Retail Week Live 2013: The Future is Flip Flops!
Perhaps I should first clear up the reference to flip flops; it came during a great session with Scott Weavers-Wright as he was describing his experience when visiting the Google offices recently. It was an entirely new and unique culture where flip flops are commonplace and as we all know it’s an amazing business.
But clearly Retail Week Live was much more than that, in fact it was 2 invaluable days of hearing from great speakers giving their opinion, insights and revealing some of their plans at a time when the retail industry is experiencing seismic change. Also, not just the amount of change but the sheer pace of change is quite frankly mindboggling. And this is set to not only continue but accelerate. 10 years ago did we even think in our wildest dreams that something such as Google Glass would be around in our lifetimes? And yet it’s here now, not just in the lab but fully working and operational. The limits are more than ever only bound by our imagination and the way that technology is now enabling a completely new way of running our lives and crucially the way we wish to engage with retailers, is having a profound effect on how retail is being shaped.
No longer the parent child relationship between a retailer and their customers, now the relationship has shifted to an entirely different paradigm; one where consumers are able to make choices and engage with their preferred brands in ways which were unheard of only a few years ago.
So how has this shift occurred and what are the likely trends which are emerging which will go a long way to shaping our lives in the future? Retail Week Live didn’t disappoint.
From CEO’s and Directors of retailers such as Asda, Dixons, Argos, ASOS, QVC, Oasis, House of Fraser, M&S, John Lewis we heard how not only the High Street but the entire retail landscape is changing and in a way none of us could ever have imagined. And whilst some key themes emerged it is equally true to say that no-one really knows what the High Street will look like in 5 years time let alone 10.
Perhaps the single most significant development which is shaping all of this is something which now over 35% of us carry in our pockets and is predicted to grow to over 60% by 2016: the smartphone. In the UK alone at the end of 2012 there were 83 million mobile subscriptions of which 36 million were for smartphones. By the end of 2014 it is anticipated that the coverage of 4G will reach 98% of the UK population making wi-fi speeds the norm. At the end of 2012 nearly 40% of internet access by device type was via a smartphone (as opposed to desktop, laptop, tablet etc) So what does all this mean for both the retailer and the consumer? Some of the answers lie in the way in which retailers are going to have to engage with their customers.
First we coined the phrase multi-channel, then a few years ago we began referring to it as omni-channel and now hyper-channel but now more than ever we should simply think of it as one (multi various) engagement with the customer. John Lewis predict that their online business will be a £1bn business by 2015 and that 35% of those transactions will be click and collect. This trend is mirrored across all retailers and is a consequence of one of the key trends along with mobility: convenient.
Everything now has to be convenient; we need our interactions and our engagement with our favourite brands to be convenient (to us) and we need our purchasing cycle from click / visit to fit in with the way we prefer to lead our lives. This is a very significant challenge for many retailers and represents a huge shift in the way that they need to engage and communicate with their customers. Brand loyalty is ephemeral and to understand this and the way that customers behave is to unlock one of the secrets to retail success in this digitised age. And one of the characteristics of this is click and collect. This, coupled with mobility is having a huge influence; the only barrier now being the strength of the fulfilment proposition. It is this phenomena which, together with showrooming, is having one of the biggest impacts on the High Street.
Whereas before, the standard transaction would have either been conducted offline in store or online via such as Amazon where the product is searched online, found & ordered for delivery to home within a pre-determined timescale, consumers now are wanting much more from their experience. Which brings me to the 3rd pillar of trends from Retail Week Live: customer experience. This is perhaps the most influential trend which is appearing and challenging the traditional retail model.
As consumers we are all demanding far more whether it be online or in-store. We want our favoured brands – those who we decide deserve a share of our (hard earned) wallet to engage and communicate with us in ways which suit our lifestyles. No longer do we accept what is pushed to us, instead we control much of the buying behaviour and coupled with this we demand that our favoured brands interact and engage with us on our terms. We want personalisation, we want convenient but above all we want to feel that by endorsing a brand we have made the right decision and that peer recognition will therefore follow. And to the most interesting dimension in all of this: the store estate. How are retailers now considering their stores and what role do they see them having in the future? Well, rather than an inexorable decline as online becomes ever more ubiquitous, in many ways the reverse is true.
Consumers want a total, holistic, personalised experience and this is where the store and therefore the in-store experience determines levels of customer loyalty to that particular brand. The effects of this on the demands placed on store colleagues is only now just beginning to be felt. Research shows that a customer is 10 times more likely to purchase from a store colleague they have come into contact with 3 times or more. Online browsing and research combined with subsequent great shop assisted sales appears to be the key to unlocking omni-channel retail success.