Retail, shopping & leisure
Very Important Products
Here's an idea from Habitat (the home-furnishing store in the UK) via Target in the US - getting celebrities to design everyday products. A few years ago Target hired French celebrity designer Philipe Starck to re-design ordinary objects. Now Habitat has hired a range of 22 designers and celebrities like Helena Christensen, Issey Miyake and Daft Punk to create products like coffee tables and CD racks. Some designs, like the Manalo Blahnik shoehorn are sublime. Others, like the Lennox Lewis alarm clock, are ridiculous. Is our obsession with celebrities now so consuming that we'll buy anything with a name on it?
Ref: Wallpaper (UK) January 2005.
Links: Ian Thorpe pearl jewellery and Kylie Minogue underwear.
20 years ago many people would have thought that the idea of selling bottled water was a bit radical. Equally the thought of paying GB £ 2.50 for a cup of coffee would have been greeted with hoots of laughter, so perhaps the idea of a shop selling bowls of breakfast cereal might actually work. Cereality is the name of a café, which its owners hope will eventually become a global brand. The café offers customers 33 different types of branded cereal, an assortment of toppings and a choice of milk for US $3.00 a bowl. The café itself is designed to look like a kitchen and there's a communal table and TV. Staff are called 'cerealologists' and wear clothes that look like pyjamas. Will the idea work? You'd think not because customers can simply make their own bowl of cereal in under a minute for a fraction of the price. Cereal is also strongly associated with breakfast rather than lunchtime snacks or evening meals. Moreover, the argument that people can make their own coffee - so why go to Starbucks? - underestimates the cultural significance of 'third spaces' and making great coffee and cinnamon buns isn't quite as easy as it seems. Then again, the cereal idea is a great sampling opportunity and anyway who'd have thought that you could make soup work in a retail format?
Ref: All-Cereal Restaurant Opens in Philly, China Daily 3 December 2004. http://www.chinadaily.com.cn America thinks we will warm to take-away porridge A. Raynor, The Times (UK) 16 October 2004. http://www.timesonline.co.uk
A version of 'permission marketing' is about to hit retail with the development of in-store technologies meshing with data obtained from frequent shopper programs to create mass personalisation. Over the past decade retailers have accumulated a treasure trove of information on the individual buying habits of customers but until now it has been difficult to use this information in real time. However, new technologies, many of them wireless, are set to change all this and revolutionise how people shop. Imagine, for example, that a high spending customer walks into your store. What if an alarm was activated and sales staff were diverted to interact with the customer? Obviously this kind of technology could be highly intrusive unless it can in be an opt-in option from the customer point of view. Equally, various self-help or DIY service options can be frustrating for some customers but useful for others. Another problem is that historically most stores were created to appeal to an average customer and there is often a subconscious assumption made by designers that there's only ever one customer instore. As a result customer service is often overloaded and checkout waits are frustrating for customers and owners alike. The larger or more successful the store, the bigger the problem. A host of new innovations such as RFID, self-scanning and self-checkout will ease these problems but their effect will probably be generational. It will be the younger, more tech savvy customers that will benefit the most from these innovations, especially when smart phones are added to the retail equation.
Ref: Sporting Goods Business (US) 1 December 2005/various
High tech versus high touch
An article in the Harvard Business Review says that companies are losing out because they fail to integrate or properly manage 'touch points' where customers come into physical contact with the brand. Moreover, interfaces can become liabilities if they operate at cross-purposes with each other. This is important because for many companies customer service is the only area where they can build sustainable competitive advantage. Most product offerings become generic within a short space of time with product features and price both converging. Moreover, finding (and training) skilled customer-facing staff is becoming increasingly difficult because everyone wants them. In the US, for example, employees in fast food companies stay in the job for just 4-5 months on average. Technology will solve part of this problem. Machines are getting smarter and customers are getting more used to dealing with them. The REI store in Seattle (US) uses smart kiosks to supplement traditional customer service. Each REI store carries around 30,000 SKUs of which staff can only be familiar with a fraction. Each kiosk, in contrast, carries information on 78,000 SKUs and product knowledge is flawless. We are already witnessing a revolution in customer service and companies are busy rethinking how operations can be redesigned to take full advantage of these new technologies. However, most organisations are focussed on using technology to reduce costs, which means standardising interfaces. This is fine in some areas where customers want quick information or action, but it's disaster in others where customers want to be recognised as individuals. The answer is to use a combination of man and machine with the former focussing on attributes like empathy and judgement (knowing when to make an exception to a rule) and the latter focussing on fast processing and information.
Ref: Best Face Forward J. Rayport and B Jaworski, Harvard Business Review (US) 1 December 2005
Marks & Spencer (UK) has tested a male créche in stores in Sheffield, Gateshead, Aberdeen, Cardiff, Edinburgh and London in an attempt to keep men happy while their wives go shopping. The créches feature TVs, magazines and various toys like radio-controlled Porsches.
Ref: Daily Telegraph (UK) http://www.telegraph.co.uk
Old is the new new
It could be the influence of eBay or it could simply be the fact that someone had the idea of re-framing second-hand clothes and charity shops as 'vintage', but old clothes are new again. The culture of recycling is now so established that DKNY on Madison Avenue is selling old clothes next to new and Bon Marche in Paris has converted an entire floor to second-hand clothing. Then again, maybe it's simply the fact that designers have run out of new ideas.
Ref: New York Times (US) http://www.nytimes.com