly profits to be made.

Inditex, owners of Spanish fast fashion brand Zara, definitely lead the pack with 350 stores across mainland China. Sweden’s H&M opened 32 outlets last year and now has 78 stores in China. Analysts believe the brand will treble its store numbers over the next 3 years. Meanwhile, Gap aims to have 45 stores by the end of 2013. Others have so far embraced expansion on a more modest scale. M&S opened its first store in Shanghai in 2008 and now plans to increase numbers to 18 across the country. Top Shop has been even more tentative, making do with a pop-up store during last year’s Beijing Design Week, albeit a move that could herald a more permanent foothold. Hollister, a sub brand of Abercrombie & Fitch, is also eyeing up the Chinese mainland and Forever 21 has flagships in both Beijing and Shanghai. John Lewis Partnership is also exploring shops in China, a move which would mark its first foray outside the UK.

Closer to home, western retailers have not been slow to grasp the opportunity presented by Russia’s fast growing economy. There is also very good news for challenger European and American brands, as pointed out by Per Kaufman, chief executive of Russian operations for Ikea, who says, “It is a bit like the Wild West a hundred years ago. There is such demand and dynamism in the market that you can succeed even if you’re not the top retailer.”

Our own involvement in Russia with Nokia’s Vertu brand and Tommy Hilfiger shows that upmarket stores in Moscow and St Petersburg are already no different from those of any other major capital. Russian consumers, like their Chinese counterparts, see Western brands as a means of self definition. With the average Russian income having increased sixteen fold in the past 12 years it’s no longer only those on the biggest salaries that can wear foreign clothes and use foreign cosmetics, even though it may still be the preserve of the rich to drive one of the 15,000 Jaguars and Landrovers that will be sold in Russia this year, or to own an i-pad. Again, like China, brands such as Zara have responded to the increasing middle class desire for western fashion with aggressive growth plans. The company has a plan to open 50 new shops a year, and names like Hamleys and Debenhams are rushing to join early entrants like M&S.

It will be interesting to see what other developments take place in the two most dynamic BRIC markets over the course of the next 12 months. But, one key thing is evident right now, western retail expertise will be in high demand alongside the influx of western products. rpa:group for example have been working with a major Russian retailer on their corporate identity and the retail concept design of one hundred plus stores. And the message is clear, Russians like the reassurance of western design, even if the goods they are buying are Russian.

adapt or become obsolete…

British Land has made a statement recently, to coincide with the announcement of its yearly results, that acknowledges that retailers, and therefore landlords, must adapt to the rise of digital shopping or become obsolete.

The company owns and manages over £16.4 billion of UK properties making it one of the largest listed managers of property in Europe with a portfolio focused primarily on high quality UK retail locations. It sees that stores will remain central to UK retail in a world increasingly dominated by online shopping, but warns that physical and digital shopping must be integrated, with stores becoming showrooms, as well as pick-up and return points.

Reporting a fall in full-year profits, British Land said its UK retail business had been hit by the “twin challenges” of lower consumer spending and the growth of online sales and that it was now key for both retailers and landlords  to adapt to the changing way that people shop: rational (purpose-led) and emotional (experience-led). We all know that the internet lies at the heart of these changes, not only because of the immediacy of being able to buy online, but also because of the way it enables consumers to compare prices and quality, share their opinions and shape the development of new products and services. The line between online and physical sales is getting increasingly blurred with the majority of sales more likely to have some sort of digital aspect.

From now on British Land will be expanding its digital platform and exploiting technological innovations for the benefit of both retailer tenants and consumers. The company cites a recently-struck long-term partnership with BT to introduce free Wi-Fi to all its shopping centres and extend Wi-Fi across retail parks as a first step. It’s good to see that enlightened landlords are coming to accept that it is vitally important to have the right assets, the right approach and an ability to adapt to a fast-changing retail environment and all the challenges that it brings.

all change at apple

After all, every so often, a company changes our lives, not just with its products, but with its ethos and there’s no doubt that Apple is very much the poster child of the marketing community right now. It’s worth taking a moment to consider the revolution that the brand has brought about in customer service and store design. After all, brands like this change our behaviour: how we buy, how we communicate with each other, even whether we speak with each other. Currently the biggest brand in the world, Apple has reinvented stores and created a genuinely new experience for shoppers, attracting more than a billion shoppers since the stores launched in 2001 and driving US profits of $3million per store, per quarter. Apple’s stores are designed in a very specific way, featuring large, “kitchen style” tables, which allow customers to trial as many products as they like and get to know how they work. So successful has the design been that it has been copied (illegally) in China with fake Apple stores and also adapted by Samsung in Canada.

Store employees are trained to be experts in the products, meaning that no question is too big or too small. Apple also employs roving sellers who allow customers to pay through their iTunes account on an iPad, anywhere in the store. This removes the potential for large queues and makes the overall experience more personal. In addition, it is another opportunity to showcase what the technology can do. Now Apple is hiring Angela Ahrendts, who was until today the CEO of Burberry. She is a ground-breaking thinker, having overseen a very successful revolution of the Burberry brand.  At Apple she will lead the retail and online stores effort and be responsible for the strategic direction, expansion and operations, which will further enrich the consumer experience on and offline. So are we to expect a revolution at Apple?

Angela is the second fashion CEO Apple has poached in a matter of months. Paul Deneve, former CEO and President of Yves-Saint Laurent, was hired back in July. At the time, there was much speculation as to why Deneve, who led YSL’s retail expansion, was not joining to spearhead Apple’s retail efforts, but rather as a vice president in charge of “special projects.” Apple followed up Deneve with the August hire of Enrique Atienza, a senior vice president at Levi’s, who now leads Apple’s US retail efforts. Apple says it is thrilled that they have the ex-Burberry boss on board as she shares their passion for innovation and customer experience. It will be interesting to see what ideas the ex-fashion industry ‘big guns’ will graft onto the Apple tree.

Clearly there is a very clear agenda for how Apple conducts its business, so much so that books have even been written about ‘The Apple Way’.  Maybe we are to see an expansion of the brand into related areas? Fashion? Accessories? With a brand this strong it could almost be all things to all men, thanks to the commonly held belief that what underpins most purchases are the twin concepts of trust and respect for a brand – Apple of course has these by the shedload. So, with huge monetary success and an almost evangelistic customer base, where will the triumvirate lead the brand? We predict product range extensions and a morphing of the physical Apple store into something hugely exciting and truly unique. Let’s wait and see…..

Big Data or Big Brother?

Maybe too many retail brands are so heavily focussed on the sophisticated techniques which can slice and dice data, that they are beginning to overlook the ‘softer’ skill of understanding the customer? An American professor was explaining on the TV just this week how a mobile phone switched on in somebody’s pocket or handbag, can gather endless data on consumer behaviour patterns in a cityscape. How and when consumers travel, where and what they eat and drink, where and for how long they congregate – there was no end to the information. The spy-like invasion of consumers’ everyday life is compelling, but what happens when this intelligence is put into a retail marketing strategy?

It is easy to assume that once the complex task of analysis has been completed, all that remains is to attach a logical marketing communication and your work is done.

For instance, mobile-watching might reveal the group that walk the least and spend the most time in fast-food outlets and would therefore be high risk for obesity and diabetes. It would make sense to target them with ads for diet foods according to the data.

But data is ultimately meaningless if not informed by insight into the customer. No one likes to think they are being tracked down by the data’s Big Game Hunters and if you happen to be overweight, with a weakness for a Big Mac and fries, you are probably going to be insulted by finding diet food ads dropping through your letterbox or popping up on your computer screen. “Why me?” you might think, “Are they trying to suggest I’m too fat?” Equally, if you are over 50, it makes for a depressing self image to be bombarded with offers of life insurance, care homes, and incontinency products! You may be overweight and you may be getting on a bit, but you don’t need to reminded of it every time you log on to Facebook!

Mary Portas, the British retail guru made a comment this week on national radio that shops are frequented by people. That may sound a bit daft, but think a moment. Regard your customers as people and treat them with respect and you can’t go too far wrong. Regard them merely as ‘targets’ and see them only as a possible quick sale and you run the risk of alienating them forever.

Big Data is all well and good, but be careful about the insights you take from it and the actions that arise from these insights. Quantitative data is a useful tool, but at the end of the day advertising is about real people connecting with real people in a meaningful way.

Advertise to people with too much surgical precision and you may risk causing them annoyance and these days, when customer reaction is quick and far reaching, you may run the risk of unleashing the darker side of the social media genii. Personally, I have always believed the old adage that a happy customer tells three people whereas an unhappy customer tells ten, and now, in the age of social media, the ten carries on to be hundreds if not thousands.

So, don’t hunt your customers down and get too much into their personal space. Don’t make them feel that a Retail Big Brother is always watching them and has cynically sliced and diced their habits to reveal every strand of their shopping DNA. Be polite, be friendly and respectful, and consign the pushy and too familiar side of marketing to the wastebasket.

a load of old crystal balls?

Apparently, Argos shoppers are in for an in store treat soon when they will be offered the chance to shop via an interactive crystal glass ball.

The retailer claims that the ball will measure body temperature and moisture to assess stress levels and then using unique ‘destiny’ algorithms it will read the customer’s mind! Once the crystal ball has calculated what product the customer desires it sends an order to staff in the stockroom who will prepare the product. The plans follow Amazon’s move, revealed in January, to send packages to customers before they have ordered them using predictive demand analytics! The technology has been developed in its Future Purchasing Lightbulb Eureka lab, located in a converted warehouse off the Silicon Roundabout in Shoreditch.

Argos chief digital fortune teller and innovative innovator of technological solutions April Day said: “It’s going to transform the way retailers react to customer needs, customers won’t want to waste energy making up their minds on what type of ear phones or food processor they buy next, they can just use the crystal ball to tell them what they need.” Argos plans to trial the technology in a handful of stores before rolling it out. Spoof or not one thing in this story sounds really good – the Eureka Lab – more companies should have one!

brand new friend?

More than half of the respondents said they would be “devastated” if their favorite brand went away. Not just annoyed or disappointed, but actually devastated. It’s interesting to think about what a brand is doing to develop such a deep and meaningful relationship with its consumer. Results like these are obviously nectar to the brands that would be sorely missed, but for every cherished brand there is a host of others that would love to be our best friend, but just don’t know how to go about it.

Currently, the retail world is undergoing a fundamental transformation: consumers are hyper-connected, expectations are sky-high, marketing fatigue is just another pop up ad away. The connected consumer can be fickle, treats your store like a showroom, and, thanks to social media, pays more attention to a friend’s experiences than to your promotional gambits. It’s no surprise then that traditional business models are rapidly becoming extinct, and that the relationship between retailers and consumers is shifting dramatically not day by day, but minute by minute. So, how can retailers understand, let alone keep up with this pace? Simple, they are turning to experts in other fields to help them out. One thing that is being considered is Neurological Connectivity – creating an addictive, irresistible shopping experience, from pre-shopping anticipation to consumption. Experts have determined that a brand or store has a neurological connection with customers if they approach the store visit as they would a visit to the home of a good friend. The trip requires almost no perceivable effort, because they know it is going to be a fun and enjoyable experience.

Basically, using research in this way is all part of the Holy Grail of attracting and keeping customers and increasing brand loyalty. As the emotional connection stakes are raised I predict there will be even more talk in 2014 of retail brands as ‘friends’.

ASDA pull 3D bunny out of the retail hat!

Whilst it’s all well and good running a yoga studio, offering people the chance to have a cuppa and a pizza, have their blood pressure taken or book some winter sun; these are all a bit run of the mill when it comes to real customer attraction. What get’s people excited are the virtual changing rooms, the cat walk events, and of course the 3D printing! No it’s not a misprint…..ASDA has just pulled the bunny out of the in store entertainment hat and is trialling a 3D printing service in York, its biggest store. Customers can pop into a booth, have a 360 profile made of themselves, do their weekly shop and pop back later to collect their perfect 3D mini me – all for the princely sum of 40 quid.

Judging by feedback on the ASDA web site, customers are desperate for the service to roll-out into a store near them  and ASDA is hinting that they intend the service to be nationwide. It would certainly save a lot of people a lot of money on petrol, as my kids are already pestering me to jump into the car and drive to York…250 miles away! Apparently anything can be scanned – including people, pets and even cars – and the models can be produced in full-colour, white or a bronze-style coating. The technology produces highly realistic ‘mini me’ figurines at whatever scale you like, but most people opt for the 8 inch version!

Asda has been working with parent Walmart for the past 18 months to make 3D printing possible for UK shoppers. To build the digital model, the whole surface area of the subject is scanned with special cameras in two minutes. The shape is then recreated in 3D by spraying ceramic fluid in thin layers to build a solid object. Mark Ibbotson, retail director at Asda said: “We are thrilled to be the first supermarket and best value retailer to offer this new shopping experience in the UK. Our customers are always looking for the next big innovation and 3D printing is a guaranteed talking point amongst friends and family this season. With limitless printing options available, we’re very excited to see how our customers will take advantage of this groundbreaking piece of technology.”

airport retail is ready for take-off…

There’s no doubt that we are seeing a massive expansion of the non-aviation side of the increasingly profitable airport business. Airports such as Heathrow, where there are 5 applicants for every retail space, have become the most sought-after retail locations in the world.

However, the experience of our interior architects and designers has shown that retailers are often challenged with the ‘square peg in a round hole’ scenario. Whereas shopping centres are bespoke, airport terminals can throw up awkward spaces, which need to be carefully designed to allow retailers to express their individual character and brand values. Airports like Gatwick are redeveloping space to optimise their retail offering and at the same time elevating expectations of what retailers need to achieve. Spencer Sheen, Head of Gatwick Retail, sums it up,  “Passengers expect more from airport shopping, especially with what’s on offer in some of the airports in the Middle East and Asia. They want more choice, availability and diversity. Competition is really key for us; we want to be right up there with the likes of Westfield and Bluewater.”

However, whilst an airport presence is immensely attractive to a retailer, the trading environment is nothing like the high street. Customers are in a more ‘affluent’ state of mind at the airport, with spare money to treat themselves and their family. Plus, each shopper, around for just 60 or 70 minutes on average, comes with the expectation of an easy to navigate, exciting shopping environment. Our experience of working on 5 UK airports shows that even though shoppers may be a captive audience they still expect the hotel experience to start in the terminal itself. This means that, “No frills” retail just won’t fly!

As Spencer points out, passengers are now demanding more choice, availability and diversity, all topped off with an engaging experience. Waiting for a flight, with time to kill and money to spend, they want to be entertained. Which calls for even greater contributions and innovation from retailers, not only in product mix,  but also in store design. Airports once criticized for their interchangeable retail formats, are always looking to raise their game and recruit ‘A’ list brands like John Lewis, Harrods and Selfridges to add to their retail mix, brands that are not yet represented at other airports, or which underpin the airport’s unique profile.

For the retailer a coveted airside store means increased online business and enhanced brand recognition with an international audience. With so much to gain, there is little doubt that airport retail will increasingly become ‘best in class’ for retail store design and customer delivery over the coming years.

a brit of luxury….

Until now that it is.

Britishness is definitely hip again and companies like Burberry are steaming ahead with spectacular growth revenues up nearly 30% last year, Mulberry profits are up over 300 % and even huge ticket item like Rollers are seeing huge growth with the luxury car company reporting 40% growth thanks to high demand in the emerging BRIC economies. Some of the smarter old wave Brit luxury brands are reinventing themselves nicely on the back of this new wave of cash and popularity. Barbour for example has collaborated with a series of very “now” designers such as the Japanese Tokihito Yoshida, and is in such demand that Anne Pitcher, managing director of Selfridges, says she “can scarcely keep it in stock”, so fast is it selling.

Whilst over at Barbour’s headquarters, figures confirm another success story – turnover has risen 20 per cent. Everywhere one turns, one sees Britishness being celebrated: Meryl Streep playing Margaret Thatcher, the cast of Downton Abbey feted like rock stars in the US, then of course there was the Diamond Jubilee and the Olympics. It’s interesting that sometimes it takes a foreigner to see what’s so great about being British. Ed Burstell, an American who is now managing director of the London department store Liberty, which has always leveraged Britishness as one of its great themes, is convinced something new is in the air. “I see many customers who want to own a piece of something British, and they’re willing to pay a premium price for it.” Changing tastes certainly seem to be running in Britain’s favour.

Throw in a bit of heritage and genuine quality and 2013 could be a great one for all that we do best.

nirantarta!

M&S’s Plan A broke-even long before its projected date, and by 2009-10 had added £50m worth of net benefit to the company. Smart companies have expanded their CSR and sustainability on many diverse levels, looking towards the horizons they operate within. With their green message driven home through media saturation the consumer is preached to daily. However, beyond the process of promotion and sales of goods or services, businesses generally remain disconnected from the communities they operate in. Localism remains a mystical notion to big-business in Europe. It is seen as a challenge – whether in urban communities that rally against the latest incursion by a coffee or supermarket chain or a European state refusing meat imports. Where ‘safe’ standardisation drives profits, addressing individuality is perceived as an expensive pursuit.

The diverse nature, of urban communities in particular, confuses perception exponentially. The recent nationwide riots saw great numbers of people contributing to the clean-up and restoration of areas damaged by their disenfranchised ‘neighbours’. On the other side of the world, in the emerging Indian market, the approach to localism is simpler but so much more relevant to the whole of the society.

In a report produced for Mumbai’s ‘Forum for the Future’, sustainability company Futerra reports Indian attitudes to green issues as being “filed firmly in the box labelled “nice to have – but non-essential”. Bucking the trend however, is a young company by the name of Abellon, an energy provider  that seems to have identified the missing link within business models worldwide. Where M&S have defined a sustainability approach within the European market, Abellon have pushed further. Firmly establishing its global responsibility, amongst its business model headings, alongside Agrisciences, Bio-energies and Waste Management Policy is an intriguing heading: ‘Poornakumbha’.

Poornakumbha symbolically represents an ‘empty pot’, “ready to receive and collect all that a community has to give after having enriched and enhanced its riches multifold”. Its roots are based in Ghandian philosophy, spirituality and entrepreneurialism – phrases you will be hard pressed to find in European business strategy. At its most basic, Poornakumbha promotes empowerment of communities by sharing of
inherent intellectual and financial wealth of big-business. Poornakumbha provides education and tools to drive local initiatives such as ‘wealth from waste’ – a cradle-to-cradle process that encourages re-use of waste energy products.  In a society that acknowledges such obvious social divisions of class and caste, Poornakumba represents an inclusive notion of sustainability and corporate social responsibility. Maybe this innovative business model  offers a form of
engagement and community healing that the West may benefit from?