Post-digital Retail

When it comes to experiential retail, is the needle about to swing to the other side of the dial?  Are shoppers more interested in stripped down, authentic minimalism rather than digital distraction?  Is less the new more?  Cate Trotter thinks it might be.

The final presentation at Retail Tomorrow 2018 succeeding in leaving the great and the good movers and shakers of the retail industry with something very interesting to mull over on their journeys home and – I’d wager – over the weeks and months to come.

Cate Trotter is Head of Trends at retail consultancy Insider Trends.  She self-deprecatingly refers to herself as “the 26th most influential person in retail” but you’d to be hard put to imagine that there are 25 more engaging and delightful thinkers or presenters out there.  I think the phrase “the enthusiasm is contagious” may have been invented for Cate.

She walks the talk when it comes to ‘experiential’ and ‘bespoke’ – you don’t get anything off-the-shelf or second-hand with Cate, and when I asked her to deliver our final keynote on experiential retail I knew she’d bring all her very latest experience to bear for a presentation tailored especially for the event and for the audience, which she did.  (Bless her.)

The experiential imperative

Cate introduced her talk by recounting how, recently in NYC for NRF, she’d heard about a few new stores people had suggested she visit – which she did, and was surprised by what they had in common.

The new Glossier showroom in a converted penthouse in Lower Manhattan was a great example of a store providing an experiential instore environment which was a bona fide word-of-mouth hit.  Glossier started life as an online fashion and beauty blog, which rapidly earned its way to two million online visitors a month.   With a loyal and thoughtful following who were actively seeking out the ‘new thing’, Glossier knew they were well-placed to consult their followers about what products they’d want to see; the response showed an overwhelming focus on skincare, which convinced Glossier that there was a gap in the market here.  The rest, as they say, is history, and they now have a thriving online business.  The brand feel is very stripped down and natural, and the store reflected this. Nevertheless, Cate was interested to note that a brand which was “born digital” and had earned a rep for innovation didn’t actually need huge amounts of technology in its store – in fact had almost none on display.

This same decidedly ‘low-tech’ feel was mirrored by two other new stores Cate visited – OutdoorVoices which is in Cate’s words “taking over the fitness apparel world” but doesn’t look high tech, and Supreme – there are only six of these low-tech stores around the world right now, but they have a market valuation (if I heard right) of $1bn.

So why was Cate seeing these low-tech spaces, what did people like about them – and how can large retailers do this at scale?  Whether it’s a trend for right now or the shape of the retail future remains to be seen, but Cate’s hypothesis is that we’re seeing what she has termed “Post-digital retail”.  Cate sees Post-digital retail comprising three important elements above all: Relationship – Ecosystem – Experiences.

Relationship

The grounds are well and truly shifting in retail, and a lot of this is due to the ‘democratising’ nature of technology.  Technology is becoming democratised to the point where, Kate mused, theoretically any one of us could open an OpenDesk (“A new type of furniture company”) type operation next week.  Businesses that were manufacturers are becoming retailers and running their own successful Direct-to-Consumer (D2C) operations.  Conversely, retailers are becoming manufacturers; Cate gave the example of fashion retailers taking design briefs from companies and ‘knitting them instore’.  Media companies (who need to embrace new income streams as traditional advertising revenues decline) are becoming retailers – GQ and Vogue have launched online stores.  Look around and everything is in flux – Net A Porter has its own very popular magazine while a high-profile magazine (Marie Claire) has opened a physical store.

Now that everything is blending (as the examples above prove), what’s the most important thing? The customer relationship. Once you have the relationship in place it serves as the nexus for all sorts of other things and a myriad of touchpoints go around it.

Milk Group are a strong example of what having strong and trusted relationships can bring.  It started out 20 years ago as a studio space, from that went to fashion catwalk spaces, from that to digital magazines, from that to digital and events agency, from that to MilkMakeup beauty products.

Different companies will build relationships in different ways.  Cate cited the Everlane fashion group’s ethos of “radical transparency” proving a huge hit with customers.  This is a brand absolutely 100% predicated on trust, that its garments are ethically-sourced and its global supply chain a happy, fairly-paid one.

Startups have some obvious advantages here (freshness, agility, goodwill) but big brands have advantages in different ways: key to this is leveraging the existing relationship, plenty of data to use, and bigger budgets.  Cate gave the example of Under Armour being very adept are gaining insight from their digital sites including fitness sites and apps.

Ecosystem

(I’m very fond of Cate’s way of working, which is to gently re-inforce her hypotheses through accumulation of evidence, to offer more and more case studies and examples.  Her slides were something to behold, they made you want to visit every store or try every app she mentioned.)  When looking at the importance of a retail brands ecosystem she gave four main examples:

Sprucebot – the first every “guest experience bot” identifies customers as they come instore and lets store associates know some small facts about customer to greet them with.  It also enables “handshake checkout

Vita Mojo, London.  This is a healthy food café with a difference, which lets customers choose which ingredients and the exact quantity of each that go into their lunch.

DNAFit – send them a swab from your mouth and they will let you know what you should and probably shouldn’t be eating (ie you need more of Vitamins C and D)

OneMarket by Westfield – This is a broad and ambitious initiative that is doing many things, one of which is to re-imagine how mall space can be used and what a ‘shopping event’ can look like.  It’s significant because it proves that ‘giant’ retail brands like Westfield are actively thinking about more of what they can offer retailers, aside from renting them space and bringing some shoppers.  In other words, they are attending to their ecosystem in a way which supports the retailers in their malls but also extends their personal relationships with shoppers, and if not ‘future-proofing’ operations then at least showing appetite to innovate.

Experiences

In order to make experiences better for customers, retailers need to make a conscious decision about what they want to happen in each moment.  For example, answering the question: how fast or how slow?  Cate points out that in post-digital retail there is definitely a space for “slow retail” where shoppers are generous with their time, but expect a qualitatively different, personalised experience.  But there’s still very much a place for fast retail, and this ‘seamless/frictionless’ retail is what a lot of digital innovation is predicated on.

Bodega in the US brings retail closer to the customer: the customer downloads an app, gets a code to “open the box” (a Bodega box can be situated anywhere, for example in the lobby of your office building – it looks like a big display case).  Customers can take from it whatever they want and will be charged accordingly.  The box can then self-optimise to work out what its shoppers want most – in other words, the shoppers where each individual box is located.

SAIA by 3DLook allows customers to generate a “3D model” of their body which means they can nail whether they are a size 10 or a size 12 for example.  Retailers like this – it means fewer returns.

MM LaFleur in the US produce workwear for women and is a good example of a blended high tech/low-tech space.  They will ‘stock’ a fitting room for you, so that you can walk straight into the store and into your own hand-picked room.

Post-digital retail – coming to stores near you

There are countless ways for retailers to improve the customer relationship, variously hi-tech and low-tech.  But retailers must remember that things like AI, robotics and digital displays are tools and not the end product.  In Cate’s words, “Sometimes you have to decide whether you want to make something frictionless or you want to make it fascinating.”

‘Post-digital retail’ is about retail where the technology is so sophisticated it essentially disappears.  In order to use this creatively, and to generate the creative ideas that make a business model or engagement campaign fly, Cate suggests that “retailers need to stop thinking like retailers and start thinking like tech companies.”

Now there’s something to think about.