If you follow us on Twitter or LinkedIn you’ll know that we are always on the hunt for the best content – futures, retail innovation, consumer behaviour, FMCG, mobile devices, and of course the latest in market research.
We’d now like to introduce our new blog series, which brings together our top reads from different industry verticals every week. We’ve done the reading: here’s the distilled summary of what’s going on and why it matters for your business.
This week, retail and ecommerce. Technological advances are dramatically changing consumer behaviour and the retail landscape, from using phones to pay for goods in-store, to “showrooming” and third-spaces. The retail experience is evolving and the challenge of making in-store and online work effectively together is considerable.
Here we’ve chosen the top 5 articles we’ve read recently that are an essential for those who want to understand this current exciting time for retail.
1. Retailers must reinvent stores, says report
Business of Fashion, 27th January 2015
“Nonetheless, to remain competitive, legacy brands and retailers must do more to reinvent their stores to better suit the behaviours and expectations of today’s hyper-connected consumers, while leveraging their traditional advantages, argues a recent report by PSFK”
Opportunity: Up the personal interaction of the in-store experience. It’s not just about payment, but personalised recommendations too. The iPad becomes a crucial surface to give sales associates access to the same algorithmic recommendation engines that make the website feel so ‘relevant’ to the customer.
2. The ‘Alone Together’ Customer Experience Trend: From Starbucks To Hotel Design To Retail Banking
Micah Soloman, Forbes, 31st January 2015
“The Futures Company has dubbed this the “Latte and Laptop” customer: the guest, customer or traveler who craves a communal setting where, paradoxically, she can do private work.”
The previous article talked about personalising the store. This is the next stage evolution: turning it into a public space. The rise in flexible and freelance working means people are looking for ways to work outside the office, but still among other people. (Starbucks has embedded this into their brand with the idea of the ‘Third Place’.) The opportunity? Make your store a nice place to hang out, with tables and free wifi. This will drive footfall, opportunistic sales, and brand loyalty.
3. Watch your online spending – How a handful of purchases can reveal anonymous shopping habits
Adi Robertson, The Verge, 29th January 2015
“When the authors mapped locations, dates, and prices of someone’s non-anonymous purchases against the whole database, it was usually easy to find a single, unique pattern. With three points or more, it was virtually a certainty.”
Data matching certainly offers an opportunity to give customers targeted discounts and better recommendations, and drive sales. But retailers need to weigh this up against the risk of creeping their customers out. (How did you know I was pregnant?) User experience research is essential to identify which data-matching opportunities are worth pursuing – and we might find some retailers forgoing opportunities here in order to consolidate a position as solid, trustworthy, don’t-scare-the-horses brands.
4. The sharing economy goes next level. Introducing the “Airbnb sub-economy”
Jenny Miller, Fast Company, January 2015
“A new crop of businesses are here to handle everything from key handoff to guest laundry. Call them the “Airbnb sub-economy.”
Companies such as Airbnb and Uber are sometimes described as a ‘rentier’ or ‘parasite’ economic model: the hosts own the assets (houses, cars) and provide the actual service, whereas these companies profit simply from connecting buyers and sellers. We now have subsidiary service businesses built on top of parasites… Not sure we can see an opportunity in that, except it’s all getting very derivative and the clock’s just ticked a minute closer to the next economic crisis.
Opportunity? Don’t build a service business that’s totally dependent on a sharing economy start-up with dubious regulatory compliance! It’s low margin and high risk.
5. How to get Abercrombie & Fitch back on track
Katie Smith, Editd, January 2015.
“It has been argued that the brand’s consumer profile of collegiate, wealthy American is passé: some say this consumer is now too well informed and more diverse.”
Abercrombie and Fitch’s business model no longer fits the direction of the industry. Changing consumer attitudes have meant A&F now has major issues with its product, pricing and positioning. Katie Smith takes examples from parallel UK premium high street stores Jack Wills and Superdry to showcase that with the right strategy and positioning premium brands can still win big on the high street.
Opportunity: Think bigger – it’s not just about brand identiy, but culture and demographics. Brand identities cannot stay static: they have to update as consumer trends and demographics evolve. In Abercrombie’s case, key demographic trends would include the increasing ethnic diversity of young Americans and the changing college experience (the 4-year liberal arts degree is a tiny part of the whole). What cultural shifts in demographics, housing, transport, or employment might change your brand?
So that’s the lastest in retail and ecommerce, from Ed Hawes and Jess Owens. Join us next week for another five reads from another sector – suggestions welcome at @FaceResearch!
Or check out our case study on Retail, where we used our Social Panels to explore the possibilities in data matching for a major UK store.