Sometimes in life it’s nice to wear a few hats! Well a few points on that before we ‘Reimagine Retail’ As the Founder of an executive recruitment firm we quickly grew as an advisory group to Businesses & Start Ups who aimed to grow fast and furiously or challenge the business of today to change and transform through technology and digital capabilities. Our Vision for Start Ups is to create successful Australian Technology & Digital Firms generating rapid business growth and creating fulfilling work cultures. Our Vision for recruitment and talent is to create successful teams by identifying ‘Gifted’, ‘Game’ & ‘Generous’ Teams. We are now not only helping Start Ups grow but formally advising Boards, forming Boards and taking on equity. So I wear a few Hats!
First, it is worth recognising why we need a few Hats. We need to own different roles and responsibilities in life, our professional life and our personal life and wearing different hats helps us accomplish, achieve and sometimes conquer! Point 2, it’s also nice to have a ‘wardrobe of hats’, different skills that are utilised for different occasions. To know you can put on an old hat and be an ‘old hat’ is comforting. Knowing your stuff, the skills we can put to good use year after year and know them like ‘an old hat’ solves problems swiftly. The final point is that it always feels amazing to shop for a new hat, a new occasion or a new look. Acquiring ‘new’ means it takes you out of your comfort zone, arms you with competitive advantage and keeps you relevant.
So how will our Aussie Retailers stay relevant? What hats will they wear? It is a question that is circulating widely. Boardroom Tables are now Kitchen Tables and the heads of many of Australian well known respected retailers and brands are planning the world we will return to as a customer a ‘new normal’ world.
McKinsey’s advice in their recent article ‘Adapting Customer Experience in the Time of Coronavirus’ suggests that Retailers will need to ‘Reimagine the Brick-and-Mortar Strategy’. The view is that ‘so far in the US the market capitalisation of physical retail space has fallen by more than 35 percent. When stores reopen, the world of brick and mortar may be fundamentally different. More and more customers will have grown comfortable with digital, remote, and low-touch options, even in rural and older populations. We expect to see the shuttering of underperforming stores. Retailers and consumer goods companies should plan now to capture this lost volume. Use mobile, online and geospatial data to optimize networks and omnichannel sales. Examine dynamics across digital channels, owned outlet stores, and wholesale partners. Companies should also re-examine the role that physical locations will play. Omnichannel fulfillment options such as buy online, pickup in store will increase.”
It will be an exciting time for those retailers that deliver a customer experience that will engage, evolve and possibly entertain us. With a greater bunch of tech savvy customers will we see a surge of retailers who will shift the instore shopping experience and really connect us and make us a Fan. As most Marketers know brands increase loyalty and retention, they create fans. And when brands create fans, they do the marketing for you. As a Board Director at Tutch, a digital software as a service sales platform and interactive self-service kiosks for retailers, I have been privy to the innovation journey some retailers have commenced. Stuart Harker, Chairman at AislePlus and the former Global Head of Retail and Consumer for PwC, is passionate about the solution which enable customers to search for products in-store or in a retailer’s or supplier’s warehouses, order online from an “endless aisle” and even complete transactions without staff assistance.
Our early successes have seen sales increase 120% and increase his range without physically holding the stock since the digital kiosks were introduced by key clients. With less stock retailers can shrink their footprint and reduce rent or keep stores the same size and offer a wider range and maximise returns per square metre. It also enables retailers to serve more people, consumers can start their next transaction on their own. It is that balance between digital and your store network. Being bold and brave and stepping out with a ‘new hat’ can be innovative and showcase to your customers you listen and you care. McKinsey profile that “some existing stores may shift toward experience hubs that offer services and encourage purchase across all channels. Consider Nike’s store in New York’s SoHo neighborhood. There customers, assisted by a personal coach, can try on shoes in various simulated sporting environments—including a basketball half-court, soccer trial field, and outdoor track—to determine their preferred product. As the forced isolation of coronavirus fades from view, this type of outlet may be a template that additional retailers will adopt”.
So how will our Australian retailers reimagine retail? How will brands reimagine retail? How will any business that has a ‘shop front’ reimagine the experience and the relationship they will have with their customer? How will retailers and brands join force as partners in experience hubs?
Plug and Play Ventures , a global technology accelerator and venture fund published their thinking in ‘The New Generation of Brick and Mortar Retail’ and state rightly so that “for decades, retailers and brands have expanded their footprint by opening large Brick & Mortar stores as a way to attract more customers. These “Big Box” Stores, characterized by massive footprint and large product selection, offered exactly what customers were looking for – a wide variety of choices and a space to spend time with other shoppers during long shopping trips.
However, the rise of e-commerce has significantly changed customers’ demands and expectations. With the ability to browse, select and purchase online, customers today have zero tolerance for chaotic stores, long waiting lines and overcrowded areas. The convenience, personalization, and ease of purchase offered by e-commerce has made the “Big Box” stores less attractive, often cumbersome in their layouts and more of a headache than a convenience. Furthermore, the continued rise of e-commerce has increased pressures for a major rethink of Brick & Mortar stores to better meet customers’ expectations today.
Customer’s rationale for visiting Brick & Mortar stores has changed and that is the main driving force behind the retail evolution and the repurposing of Brick & Mortar stores. customers expect experiences powered by the latest technology, a sense of community through different learning events organized in store and personalized assistance from the personnel who is more of a consultant than a sales assistance. Especially true for the fashion, automobile and electronics industry.
To better meet the ever-changing customers’ demands, brands and retailers are transforming their traditional one-size fits all Brick & Mortar stores into three main types: the flagship, the urban and the neighbourhood store, with different value propositions.
The Flagship Store offers the ultimate shopping experience by capturing all the dimensions of the retail experience which allows customers to have a new authentic immersive experience with the brand. The Urban Store is focused on the convenience and ease of purchase while helping the customer decide by narrowing the product offering to the most locally demanded items.
The Neighbourhood Store offers a limited selection of items and a drop-in – pick-up hub for customers that complete their purchase online. These stores are designed to serve different customer demands at various locations and segments of the purchasing journey.
Sort of sounds simple! Well as the apparel and fashion industry is in crisis mode and many retailers are dealing with the decisions of life after COVID-19 and are in combat mode, dealing with lower revenues, trying to navigate cashflows, staff and lease impacts excess stock and a looming recession the issues of today are very real.
Then comes Australian Fashion Retailers who are hurting more than most. Some of the current thinking outlined in the findings of an industry survey conducted by the Australian Fashion Council, summarised in Ragtrader, had 182 CEOs identify “a desire to nurture the demand for Australian designed, owned and made fashion products. Global consumer markets and retailers stand to provide new sales avenues for Australian fashion and there is great potential for the Government to support activities to increase the global awareness of Australian fashion brands as well as assisting in the creation of group opportunities at international fashion and trade events. From any crisis emerges a need to rethink current systems and create new business models.”
So will our market be different? Yes! Will our days out of isolation see communities flocking to have experiences again? Yes! Well we give the Execs the big bucks so they can make the big decisions and keep the troops motivated to innovate. Now more than ever is the time for Australian Retailers & Brands to solve the problems of the day and at the same time reimagine the customer experience. Execute strategies to grow the retail sector by differentiating and adopting technology that will recreate a vibrant connection with customers. What sets you apart now will probably make or break you.
In the words of the old Chinese proverb ‘when the winds of change blow, some people build walls and others build windmills’ I’m hoping we see true innovation with retailers and lots of windmills.