The Annual May Design Series conference was held in London this month, attended by IORMA Luxury Director, Pandora Mather-Lees.
The three tier conference programme offered expert presentations on everything ranging from lighting design to bedding and focused on retail strategy. It took place amid a huge exhibition hall at Excel. The location is remote and the event was somewhat lacklustre compared to other design shows such as Chelsea Harbour Design Week and Clerkenwell Design Week, also happening in May. The exhibits were truly global however.
Jawdropping gilded, crystal-encrusted sanitary ware from China sat alongside plain, utilitarian tables and chairs from Poland, stone sinks from Lithuania, ingenious designs from Portugal and a range of both tasteful and extremely kitsch lighting designs from Europe and Asia. This show is primarily aimed at the trade including wholesalers and retailers although anyone can attend and there were a number of sessions for the retail sector. Emerging markets were heavily represented with no noticeable presence from the Americas, Scandinavia or Australia.
The space was also given up to some new design innovations and design awards winners plus a burgeoning home technology area.
Here IORMA reports on presentations on different aspects of the retail industry.
An important session for IORMA’s audience covered what Omni channel means for retail spaces. The rather obvious and well-trodden observation seemed to underpin the discussion: Silos have been surpassed by cross retail which was subsequently overtaken by ‘Omni’, a seamless ‘anytime, anywhere’ experience where suppliers of goods and services are embracing and focusing on the consumer by means of transition to digital and online. However the speakers did agree that these changes are only really happening right now with retail shifting to a landscape where, from a functional viewpoint, consumers don’t actually NEED to go to physical retail stores anymore if they don’t want to.
Eleanor Jukes, a property strategist at Legal & General Investment Management, runs a portfolio of property assets across Europe.
As a bricks and mortar company with £4.5bn retail and leisure assets, L&G needs to ensure that the entire retail experience of its tenants is a success. Speaking of retail in the UK, Eleanor suggested that our background as a nation of retailers together with other cultural factors (propensity to use credit cards and exploring shopping online) have made the UK the leader in online trade, especially in grocery retailing. Our use of online is much higher than in the US where it counts for only 1% of all retail. Added to these factors, our lifestyle of more leisure time and more office based working is driving Omni channel retail too.
She presented some google statistics which showed how searches online for ‘Pop up shop’, ‘3d printing’ and ‘street food’ increased from 2008-09 onwards. This actually translates to sales, in this case of rents in certain food markets in London and illustrates how the Omni concept evolves into the real world.
Publically available results from Deloitte show that Omni- strategy is driving growth. One example is British catalogue companies who have adapted to online. The growth of click and collect is another example; John Lewis cited 56% of its sales last Christmas as online.
The impact is reflected in high value goods too – purchases tend to be of higher value when the consumer is an Omni channel shopper as opposed to a one channel shopper.
On the negative side, there is now too much choice. One retailer was offering some 3000 different vests online making the buying experience is slow and tedious. The other disadvantage of using too much technology is that it also isolates those without the right skillsets whether buying or selling. One survey showed that only 10% of customers have confidence in retail staff to sell across different channels. Furthermore the economics of home deliveries being a loss leader was also a downside to Omni channel retailing.
Coming on to bricks and mortar alone, there is a firm belief that there will always be a place for a physical space although the predictions point to there being less of it in future. Expensive, regulation, up-front costs and cultural idiosyncrasies of the location, plus the need for scale all mean that bricks and mortar are not right for everyone. In fact Barclays’ recent research suggests there is a £2m turnover threshold above which a retailer is most likely to need and want a physical presence.
It was intriguing to hear more about the ingenuity of pure play and physical stores who partner to get the best of both worlds such as Ebay and Argos for collections for instance.
It was also interesting to see the landlords’ perspective in terms of how they use ‘big data’, Google search trends or plugs into shopping mall Wi-Fi to analyse movement and trends. There is an increasing requirement for flexible leases, the right tenant mix, sub-letting arrangements all leading to optimised sales performance for the retailer. L&G provide a tool kit for shopping centres analysing the most popular search terms, discount offers and other factors stimulating sales. They have even developed an app to publicise the centre with updates on opening times, news, traffic jams and free Wi-Fi.
What was particularly innovative was the openness to form retail ventures with others like Schroeders where in one location they are integrating the entire experience of a shopping mall. This is leading to one off payment systems and ‘pay as you exit’ at the car park and conveyor systems following the flow of visitors.
L&G predict the next phase in the future will mean the evolution of click and collect options perhaps with places to go to collect items, items being carried out to your boot, or to visit a changing room depot where you can try items on and send them back right there if they don’t fit. This could help to streamline the very tedious problem retailers face with returns. Equally fascinating was the idea of Uber being used to distribute goods across the country.
Pete Champion Director of I-AM Design consultants delivers optimum brand experiences for retailers with a goal to drive advocacy. This presentation was about blending human and digital experiences in-store and the continuing desire to visit shops because shopping is about excitement, inspiration and the human side of our characters.
To succeed, retailers and brands have to go back to the human factor by building emotional bonds. These only develop through powerful human experiences and unless you are in immersive gaming, you can only create a deeply embedded experience in the brain with the physical space.
Thus the trick is to come back to focus the customer and the output of their experience, not the input. It starts with standing on the street and continues as you cross the threshold. I-AM will often storyboard each tiny step in the customer journey so as to ensure the right impact.
Being truly ‘Omni’ is expensive but worth it; Omni customers spend 208% more per transaction than those just shopping in the store. Yet, the store can become an Omni experience as digital is brought ‘within’ as in the well documented case of Burberry. It can work for services too. In Douglas & Gordon estate agents there is interactive movement control on large screens and video walls with virtual walk-throughs of a property and the area it is located in. This means that prospective home owners can really experience a range of properties before choosing which ones to visit.
The store is now a Tardis! The physical space becomes limitless once you are through the door.
The Future of Bricks & Mortar
On another panel Andrew Bolitho of The British Retail Consortium chaired a session seeking to understand what is driving growth at a time when there over 1000 visits per second to UK retail websites, £333bn retail sales (2014) and where online represents 11% of all shopping. Visits to stores by device is increasing at 20% per year, M-commerce by 150% per year and F-commerce is presenting huge potential pioneered by ASOS. Nevertheless good retail space is still hard to find.
Some innovations were mentioned such as NFC short range communication being used in France to get prices by scanning a product with your mobile and calculating what you are spending as you shop: Lego a novelty where you show the box to your phone camera and get a 3D model springing up of what the product is like once put together, Burberry’s virtual fashion ‘try it on’ mirrors and then on the whacky side, NASA’s synthetic food printer currently developed for the Mars expedition!
Jonathan Chippindale, CEO of Holition works in the luxury sector and carried out the first digital installation for Louis Vuitton and has worked with Tag Heuer and De Beers. He cited frustration with the lack of many brands who felt digital too impersonal a channel to use. Equally many do not get it right and 80% of the tech in stores puts up a barrier. Marketers should rather start with a blank piece of paper and realise that the consumer does not have time to work out how to use the tech in a store in the same way they do with their mobile phone – i.e. over a period of time. It should work without the need for store ambassadors. It should be beautiful, as good as the analogue experience and tailor made to respond to the consumer as an individual. Above all, the technology and screens in store should not take over. A poignant analogy summed up this presentation – that of standing in front of a beautiful view looking a post card!
Finally, Trevor Hurley from the Future Laboratory picked up the use of digital in stores by showing some flagship store innovations pioneering ‘phygital’ combinations of ditigal and analog shopping experiences.
Apparently 67% of online shoppers still visit a store before or after a purchase and 95% of all shopping in the USA still happens with a physical presence.
Hunter flagship store propagating its branding codes – in this case the outdoors – now looks natural because of nature screens using sound which tell you what the weather is like outside.
Rebecca Minkoff’s New York store is adorned with screens and interactive mirrors allowing experimentation with trying on clothes while at the same time having interactive panels in the fitting room so as to order more sizes or colours, to order coffee, staff assistance and digital receipts.
No discussion on the future of bricks & mortar is complete without mention of i-Beacons and the ability to target customers the minute they walk into the store. You don’t have to engage with a sales person, but it should empower them to have more knowledge about you. How this works in a micro-environment remains to be seen, especially for retailers hoping to cut down on store staff and supplement them with digital alternatives.
Geo location apps mean that Virtual pop-up stores can be with you wherever you go, unlocking rewards, deals or discounts, the more you buy or interact with the brand.
Whilst all this is incredibly stimulating and impelling us to part with our money, is it too stimulating? Are our senses being dulled so that we need ever stronger stimulation for anything to have an effect? There is so much engagement these days that sensory enjoyment has changed and the extreme experience of autogenic vibes with an acid trip style laser experience in a spinning class was used as an example of how we are being over stimulated.
The physical experience of bricks & mortar is also being developed in new ways through biometrics. The use of panels has already been mentioned here and this can be taken a stage further to identify individuals through fingerprints to facilitate fast payment – indeed a seamless way to get you to part with your money – you don’t even have to take your credit card out! GeneU on London’s Bond Street now tailors skin products suited to the individual by taking samples of DNA and skin company IOMA goes one stage further by offering a pill to improve your skin rather than mere face creams.
This highlights the final key to future sales strategy; the development of predictive intelligence, joining various streams of data so that if the seller knows enough about you, offers can be matched exactly to your needs, at the right time, the right place and under the best conditions to encourage you to buy.
In conclusion some obvious but important points were left with the audience. Digital problems and real life problems are not necessarily being solved by tech; there are now 100,000 apps for improving our health but more people than ever are too fat. Shopping online is lonely and can be tedious - you still have to spend time rooting around. Think about why Google glass sales halted and be aware of technology for technology’s sake!