By Cat Stevenson, Senior Consultant, EMEA Cross Border Retail & Leisure
We are currently facing peak retail apocalypse. At least, that’s according to the latest news headlines. There’s no denying these are some of the toughest times for the industry. However, while there is no shortage of reports of retailers buckling under the pressure, there are also many brands that are in fact thriving, having taken a proactive and agile approach to the evolving market. In this current climate, retailers can compete and even flourish. It’s a tough environment, but there are definite steps retailers can take, not only to avoid having to call in Mike Ashley as their saviour, but to prevail as stronger and more profitable than ever.
1. REVAMPING TRADITIONAL FORMATS
Once the crown jewel of the high street, the traditional department store no longer resonates with shoppers in the same way it used to. Having every product stocked under one roof – formerly the USP of the department store – simply does not have the same allure in this Amazon era. A lack of investment, poor product proposition and an uninspiring store environment also threaten the extinction of some of the nation’s staples.
But it’s not the same story across the whole sector. Voted the best department store in the world, Selfridges has become a trailblazer in innovation, pioneering brands and inspiring pop-ups such as the current #FendiKiosk – complete with Fendi balloons, postcards and even custom gelato.
Other department stores have also found their niche and capitalised on what they do well; such as Liberty with its heritage and exclusivity, and John Lewis with exceptional customer service and experience (think rooftop restaurants and this summer’s sensory installation, Poolside). The department store is also being reinvented in other ways: The Shop at Bluebird offers a journey through the evolving worlds of fashion, interiors and beauty. In a virtual sense, ASOS has become the Millennial’s department store, with its constantly-refreshed, ever-expanding range of designer goods, luxury cosmetics and homewares.
2. USEFUL TECH
Think not just for tech’s sake; genuinely useful technology that easily fits into our lives, making shopping an enjoyable and effortless experience.
Pioneering technologies such as ‘visual search’, which uses Artificial Intelligence to enable shoppers to find products using a photograph taken on their smartphone, is now being adopted across fashion (e.g. ASOS) and beyond (e.g. eBay). This type of technology inspires consumers and accurately assists in finding exactly what a shopper is searching, making the purchase process as streamlined as possible for them.
Zara is top of its game when it comes to speed and responsiveness. It can deliver new collections within two weeks of their catwalk appearance (against the average of around six months). ‘Seamless omnichannel retail’ is an over-used catchphrase in the industry, but this is a real example, and is driving Zara’s competitive advantage. It has leapt one step further by connecting its online and offline inventory, meaning that even if items are sold out online, they can be sourced and shipped to the consumer from a nearby store.
3. SEIZING SOCIAL MEDIA
Social media has become embedded in many consumers’ day-to-day lives, so – naturally – retailers are using these platforms as a way to promote their brand. Swedish fashion e-commerce company NA-KD has experienced rapid growth as a result of its collaboration with a number of social influencers, amassing 1.7 million followers – and generating annual sales of $70 million – in just a few years.
Instagram has progressed in leaps and bounds when it comes to an integrated customer journey, with new functionality that enables users to purchase products directly from their feed. Retailers such as Sweaty Betty have jumped onto this bandwagon, to take advantage of the profit potential. Missguided recently made the shrewd step of partnering with Love Island, taking advantage of a shoppable Instagram, with a key demographic to promote its products as they appeared on screen, which saw sales increase by 40% week-on-week. The question is, now the show is over, will consumers stay loyal or will their heads be turned by the next reality celebrity endorsed goods?
The popularity of social influencers can be as fleeting as a Love Island romance, which can be tricky for retailers to keep up with the most relevant brand ambassadors.
Other brands have side-stepped influencers, instead communicating directly with their social media following. Beauty network Glossier has garnered an army of devoted fans through personal, loyalty-inspiring dialog. Rather than marketing through bloggers, Glossier sends new products to hundreds of their most engaged ‘superfans’, ensuring that the consumer is rooted in their product development (and strategy).
4. COME RAIN OR SHINE
It’s our favourite topic of conversation. So why do some retailers seem to keep their eye off the forecast?
During a recent trip down Oxford Street, it was surprising to see the number of stores showcasing their Autumn/Winter collections during peak-heatwave. Compare this to Lidl, which quickly launched a ‘Sleep Saver Kit’ consisting of a fan, cooling bedding and lavender to help people sleep through the hot spell.
The rigidity demonstrated by some retailers, with slow reactions and outdated ways of functioning, is putting some brands even more at risk of fleet-footed fast-fashion brands such as Boohoo and Pretty Little Thing.
So how can retail hold onto life? Retailers must embrace the emergence of new retail channels and evolving consumer behaviour, which requires endurance and agility. Customer interaction is also key: not just in a transaction sense, but also reinforcing a connection to the brand by involving the customer in the product development process. These are traits which the most successful brands are adopting, to maintain and strengthen their consumer appeal, regardless of which channel that is delivered by.
Cat Stevenson is a Senior Consultant within the Cross Border Retail and Leisure team based in London. Cat’s key responsibilities involve providing retailers and leisure operators with bespoke advice on new market entry, store portfolio management and location strategy globally. Cat has extensive knowledge of demographic analysis and market research techniques in the context of retail and property consultancy projects.