Retail, shopping & leisure

The allure of the old

Vintage has been the new black in fashion circles for a while, with everyone from mass-market denim makers to low-cost leather jacket manufacturers creating a lived-in look. But now well-worn clothing and accessories appear to be linked with a resurgence in local craftsmanship to create a demand for ‘old new’ or what one FT commentator described as a “certain insouciance.”

Status by another name essentially. Examples of faux ageing might include: sneakers by Maison Martin where the shoes are treated to look like old scuffed up ‘used to be white’ school trainers, Belstaff’s ‘antique black’ range or garments by Casey Vidalenc (hands on do-it-yourself "bricoleurs").

So what’s going on here? This interesting trend for artful distress is especially evident at the luxury end of the fashion world. Many of the garments and accessories with ageing now being applied are very well made, often by hand, and made in limited numbers where the ageing process is so labour intensive that it’s difficult for mass-market brands to copy. Stonewashed denim this is not.

Part of the story here is of a customer who wants something that few other customers have. But it also suggests a more relaxed, less showy or externally directed mindset, which would historically have been associated more with old money than new money.

Of course, there’s another explanation. In a world full of perfect digital copies and online retail, where goods from anywhere in the world can be sent anywhere else in hours, luxury is increasingly being redefined either as things that money can’t buy or things you have to wait for. Luxury has always been things made in small numbers where each item is in some way unique. But now they are items where the maker is not influenced by trends but is selling something from the heart. BTW, a final thought. Do older people like to own or wear things that look old, while younger people prefer newer things?

Body scanners offer perfect fit for a digital era

People said nobody would buy clothes online because clothes needed to be tried on first. The fact that people had been buying clothes via mail order catalogues for a century or more didn’t seem to enter into this thinking - and neither did 9/11.

A terrorist incident is changing how people shop for clothes online, because mandatory body scanning in some airports has made people think twice about privacy issues in digital body scanning.

According to Forrester Research, 89% of US clothes shopping still happens in physical stores, largely because people aren’t confident that 2D onscreen images will result in a perfect fit. However, free body scans in 70 US malls, and significant developments in scanning technology, now mean this isn’t necessarily so.

A company called Bodymetrics, for example, installed a body scanning booth in Bloomingdales last year, while a German company called Upcload, is offering home scanning using basic webcams and image processing technology. In the future, companies such as Amazon, eBay and Facebook really could know everything about you, including the size of your posterior.

If this concerns you, many companies using this technology assure us that all data collected is simply a list of several hundred thousand data points and never turned into an accurate, or even a visible, image of a specific individual.

Nevertheless, the possibility of cheap or even free smartphone apps allowing people to take photographs of other people without their consent - and then turning this into data to be posted online – cannot be dismissed in an age of cyber-bullying, including comments about body size and shape.

So what’s next? Expect the uptake of digital body scanning to rise significantly, especially if the service is offered for free or appears on popular websites. Also expect self-scanning technology to migrate to smartphones and other mobile devices and for the technology to be developed for shoes as well as clothes.

Finally, while scanning will create an increased demand for personalisation and mass customisation, do not expect it to remove the need for physical shops and shop assistants. After all, technology only tells someone whether something will fit them or not. It will not and cannot tell someone whether they look good in something or deduce personal preferences and quirks beyond a purely technical fit. (US spend on clothes and accessories online was $25 billion in the 12 months to June 2012, or14% of total ecommerce worth $173 billion.)

Is Burberry bonkers?

Analysts, as The Economist has pointed out, were recently fleeing Burberry’s stock faster than a group of supermodels running from a chip shop. The problem is partly that 12% of the company’s sales come from China, where retail growth is slowing, and the Chinese government has come down hard on people giving luxury goods as deal sweeteners (bribes).

However, Burberry’s overall strategy is the real concern. What is their strategy? By the time you read this it may have changed, along with several members of Burberry’s senior management but, at the moment of writing, there is considerable emphasis on using technology to spread the word about the brand.

As exuberant designers will tell you, Burberry’s flagship store in London has pioneered the use of giant in-store screens, together with garments and RFID tags that allow you to flash a product in front of a screen to see how the product is made or perhaps see it in context on a catwalk.

But critics argue this reliance of technology is making the store environment feel sterile and harsh compared to the deep pile luxury of, say, a Louis Vuitton store. The company’s own argument is that Burberry has to keep up with its customers, most of whom are clothed in the latest creations from Apple, HTC and Google, although the company also says that it aims to be cross-generational, appealing to young and old alike.

A Burberry project entitled Customer 360, for example, aims to allow shoppers to record their entire buying history, along with personal preferences and phobias (it is the fashion industry darling).

But two questions remain. First, how do you know in advance which gizmo or technology to chase and which to avoid? Keeping things fresh from an IT perspective could be very expensive and easy to get wrong. The world is – and some of their customers are - also ageing rapidly and those with the time and money are increasingly on the wrong side of 40 and size 8 and have quite different preferences and phobias.

Second, what about quietness and privacy? As more of the world goes online – and makes a huge amount of noise about it – is there not a good opportunity to create an oasis of retail calm? Some people argue that, digitally speaking, privacy is already dead, but while this may apply to a younger demographic intent on posting and tweeting what they are buying (right now!), it may apply much less to an older generation less concerned with outward display.

Having the world – or even your husband or wife – know exactly what you are buying isn’t always a good thing either.

The future of US shopping (malls)

In the US, there is a growing surplus of retail property. In a period of weak economic growth and the rise of e-tail, any retail property poorly located, badly designed or selling something that people can get faster, or cheaper, somewhere else, is increasingly in trouble.

This especially applies to the largest 1,300 enclosed malls in the US, which are neither desirable for tenants nor convenient to shop, especially when anchor tenants such as JC Penny and Sears move out. As an overall trend, the hollowing out of US malls appears destined for a long run, as does the relentless move of these malls downmarket, but the picture is uneven. In some areas where employment is high, such as the booming shale oil town of Williston, North Dakota, open-air malls are thriving.

The need for physical shops will not disappear altogether as people still like trying things on (see Body scanners offer perfect fit, this issue) and trying things out, especially in the company of friends. Shopping, in other words, will remain social despite the rise of the ‘social’ internet. Thus touchy-feely isn’t going anywhere, although the customer need for what is often poorly trained and badly paid shop assistants possibly is. Nowadays customers can find out about things for them themselves and don’t necessarily need sales assistance. As for checkouts and cash-registers these might disappear too, thanks to RFID tags, Near Field Communications, digital wallets and secure IDs.

This leaves the social aspects of shopping and especially, of shopping malls, which are vastly underrated. People do not purely go shopping to buy or even to look at things and a mall’s social role is important, not only in bringing individuals together but also gluing communities as a whole together. So, while JC Penny and Sears may be moving out, healthcare, religion and hospitality may be moving in.

Retailing goliaths face their Davids

Not so long ago, Procter & Gamble was a poster child of global business. Famously, 50% of its innovations started outside the company and P&G was well known for tapping into the very latest management thinking, especially that related to the new online economy. P&G’s nemesis, Unilever, was seen as a bit dowdy by comparison.

How things can change. The weak recovery in the US, where P&G is centred both physically and, many might argue, mentally, has hit P&G hard, as has the economic situation in Europe. P&G earns a disproportionate share of its revenues in these markets and as a result tends to price its products higher than its main rival, which makes it doubly vulnerable. Not to be outdone, P&G has nevertheless set itself a goal of adding 1 billion new customers by 2015.

Meanwhile, Unilever has announced it will seek to double its revenues by 2020. Both P&G and Unilever see the future as being focused on Asia and to some extent Africa. P&G, for example, sees developing markets as contributing 37% of sales in 2012, up from 23% in 2005. Unilever expects developing economies to contribute 70% of sales by 2020, with around 66% of this growth coming from general market expansion in these regions.

However, some commentators argue that P&G has underestimated not only the growth but also the strength of local rivals in these markets. Contrast this with Unilever, which, due to its long established connections in these developing regions, is often seen by locals as a local firm.

If the speed with which the big hotel chains are building in Africa is anything to go by, the retailing giants cannot afford to ignore Africa. (See Hotels for Africa, this issue.) There were 21 new retailing market entries in Africa in 2011, the most of any sub-region (especially Wal-Mart’s purchase of Massmart in South Africa). Most of the new retail in Africa was franchising.

According to Deloitte, the economic slowdown barely touched retailers based in Africa/Middle East and Asia/Pacific, excluding Japan. This was because of healthy middle class demand, relatively young populations and considerable foreign investment. This will only improve with a global recovery. Watch the big retailers growl.