Change your story
Many retailers are looking beyond not only bricks and mortar but also even the standard online shop. As online shopping matures, companies are investing more in technology and working harder to create destinations and strategies to meet their customers’ needs. One example of this is the UK luxury design label Burberry changing from showing fashion collections a season (i.e., Six months) ahead to current season, so as to, “significantly shorten the traditional gap between the runway show and retail availability.” The fashion industry has been grappling with this dilemma for some time; Burberry decided to take the leap.
These bold changes demand a both a fluid mindset from a brand and not being afraid to “pivot” (a word with which many in tech are familiar). Given the fast-paced nature of these exercises, it is critical to have a good team in place to execute changes swiftly. Executives are also finding the three-year plan is becoming obsolete given the impossible task predicting what the landscape will look like this far into the future. Shorter term sprints, (again, already commonplace in tech companies) are becoming a much more useful strategy.
Shift to the serviced lifestyle
Millennials are maturing, and are, as a generation, far more comfortable with rental and subscription arrangements than those that came before.
Their priorities lie with convenience and experience, and they have an increasingly ambiguous relationship with ownership. Rent the Runway is a US retailer where people can rent statement designer pieces for special events. They have also been experimenting with a new model where users pay a set monthly fee for access to three pieces at a time. Not only does this naturally build on their current software and core competencies, but it also meets a growing demand for flexibility, or “access without ownership”. Rent the Runway’s foray into subscriptions is also an excellent example of a retailer changing their story.
Another example of the serviced lifestyle is the uptick in automatic replenishment. Millennials and other time-poor individuals are embracing ways to outsource mundane aspects of their life. If Amazon Dash can predict and replenish their dog food, consumers are more than happy for them to do so.
With the improving technology around universal carts powering aggregator sites and social media still going strong, brands are already surrendering a great deal control in where their products are featured and sold, and this trend is only going to grow.
The positive (or at least less stressful) aspect of this is the ability for retailers to sell through more channels. Saks Fifth Avenue has far more online vs. in-store traffic. However, individuals shopping online missed out on the wealth of knowledge their sales associates brought to the in-store shopping experience. A new app called Salesfloor has closed this gap by giving online shoppers the ability to message associates. The rollout has been a success, with associates loving the new commission channel and online shoppers getting a better user experience.
Brands are also finding themselves competing with algorithm based retailers such as Thread and Trunk Club, destinations they didn’t have to worry about ten years ago. For now, these are very niche offerings. However, this is a space that would be risky to ignore.
As hundreds of millions of users turn to social messaging apps, brands are beginning to meet the consumer where they are “hanging out”. WGSN reports that the companies doing this most successfully at the moment are ones using a combination of bots (to handle to volume) and people (for when bots get stumped). Some, such as H&M are building bots for selling, and others like Sephora from a content and education angle.
Much like the millennial audience, 1% shoppers are becoming more drawn to experience (although in this case, the difference perhaps being not at the expense of ownership). Luxury retailers are responding by replacing their flagship stores with members or invite only palazzos and clubs, where customers can enjoy onsite pampering, food, and personal shopping. Domenica Vacca NYC is one such brand going this route, with the designer himself saying “At a certain point, I started asking what is the future of retail? The answer is experience.” Fendi has rolled out something similar in Rome.
Others, such as LA retailer Revolve with their new Revolve Social Club are following suit on a smaller scale. Perks involve invite only personal shopping and exclusive parties for their “dedicated customers made up of blogstars, tastemakers, and celebrities”. Sezanne Paris is another retailer bringing their online experience to life with L’Appartement. Despite not being high end, they have created a space where customers can shop, have a drink, and enjoy free Paris-area deliveries.
A 1% mentality can also translate through to data. Spotify created “Found them first”, to allow users who listened to artists before they “made it big” to share bragging rights. Data in undoubtedly an indispensable asset for any company, and using is to tell stories is just one other opportunity to put it to work.