In the first part of our Expert Outlook 2015 series we speak to Glynn Davis, Philippe de Mareilhac and Kate Nightingale about the future of shopping.
Glynn Davis is editor and founder of Retailinsider.com and writes about retail for The FT, Caterer & Hotelkeeper and Retail Bulletin. Glynn explains what the UK high street will look like in 2015
In 2015 we’ll see an even greater focus on the physical store. People are increasingly enjoying the experience of ‘going shopping’ – it’s a good antidote to our overload of digital interactions – plus retailers need to do something with their excess space. But, it’ll be crucial for digital to be integrated into the in-store experience. Free Wi-Fi is the most obvious way to go about this.
Sharing is going to be perhaps the most significant thing we’ll witness in 2015 is a growth in rental / borrowing / sharing services such as Rent the Runway, Uber, Airbnb and Zip Car. They successfully chime with people’s desire to live more mobile lives whilst avoiding the un-necessary accumulation of goods.
People are increasingly enjoying the experience of ‘going shopping’ – it’s a good antidote to our overload of digital interactions
This in mind, Rent the Runway is an exciting company to watch. Now it’s mastered the sharing model within the tough category of high-end clothing, it intends to broaden out into others. Anything for short-term usage could work: accessories, home-wares, furniture, barbecues etc. It’s largely a logistics exercise. They run a very tight ship with their clothing turnarounds and are the biggest dry cleaner of clothes in the US.
In fact, logistics on the whole is being revolutionised with things like one-hour deliveries. Given that multi-channel is being adopted by all demographics, and that mobile is the first point of interaction for many people, click and collect will continue to grow.
New firms such Postmates, Instacart and Uber are really shaking things up by owning the customer relationship, and gathering customer data. This should be a worry for retailers. As such, collecting relevant data will increase in importance; but of course there’s the risk of customer backlash.
Multi-channel is being adopted by all demographics, and click and collect will continue to grow
Home Retail Group (2014) ©
At the other end of the scale is Muddy Boots. Despite being a tiny business with only one shop, it has some interesting components. It is a hybrid operator, selling high quality meat products during the day and operating as a wine and charcuterie bar in the evenings. The late hours suit urbanites, and it’s vertically integrated set-up means the finished goods are produced on-site with the current kitchen set to supply a number of its future stores. There’s potential for a big roll-out as it has some wealthy private backers who are keen to build it into a large business.
Finally, tapping into start-ups, innovation labs and incubators, and getting digitally savvy people sat on their boards will be essential for retailers. Youngsters should be advising directors.
Philippe de Mareilhac is CEO of French agency MARKET VALUE. He began his career at Carrefour in South-East Asia before joining the strategy consulting firm AT Kearney. In September 2006, he joined Market Value as CEO, working for brands such as Carrefour, Marionnaud, Total and AXA. Philippe talks to Canvas8 about the future of Supermarkets
In 2015, two significant changes will occur in the world of supermarkets: there’ll be more services with a digital dimension, and innovation in fresh produce.
In terms of services, the growth of click and collect is important. When faced with a 48-hour (at least) wait time and delivery costs, a physical store and its stock can constitute a real competitive advantage over buying online.
Smartphone apps will continue to make shopping in-store faster and easier. You’ll be able to find out about additional promotions, locate products you don’t usually buy, see what’s in stock, get recipes, read customer reviews and choose the right check-out.
Supermarkets will develop their fresh offer with more niche categories such as Asian cooking and gourmet Italian. We’ll also see an increase in specialist areas such as in-store delis, mozzarella bars, burger counters, juice bars, and things like ready-made sushi and pizzas.
Apps will continue to make shopping in-store faster and easier. You’ll be able to find out about additional promotions, locate products you don’t usually buy, see what’s in stock, get recipes, read customer reviews and choose the right check-out
In order to entice people, the fresh areas are going to have to mix pleasure, inspiration and creativity in the same way TV cooking shows do. People want to spend less time on basic products (dry grocery) and more on fresh - which means combining pleasure and cooking. This will likely be achieved by making these parts of the store resemble markets and kitchens. So, in terms of architecture and decoration, the fresh area is the one set to change the most.
By developing more services and improving their fresh offering, the logical thing will be for supermarkets to expand into catering and in-store takeaways.
Furthermore, within fresh the focus will be on local produce. The local trend won’t just happen on a national level – British beef in the UK, French apples in France etc – it’ll be regional. Think Manchester supermarkets striving to stock fruit and veg from Lancashire and Cheshire.
Canadian company Loblaws stores offer specialist foods and many products are made on site
Landini Associates (2014) ©
Canadian company Loblaws is doing incredible work in terms of fresh food. The stores have lot of different corners offering specialist foods, many products are made on site, and the merchandising is great. The shop’s spirit is amazing and inspiring, too.
Carrefour will surprise us in 2015 as they’re looking to innovate again in Europe. Having already launched a new, premium format in Italy, they’re going to do the same in France. The former failure of Carrefour Planet will not happen again. They’ll take into account all the new trends in food retail to bring a brand new concept to the market.
Kate Nightingale is the founder of Style Psychology, a consultancy specialising in the science behind consumer behaviour within fashion, beauty and lifestyle. Kate explains how shoppers mindsets will change in 2015
Shoppers are becoming more independent-minded. They’re demanding more efficient and pleasant service, personalised search methods and unique products. Individualism will be very important in 2015, not only in products but also in experiences. Consumers will increasingly want to be a part of co-created experiences.
The popularisation of science, and an enhanced understanding of how the retail industry works, has enabled people to make more mindful, considered choices. In turn, people are better at articulating their wants and needs. The rise of entrepreneurism has made people realise that they can get amazing service and products without spending a lot of money. And they’re starting to demand the same from the retail giants.
The popularisation of science, and an enhanced understanding of how the retail industry works, has enabled people to make more mindful, considered choices
At the moment, media narratives are focusing on achieving dreams, and we’re seeing more programs aimed at helping people become more confident, and to perform better at work. This drive towards empowerment is not only affecting people’s personal and professional lives but their decisions as shoppers. Bolstered confidence sees them only buying products that they really like; they have no qualms returning things they’re not happy with or sharing their experiences on social media. Add this to the growing availability of 3D printers, and major retailers are going to have to try harder to convince people to shop with them not a smaller outlet or make stuff at home.
Retailers are slowly trying to catch up with ‘making it personal’. Shop Direct is planning on introducing personalised web pages; more flexible delivery and returns options will become the norm; even the possibility to personalise (Coke bottles) or completely design your own product (Upper Street Shoes) will be a thing, too. But given that physical stores aren’t designed to deliver a unique experience, there’s a long way to go to make the in-store shopping experience as personalised as it could be online. Even social media campaigns will need to become more interactive in order to move away from being nothing more than a monologue of promotional posts.
Will M&S improve its proposition and customer experience?
Marks & Spencer (2014) ©
To attract this new breed of empowered, informed and demanding consumer, retailers need be sure of who they are as a brand, of different demographics, and what type of relationship they’d like to have with each of their consumer groups.
For 2015, I’m excited about seeing shoppers seeking out local and small businesses for that unique piece of fashion or design. What will a typical shopping day out will look like: will they be shorter, longer and how much more ‘experience’ will be packed into these trips? I’m also looking forward to seeing how cleverly new in-store technology will be implemented. Will M&S improve its proposition and customer experience, and how will Mulberry change with Johnny Coca on board? It would be great to see Tesco go ‘back to basics’ and Sainsbury return to its former glory - but it's unlikely. And I’m definitely looking forward to less robot-like customer service. But I think we need more than a year for that!