Global retail trends

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Context Architects’ Head of Retail and Interiors Murray Jervis has been reflecting on the latest global trends in retail this month, and shares his insights with us for how they will play out in the New Zealand market.

 

 The rise (and rise) of omni-channel retailing is well-documented.  Shoppers buy from any channel they want and cheap, quick delivery provides instant gratification. Larger retailers not offering this choice may struggle to compete.  Amazon Prime for example, now offer delivery in one-to-two hours in many major cities in the world.  While transport networks and population size may inhibit this here in NZ, it will be interesting to see which of our NZ retailers will be able to offer a version of this service.

Online shopping enables us to purchase limitless goods at low cost anytime from anywhere. The purchase is sometimes so frictionless, that we can even forget we ordered it until it turns up on our doorstep.  Because we can buy so easily, the act of the purchase can be less involved, less engaging and less rewarding; and can even create a lack of emotional connection to the goods we have just bought. Not feeling good about our purchases is not going to encourage repeat buying.

 

This is where bricks and mortar retail can fight back. 

 

Smart retailers create immersive experiences for emotional connection.  Take fitting rooms; previously small cubicles squeezed into dead corners, they are now becoming brand theatre pushed into the forefront of the experience. At Rebecca Minkoff in New York mirrors come to life on touch offering personalised product options.  At a finger swipe, staff bring additional colours and sizes, raising try-ons by up to 30%. The experience adds value and builds loyalty the on-line world can’t compete with.

Heat mapping could also be a game changer for NZ retailers.  This is a process where cameras track how people move through your store, where they dwell, where they linger. It enables you to arrange your store to suit the natural movement patterns of customers, to place the products you want to sell at the natural dwell point – like having a cheat code in gaming!

Innovations like these, and others like large digital screens that create impact and narrative, will enable retailers to connect more dramatically and deeply with customers. I predict in-store hospitality will flourish, that’s more bespoke and better tailored towards the brand’s characteristics and customers.

More expressive, unique concepts will find space, and our clients will become even braver as they seek to create white space between themselves and their competitors. We are working with more and more clients to strive to build a community within their offer, making consumers feel part of, and influencers in a developing story.

The role of the store is evolving by decreasing product density to allow flexibility and present hero and niche products.  Apple are already doing this with new concept stores in San Francisco and London, where much of the retail space is given over to community and brand building events.

In the next three years, Generation Z will be the dominant customer group worldwide.  Tim Greenhaugh of Fitch argues that they are “shoppers in a partial state of attention”, but in fact, they are fully-engaged in the hunt. They post, share and scrapbook items, broadcasting their experience. They are shoppers armed with knowledge and the know-how to use it, we shouldn’t overlook the power of the ‘share’ in NZ. If you can get customers using social media to share images of themselves in your store or in your product, with their mates, it’s a great way of giving you free connectivity to your wider target audience.

Amazon Go is a new concept from the web giant, now trialing a grocery supermarket with a twist. There is no check-out. You grab your goods and walk out!  Shoppers load an Amazon Go app onto their phone which tracks the goods you have selected and charges your account when you leave.  The tech eliminates much of the staffing costs and creates immediacy.  We can well apply this format here in NZ with our propensity for early tech adoption.

And finally, we’re going to be closely following the progress of brands such as TopShop, Zara, H+M and Dune in New Zealand, as the markets in the UK and Europe become more uncertain with Brexit and the Trump effect.  We may start to find more overseas brands forging a bridgehead both here and across the ditch as they look for more brand exposure and development opportunities.  This will be great news for Kiwi shoppers as it adds further choice and range into the market place.

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