the-future-of-retail

With the dust settled after Black Friday, Cyber Monday and the extended ‘events’ created by retailers around the annual bargain bonanzas, do the results tell us anything about the future of retail?

For the high street, the outlook wasn’t rosy. Diane Wehrle of shopper traffic measuring firm, Springboard described it as “not Black Friday but mid grey week” and footfall was down 4.2% on Black Friday 2016.

Conversely, online retailers enjoyed £1.4 billion in sales, despite Black Friday this year falling early, ahead of most workers’ November payday and an increase in extended Black Friday sale events, which analysts at IMRG warned had the potential to dilute sales.

The clear victory for ‘clicks’ over ‘bricks’ inevitably had many pondering if this was a death knell for the high street, the triumph of e-commerce over bricks and mortar.

However, the behaviour of consumers around this peak shopping period is a microcosm of the wider retail landscape. Outside of the discounting frenzy the buzzword for retailers is ‘experience’ – referring in particular to those that cannot be recreated online.

Kate Cox, Managing Director of specialist retail PR consultancy, The Retail Room, says: “Retail is changing rapidly and we are approaching a new era in which customer experience reigns supreme.

“While price will always be a key consumer consideration, there will always be people who are willing to pay more for a unique experience or higher quality service and this cannot always be delivered online.

“With rents continuing to rise and traditional store set-ups failing to bring customers through the doors, retailers are being forced to think more creatively about how they use their physical space. Simply showcasing core product is no longer enough.”

Bricks vs. Clicks

Five years ago there was a great deal of conversation around the growth and subsequent power of pureplay e-commerce retailers, businesses born and developed online, as well as a seismic shift of bricks and mortars retailers onto the web.

Able to offer greater choice and lower prices to shoppers, plus the convenience of delivery, online retail giants like Amazon seemed unstoppable, draining footfall away from physical stores and believed by many to herald the end of bricks-and-mortar retail.

But then, in June 2017, Amazon agreed the $13.7 billion acquisition of Whole Foods Market – which has a portfolio of 460 physical stores.

So why was the definitive victor of retail ecommerce suddenly investing in the very thing it was believed to be wiping out?

For the same reason that bricks and mortar giant Walmart recently acquired upscale men’s fashion retailer, Bonobos.

Retail Reinvention

The future of retail isn’t bricks or clicks. It’s a reinvention of both retail formats, to facilitate a more integrated and seamless shopping experience and deliver.

Consumers love the convenience of online shopping, the ability to research, read reviews and – most importantly – find the best deal or lowest price.

However, there is still a desire for physical interaction, to touch, feel and be confident in the quality of the product they are purchasing, as well as the growing demand for unique experiences to interact with brands.

In the past, core product would drive footfall into large flagship stores with ease, but now even behemoths like Tiffany have to think more creatively to attract customers away from their tablets.

Falling footfall and in-store sales for the iconic jeweller led to the creation of “The Blue Box Café” where shoppers can experience Audrey Hepburn’s famed breakfast for around £22 per head. An Instagram-worthy experience that provides the opportunity for beautiful digital UGC, but which can only be experienced on the fourth floor of is flagship store in New York.

Amazon’s acquisition of Whole Foods will allow it to leverage some of the benefits of its offline rival Walmart’s bricks and mortar muscle. The US retail giant has used its physical locations to lower its prices online by offering ‘pickup discounts’ on online-only items, bringing prices in line with Amazon’s in some categories.

Walmart’s takeover of high-end online retailer Bonobos, however, goes a step further and takes the low-price retailer brand into a whole new sphere.

Exactly how this will be utilised is yet to be seen, but it could potentially bring existing customers of the brand in-store to ‘try before they buy’ providing the shopper with the physical experience they desire.

Integrated Online and Offline Experience

This desire for on integrated online and offline experience is perhaps even more evident in the luxury sector, with brands such as Oscar de la Renta and Galvan still investing in physical locations, but ensuring their function is far from the traditional – and dying – model.

Oscar de la Renta’s Rue de Marignan space in Paris is set to be a modular space with displays that can be cleared for customer events, a location for wholesale presentations and a tailoring studio so customers can have fittings and alterations undertaken on site.

The brand’s stores are now also destinations for the personal shoppers (and their customers) of luxury shopping portal, Farfetch, which the brand has joined in a bid to expand its e-commerce, a move which as seen sales of around $200,000 (£149,000) a month, the majority from new customers.

Global e-commerce success story MatchesFashion.com, which has tested numerous pop-up spaces over the past 12 months, is also set to open a permanent space in Mayfair, which will feature a smaller range than its main website, but provide iPads for in store browsing.

Most interestingly it will boast a floor dedicated to digital content, where it will stage events, discussions and classes, all of which will be streamed on Facebook Live and YouTube, as well as being broadcast on its social channels and website.

Level Battlefield

Consumers no longer see retail as online or offline, they see it through one lens and expect the benefit of both. They want the convenience of ‘on-demand’ service, choice and value, coupled with a physical experience and unparalleled customer service.

The ‘battlefield’ has been levelled and the future of sector now lies with the retailers who learn to integrate and innovate to deliver what has always been key to success; making buying as easy, cost-effective and as enjoyable as possible.

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