Retail, shopping & leisure
Impatient and Increasingly Well Informed
A decade or so ago, many exuberant e-experts were predicting the death of bricks-and-mortar stores due to the rapid emergence of online stores and e-tail. It didn’t happen. Instead the Internet has complimented physical stores and given customers the choice of how and where they shop. The Internet has also fundamentally changed consumer behaviour because it has shifted power in the form of information from the retailer to the customer. Shoppers are now increasingly well-informed and increasingly impatient thanks to the speed of the Internet and the control it gives them. However, while convenience is important, it’s not the only factor. Customers also like physical stores because they are sensory and in some instances highly personal. As a result, physical stores are investing in the best of both worlds, which means superfast information access and superfast delivery. For example, Bloom Supermarkets in the US (owned by Food Lion) has installed scanning technology that allows customers to scan items as they pick them up, thus allowing them to keep a tab on their final bill, but also speeding up the final checkout. In a similar vein, Circuit City (US) is promising that any item ordered over the Internet will be available in-store within 24 minutes or the customer will get a US$24 gift card to soothe their lack of instant gratification. Interestingly, Circuit City reports that 50% of online orders are now picked up from one of their stores. Meanwhile, Best-Buy (US) is investing in staff training so that its staff know at least as much about the products they are selling as their customers, many of whom are using cell phones in-store to search the Internet for product information or to compare prices via sites like frucall.com. Bloomingdale’s have gone one step further by installing technology that allows customers to try on clothing in front of an interactive mirror and then email images to their friends for comments and suggestions. A final example of the merger between bricks and clicks is Barnes & Noble. The bookseller is installing kiosks that allow customers to search for obscure and out-of-stock items. So what are the takeaways for retailers here? First, customers want more information and control.Second, they want delivery and payment to speed up, and third, they want more service. The latter obviously clashes with the need for low prices but the modern customer is nothing if not demanding and contradictory.
Ref: BusinessWeek (US), 17 December 2007, ‘More Clicks at the Bricks’, N. Byrnes. www.businessweek.com
Search words: Retail, Internet, e-tail, e-commerce
Trend tags: Experience economy
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Facebook for Fashion
Social shopping or ‘crowdsumption’ is what happens when social networking principles meet the vagaries of fashion. It’s what happens when the fickle facebook crowd meets the faddish fashion industry. There is even a new word for this – shopcasting – that describes people that look at what other people are looking at or wearing right now. Narcissism? More like Narcissism 2.0. Sites like Osoyou.com and ThisNext.com connect people with similar interests and tastes and represent what some observers are calling a new ‘referral economy’. There is definitely something interesting going on here, especially sites like Nethaggler that tap into the purchasing power of large groups of individuals. Also interesting are sites that represent a merger or hybrid between media and retail. However, we shouldn’t get too carried away with the wisdom of the masses, because all to often the wisdom of crowds seems to think very short-term and often exaggerates the importance of the new.
Ref: Financial Times (UK), 20-21 October 2007, ‘The wisdom of crowds’, F. Harkin. www.ft.com
Search words: Retail, shopping
Trend tags: Social networking, web 2.0
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Retail Wish Lists
One of the hottest trends in US retail over the 2007 Christmas season was the little list. Wish lists have been around for ages but thanks to the Internet they have now gone high-tech. Stores like Searle, a US chain of luxury clothing boutiques, sent messages to husbands telling them what their loved ones wanted for Christmas. And if you think that’s a bit invasive, consider Net-a-Porter.com who went one step further by allowing women to send videos to husbands and boyfriends showing them exactly what they wanted. What you think of these wish lists obviously depends on a number of factors. Some – especially women – are fed up with men who buy the wrong present or, worse, buy something dreadful from the local gas station at the very last minute. True, some people are clueless and need a little help and many are also very busy so every little time saving idea helps. Of course, outsourcing the entire present buying experience to a ‘Gift Guru’ at Selfridges is another possibility, and completely removed from buying and wrapping the present yourself.
Ref: Wall Street Journal (US), 1 December 2007, ‘Hey Honey Bunny, Stores Know What Your Wife Wants’, C. Lu-Lien Tan. www.wsj.com
Search words: Retail, shopping, gifts, presents, buying
Trend tags: Busyness, Too Much Choice, Speeding-up
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The Future of Retail – Maybe
What’s next in retail? According to Viewpoint magazine, the trends include stores becoming embedded in the local community. This makes a certain amount of sense as it links back to the history of retail and also to the rise of localisation, although citing the Samsung ‘Experience’ space in the Time Warner Centre in New York isn’t the best example I’ve ever heard of. Another trend that’s highlighted is the LATTE Factor – Local, Authentic, Trustworthy, Traceable and Ethical. Spot on with that one. Another trend is The Service Initiative. Again, no arguments about this one, although why not just call it customer service? Finally there’s a trend called Only The Rare And The Beautiful. The idea here seems to be that the ‘democratisation’ of luxury is falling apart and thus elitism is making a comeback True but to be honest the ‘masstigue’ trend was always nonsense (people have now rumbled that fact that it’s rubbish) so it’s hardly a surprise that the term is falling apart. Rarity is a nice new buzzword but surely this is nothing new or substantial either. Luxury, by definition, has always been about rarity and exclusivity. It’s about saying no.So what else is on the retail horizon? If you can fight your way through the jargon,the answer includes E-mmersive retail (Brick/Click interfaces and blended environments), Magic Mirrors (Smart mirrors and web-connected mirrors), Mobile Retail (vans and trucks but also guerrilla retail and pop-up retail), New Villages (local retail hubs and covered outdoor markets), Aerotropolis retail (airport and transport-hub based retail) and Orbital retail (on-board shopping on planes, trains and ships). Viewpoint lists some interesting trends, but most most of the nuggets are obscured by a thick cloud of obscure buzzwords and meaningless phrases.
Ref: Viewpoint (Neth), issue #21, 2007, ‘The New Rules of Retailing’, M. Raymond.
See also ‘Retail 2020’, L. Hancock, ‘Empire of the Senses’, J. Bell and ‘Immersive Retailing’, M. Rayman (all Viewpoint issue #21) www.view-publications.com
Search words: Retail trends
Trend tags: -
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The Premiumisation of Everyday Items
Would you pay US$300 for a pair of socks? According to Dan and Chip Heath (authors of a book called Made to Stick) ultra-premium socks are an inevitability.The argument here is that products become ultra or uber-premium when they are ideas. For example, ‘luxury goods are no longer a sign of status; they’re the mark of connoisseurship’. This is an interesting but somewhat shallow argument. Some products undoubtedly lend themselves to artisan, personalised or luxury variants, particularly when there’s a story to be told and they are available in strictly limited numbers. However, the idea of ‘value-add’ is, in my opinion, very often abused.For instance, I can see the idea behind certain bottles of water that cost $5 or $10 and even why people would prefer these premium waters to tap water. However, bling water at $300 a bottle is nuts. This isn’t connoisseurship, its stupidity. Equally I’m getting a bit fed up with the fact that I can no longer buy a basic toothbrush for a few dollars and have to put up instead with things that cost a fortune and look like they’ve been designed by NASA. There is even a toothbrush available at the moment that has ‘sat nav’ so you can find the right tooth to brush. Seriously.Hence, to say ‘our concept of luxury has evolved’ is rubbish. Luxury is about knowledge and discernment as much as cash, and if the rash of uber products is anything to go by I’d say that our discernment is declining not increasing. $300 socks? They probably are inevitable but that doesn’t mean they should be desirable.
Ref: Fast Company (US), September 2007, ‘The Inevitability of $300 Socks’, D. Heath & C. Heath. www.fastcompany.com
Search words: Retail, Luxury, socks
Trend tags: Premiumisation
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If something sounds too good to be true, it usually is. The global luxury goods market has been booming thanks largely to high disposable incomes and the growing and increasingly affluent markets of Russia, China, India, Brazil and the Middle East. However, this growth seems to be slowing down due to the triple threat of falling house prices, tighter lending and rising energy and food costs. Clearly this isn’t a major concern for the ultra-wealthy but the merely affluent will probably start to downgrade their spending during 2008 and the trading-up that has been so prevalent over the past three years will probably be replaced by trading down.According to the Luxury Institute (US), spending on luxury goods will grow by 5-9% during 2008, compared to the double-digit growth of the last few years. An early example of this economic downshifting is Starbucks. This manifestation of ‘massclusivity’ or affordable luxury has reported its first ever drop in footfall in its US stores. However, the problem isn’t just the economy. Luxury goods companies like LVMH have been having their cake and eating it by selling exclusivity to the masses. ‘Massclusivity’ is clearly a contradiction. The essence of luxury is surely that not everyone can afford it? Thus ‘Massclusivity’ and ‘affordable luxury’ are oxymorons. Talking or morons, many luxury fashions brands are a chimera because of the ethical and environmental costs associated with these goods. After all, how can anyone really feel good holding a $3,000 handbag if its been made in China with child labour? Some companies are trying to get around this problem by adding an element that’s made locally but this is surely against the spirit of authenticity and realness. We are also seeing the development of new ideas like eco-luxe (sustainable luxury goods) but even this idea could fall foul of bigger shifts in customer attitudes and behaviour over the years ahead.
Ref: Chicago Tribune (US), 2 January 2008, ‘2008 may test luxury market’, S. Jones. www.chicagotribune.com,The Australian (Aus), 20-21 October 2007, ‘Inglorious excess of luxury goods’, S. Gare. www.theaustralian.news.com.au
See also Deluxe: How Luxury Lost its Lustre by Dan Thomas and Luxury Fashion Branding: Trends, Tactics and Ideas by Uche Okonkwo.
Search words: Retail, luxury, luxury goods, luxury trends
Trend tags: Premiumisation, liquidity
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