The New Retail Revolution
An Industry insider's POV by Alison Jordan
24h September 2018
Proportion's Managing Director advises on how to combat with the challenging changes facing our industry and dismisses discouraging assumptions.
With so much turmoil in the retail world, it is easy to focus on the many challenging changes facing our industry. And there is no doubt, these are, as Charlie Mayfield said, "not a blip, but seismic". In the rush to meet these though, we must ensure we don’t forget some more basic points – I would argue that remembering these could be the difference between demise or survival.
Human beings are social creatures - we need, as well as want, contact, and interaction
The isolation that ‘social’ media can cause is a recognised reason behind so much anxiety today . We are already seeing a revolt against social media for that reason – Generation Z (after Millennials) on one hand describe themselves as "more addicted to their technology than Millennials" – but at the same time, they are also recognising the harm that can be done.
We still live in tribes (though smaller, more niche and segmented )
We still want to mark out the membership of our tribes through a mix of what we have and what we do.
Note: not exclusively what we do at the expense of have.
Consumer purchasing decisions are still made by our primitive lizard brain and post-rationalised by our pre-frontal cortex
One might have expected that the huge growth in information that the internet has provided would encourage consumers to make informed, rational purchasing choices. In fact, the opposite is true, with the power social media gives to show the world what we have acquired, powering more irrational decisions. The resurgence of Gucci is driven, in no small part, by the clever ranging to include many more entry-level, highly instagrammable pieces. Stores can further capitalise on this with instagrammable displays and layouts, to encourage sharing even before the product is purchased.
Online shopping – everyone is doing that, and people want stuff instead of experiences anyway
If your offering is the soulless exchange of goods for cash in a sterile environment, then why would anyone schlepp into town for that? But offer a unique experience and there is a reason to visit your store, and a very good chance, if it is thoughtfully bought, well stocked and beautifully merchandised, the sales will be higher. The novelty of scarcity has long gone, but people still want stuff, but just a great experience too as they get it.
Experience? Oh, you mean a prosecco bar?
For some people, that glass of prosecco will be the epitome of a luxury experience, but I would suggest a thoughtful approach might resonate more.
My own ideal experience is based firstly around a curated, thoughtful array of merchandise that is not ubiquitous, is of excellent quality, and is both to my taste and yet tempts me out of my comfort zone.
I want staff who acknowledge me appropriately, and indeed recognise me if I’m a returning customer, are sensitive enough to detect whether to engage or not, are happy to help when needed and offer advice and suggestions i.e. get me more sizes, and generally make me feel like the centre of their world for at least a little while.
More than ever, I want a store environment that feels like a magical escape, a wonderland where I can be inspired, engaged and forget the outside world for at least a moment – and then, of course, purchase a little piece of that too. Take the time to understand your customer’s ideal experience and ensure your staff are both confident enough to deliver it and empowered enough to tweak and personalise it.
It’s all about data and technology now
Well, they are great if they can help you answer fundamental questions about doing retail well, but technology for technology’s sake is a friend to no one. Don’t ever think AI will help in merchandising – if you keep feeding in the data the algorithms get to work and everything gets refined to the point where we’re all wearing white shirts, blue jeans or black trousers. AI will tell you that pink and taupe don’t go, but tell that to Mrs Prada. Research has found that humans crave familiarity in sound (one of the reasons X Factor winners do cover versions) but newness in visual matters. Keeping it fresh in both product and visual merchandising is key to returning sales.
But we know this beige jumper sells
Tough, I know, but try a little bravery in buying or product development and display – carry 100 of that fabulous dress, be happy when it sells out, delighted your customers know and feel they have something exclusive, and confident that your next fabulous dress will do just as well, but it will be different. And have a point of view; some will hate it and you, but hopefully more will love it – indifference has never been a recognised sales driver. Remember you are targeting smaller, more clearly defined tribes.
I'm too small to do these things
Well, I say embrace your size. Many established retailers are labouring under the tyranny of scale, the legacy of thoughtless expansion driven by a credit-fuelled consumer boom. Whatever other challenges you have, be grateful if you don’t have an estate of expensive, poorly located stores, supporting an e-commerce operation that is struggling to challenge Amazon.
And most of all, embrace the visual. Think of technology and beyond the depressing search by price, it is all about the visual. And don’t think that means expense – small pieces of VM kit, clever ideas and whimsical experiments need not cost much – and if they don’t work, change them tomorrow! Diana Vreeland is oft-quoted – ‘the eye has to travel’ and that is an exemplary summing up our innate need for visual newness. A lesser known but ever more relevant quote here is – ‘there is only one thing in life and that’s the continual renewal of inspiration’. Physical stores are uniquely placed to offer that inspiration and as such will remain, albeit in a different form, a cornerstone of any brand’s offer.
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