Feeling your way to next big thing in retailing

The way that people buy and shop is changing rapidly with three fast converging trends.

First, the need for greater convenience. Customers want to make their choices and complete their purchase quickly with the least amount of fuss.

In 2002. Metro with its Future Shop initiative started working on a number of futuristic trends which seemed rather revolutionary at the time. While their online shopping lists did not catch on, self-product scanning and check-outs are already common at many supermarkets in Europe. Buyers are warming up to the freedom and speed that this offers compared to tedious non-ending queues.

As we go forward retailers will not get their highs from seeing how many people are standing at their tills, but rather from how quickly and how many people have passed through their checkouts. At the same time the extensive use of RFID technology is providing unprecedented efficiencies in managing stocks and monitoring customer preferences, both of which will ultimately be reflected in enhanced customer experiences.

Experiential shoppin

The second trend is the growth of experiential shopping. Like in all other pursuits in life, retail has to compete with a plethora of competing stimuli bombarding the customer. As retail environments and customers’ habits evolve, just creating a beautiful looking store with aesthetic displays is no longer enough to engage customers before they walk out to the next store. Apple was one of the early movers with its counter-intuitive Apple Stores. Large clean looking tables had a few products sprinkled around and traditionalists wondered how this was going to be the next wave. But Apple has (just as it has done in so many other areas as well), changed the way that electronic and IT products are sold.

Customers sit and play with their future purchases, talk to knowledgeable sales advisors and end up building a relationship with the products and the company even before they have actually made a purchase.

Furniture companies are spending a lot of time creating inspirational rooms to transport customers into their future homes with even Ikea joining in. In our region, The One takes the engagement idea one step further with their store theatres, where products are on ‘show’.

Restaurants are conducting cooking demonstrations and dishing out recipes, and open kitchens in the heart of the eating area are becoming more and more common; fashion stores — like Abercrombie & Fitch — are boldly positioning their products with its bare-bodied models sprinkled around the shops (controversies notwithstanding, the target group is hooked!), Lululemon has yoga classes and community activities.

Locally, you don’t just pick up a teddy bear off the shelf, at Bear Factory, you actually put together your own, and Splash evokes a club-like atmosphere complete with DJ to get its customers moving.

Internet shopping

The third trend is the increase in Internet shopping. There have been so many confusing studies about the growth or non-growth of this particular channel. Some segments (such as travel, hospitality, books and electronics) may have grown faster than others, but there is no denying that this is already one of the important channels for buying.

What is increasing is the recognition by retailers of the need for online showcasing. The Internet is the major source of product and brand information for a growing number of customers.

While many do buy online many other customers buy only after they have seen and touched the product physically. This indicates a new multichannel architecture of retail where physical and online are integrated.

Even Carrefour, with its mass market approach with multi-sized stores, has its own online sales portal which is managed aggressively and is becoming an increasingly important part of their sales and information mix. Similarly, almost every large department store sees the need to have a strong online customer portal alongside their well-established physical stores.

These act simultaneously as information, marketing as well as sales portals, and many offer click and collect services where customers can buy online, but actually pick up the products from a high-street store. A recent study in the UK showed that 80 per cent of online customers had used click-and-collect in the last year.

The overload of information and competing attractions creates new challenges for retailers every day. The task is to cut through this, engage with customers and build up relationships that are strong and long lasting. Having a multichannel approach is going to be the way of the future.

Retailing has just became much more interesting.

— The writer is a retail consultant with Tridayle Consult FZE.