What trends are developing in modern retail? During the Retail Business Russia forum, Angela Ramsey, an analyst at WGSN, spoke about at least three areas of trade development that cannot be ignored if you want a long life for your business.
Generation Y Power
In the next few years, global retail will fully feel the influence of at least three trends. The first of these, conventionally called "culture shock" by WGSN experts, is the growing purchasing power of millennials. Millennials or "Generation Y" are people born between 1980 and 2000 who take the intense development of technology and the environment for granted. This generation has its own special values: they strive to make the world a better place to live and enjoy their opportunity to contribute to its improvement. Millennials are sensitive to the opinions of others, they enjoy being a part of society and having a wide circle of acquaintances. These people grew up during a period of active market development, so they are not surprised by the wide range of products, they do not attach much importance to the country of origin and brand. All that is important for them in the buying process is emotions, the ability to influence the course of the sale or the product itself, as well as the maximum proximity of the brand to human values.
According to DeLloyd's estimates, in 10-15 years, about 75% of the world's workforce will be made up of people of generation Y. They will become the main buyers that set the tone for the whole retail, so underestimating them, or - even worse - ignoring their needs, is strategically dangerous for any business ... Brands that understand this are already adding millennial elements to their concept. For example, the online glasses store Warby Parker sends the customer not 1 or even 2, but at least 5 pairs of glasses to choose from. The brand has made caring for customers its principle, and since it was founded by two young people from the same generation Y, Warby Parker also strives to make the world a better place: after buying each pair of glasses, the second pair goes to charity. The same trick, by the way, is used by the shoe brand Tom's, which produces Peruvian-style slippers and sends every other pair as a gift to children with foot diseases.
The American online clothing store Nasty Gal builds a business around things dear to the heart of every millennial: the store maintains several blogs on all social networks, including Tumblr and Pinterest, communicates with customers as members of one large family, and even keeps a funny dog in the office, with whom the visitor can take a picture for Instagram. In a word, the brand builds communication in such a way that buyers do not feel “on the other side of the barricades” and know that at any moment they can become part of Nasty Gal in one form or another.
Another great example of how a clothing store finds contact with Generation Y is the online ModCloth retro-style clothing, shoe, and accessory store. Its main feature is that all clothing is approved by customers before purchase. There is a Be Buyer section in the store where visitors can evaluate every item that ModCloth buyers have their eye on. As a result, things that do not gain votes are not purchased at all, and those that have passed the approval and were purchased are marked on the sale with the mark “Customer Choice”. In addition, ModCloth allows you to write comments under each article, create lists of desired things and notifies customers about when a thing they especially like will come. All this allows ModCloth visitors to feel heard, valuable and necessary, and this is mutual: in just a couple of years, the store has turned from a small site for retro-clothing lovers into a leading American online retailer.
Not only retailers have found an approach to Generation Y. Auxiliary services have appeared in the world that successfully rely on the values of millennials. This, in particular, is about the Needle Internet portal, which has built its concept around the voluntary assistance of buyers to each other in choosing a product. The creators of Needle noticed that each brand has “fans” who know all the features of the products and are ready to advise other customers about particular models. Needle attracted several clothing brands and equipment manufacturers to the project, found “fans” of these companies and taught them the features of working with the portal. “Fans” advise buyers coming to the portal, helping them make the best choice, taking into account the needs of each client. The project quickly became popular among potential and actual buyers, as many representatives of Generation Y tend to help each other in one way or another, but in the Needle project they also receive certain benefits for their enthusiasm.
The desire of generation Y to be constantly in touch is also used by payment systems. The Chirpify service allows Twitter and Facebook users to respond to a unique brand offer by simply writing #Buy in their post: Chirpify catches this tag and automatically leads the user to the purchase page. And under the Square brand, the first bank card readers appeared, which connect to the phone, tablet or laptop via a USB connector and save the online shopper from the tedious manual entry of all the data on the card.
So, we can say that the core values of the new generation - the desire to be heard and to change the world for the better - can be used by all companies, one way or another connected with retail. Moreover, they should understand that generation Y is represented in all countries of the world, and Russia is no exception. Timely change of format, taking into account the interests of millennials, will allow the company not to be left overboard in 5-10 years, when technological effectiveness will be the norm even for small cities.
The second trend, which is increasingly gaining popularity in modern retail, is a mixture of virtual and real space. The desire for physical stores on the Internet has long been the norm. However, the desire of online retailers to be presented in reality in at least some form is still an unusual phenomenon. For example, a Chinese supermarket has developed an application for a tablet or smartphone that uses the device’s camera and “builds” a store on the screen surrounded by the real landscape. This emerging trend is called the “third space” (third space) but so far it is presented only in the form of such exceptions.
A much more common phenomenon is the elements of the virtual environment in physical stores. Macy's store in New York has equipped Coach's retail space with wall-mounted displays that display all of the brand's handbags. In Benetton stores, the same panels display pictures on color themes that the brand collects on the social network Pinterest. This network, where users can store and share images found on the Internet, is also used by the Nordstrom clothing brand. In his company stores, models are highlighted that most often become the object of exchange and storage on Pinterest.
Perhaps the most interesting example of the introduction of virtual reality in physical retail is denim seller Hointer, whose store is located in Seattle, USA. In it, customers are invited to download a specially designed Hointer application to their smartphone, which scans the labels of goods in the store. The buyer selects one or more jeans models on hangers, scans the barcode using the application and makes an “order” of the desired model size. After that, the application informs in which fitting room the customer will find his order, and when the buyer enters the booth, the selected pair of jeans will drop out of the window in the wall onto the stand. Obviously, the main advantage of the system is the absence of employees who control the fitting, and the reduction of space for the presentation of goods in the hall.
The third trend in which WGSN analysts see the future of retail is the maximum individualization of goods. This is not about the notorious and no longer working concept of “our product will satisfy every taste”, but about the actual creation and promotion of goods, taking into account the needs of each buyer.
The most famous example is the Australian shoe company Shoes of Prey, which offers customers to create their dream shoes in the Internet designer and order their production. The project has existed for about two years, and during this time it has earned about 2 million dollars in revenue. Its success has spawned, if not followers, then a revival of the popularity of workshops offering simple and quick custom-made shoes, clothes or accessories.
However, exclusivity can apply not only to the product itself, but also to other elements. In particular, the Bonobos men's clothing and footwear store in New York provided its sellers with access to the purchase history of each customer, data on his preferences and sizes. This made the service even more personal and quality. The Quicksilver brand has tested a “personal price” system in one of its stores in South Africa: customers who have installed the brand's application on their smartphone can receive a special price for the goods they like. All they have to do is scan the price tag using the app. In addition, the price will decrease even more if the buyer creates a post on the social network about the thing he likes. It is not difficult for the client, because it is enough just to select the desired option in the application, but for the brand it is, though not free, but very cheap promotion.
Companies do not forget about encouraging regular customers. The Facedeals project introduced a video camera that compares the faces of incoming people with a Facebook database and remembers the most frequent visitors. Coming once again to a restaurant or a store, a person simply receives a message on the phone that Facedeals recognized him and greets him at the store. The message should be shown to the seller or the bartender, and then the buyer will receive a bonus from the establishment - a discount, a free drink or other promotion.
Not related to clothes or shoes, but still a fun example of personalization is the Tokyo chocolate shop Fab Cafe. An 3D scanner is installed in it, which takes the faces of visitors who want to get a chocolate bar in the form of a small copy of their head. The ball with the exact face of the buyer fits in the palm of your hand, but costs 60 dollars, which, however, does not deter buyers.
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