06 | 2020-2030 : Retail predictions from those who know
Hello,
It’s 2020 and there are, rather neatly, now 20 of you receiving this. Thank you for reading. Feel free to send on / spread the word, it feels nice when someone new joins the list, as simple as it is.
Many a retail prediction for the new decade has been made over the last month or so. Here's some highlights...
The Future Laboratory talks about mixed reality (using AR overlays to encourage deeper experience) and the new generation of department stores (see more below), as well as our collective concern for the planet driving retail over the coming decade.
Similarly, JWT also predicts ‘consumers purchasing for values more than ever’; Gen Z buying with ‘less frequency and more mindfulness’; AR (again), and, more unusually, subscription services growing to include clothes, cars and homes (at least, if you’re in Japan); virtual shopping (anyone remember Second Life?), the death of the luxury department store; high-level design spaces for Millennial parents and their offspring (barf) and (finally, deep breath) food retailers focusing on highly targeted convenience (blending the digital with bricks and mortar).
And then we have Mintel saying:
‘‘Phygital’ local community services will transcend retail as consumers pushback against cashless payments and fully unmanned stores, demand more data privacy, and seek more ‘human’ interaction.
and
‘A decline in retail store branding in favour of branding the seamless online-to-offline (O2O) retail services.’
So, that’s clear, eh?
What's clear to me is that good ideas and consumer (human?)-centred services and emotionally charged executions still succeed. The latter, perhaps, more so at the top end of the market.
Where’s my evidence that good ideas, human-centred services and emotionally charged executions work?
Well, Glossier just announced that its Covent Garden pop-up had over 100,000 visitors during its 2.5 month tenure and is staying put.
And IHL’s recent report, Retail’s Rennaissance, shows how, in the US, openings actually exceed closures (in the conclusion, it notes how the media’s ‘clickbait’ nature drives negative headlines about the sector - I’d argue the same happens here in the UK).
In the US, the multi-brand concepts (or department stores, of a kind) get a fair bit of press as they continue to grow. Bridging the gap between digital-first operators and physical spaces, the likes of Fourpost, Re:store, Showfields and Neighbourhood Goods are all worth keeping an eye on. Essentially they let smaller direct-to-consumer brands take a chance on physical retail in areas of high footfall. According to Stylus, Showfields has hosted 150 brand events in the last 6 months and the average visit length is 33 minutes. No mean feat. This said, I get Anna Wiener's point that it does feel rather transient. Btw, her book Uncanny Valley is a good read / listen: she's a caustic observer and mentions the online brands going for bricks and mortar, noting how 'the stores seemed to emerge overnight... with their white walls, rounded fonts and bleacher seating: matte simulacra of the world they had replaced," ha!
Another big idea that has captured much attention over the last few weeks is the Finnish post office’s self-service store for online shopping customers. It’s a good build on Amazon lockers - taking the functionality and adding some service elements and a dash of fun to proceedings with a just the right side of kitsch design. I reckon we'll see a few copycats of this idea.
It's also worth listening to the voices with experience. The likes of (disclosure: current boss) George Gottl’s take on The Conversation Age and Mary Portas’ take on Kindness. Ok, so both have a vested interest in keeping some form of physical retail alive and well, but both also have decades of experience in this field.
And finally, a recently published by Monocle's Tyler Brule (disclosure: former boss) - his take on the power of three Ps: premium, proximity and patronage. As ever, he's on point, but these 'Ps' only really work for retailers serving the wealthy niche that Monocle targets so well.
So, there you go. Reasons to be optimistic...perhaps!
Cheers, and have a good week,
Adam
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PS. I'm thinking of theming these emails for the foreseeable — topics in mind are: department stores, high streets, customer experience. If you've anything you'd like to read more about, let me know.
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