The October Retail Round-Up

01/10/18

In our October round-up, we explore the future of retail and its impact on the modern shopper and the latest ways that brands are using experience to add value and drive footfall. We review the new and innovative technology that is changing the way we shop and how we live and evaluate the trends redefining the grocery sector this October.

Retail Trends

Redesigning the modern department store: What does the store of the future look like for the mid-range retailer? 

As mid-range, traditional department stores refine their estates, will an opportunity arise for a new modern retail format? Experience-led, luxury retailers such as Harrods and Selfridges are among the few department stores growing their market share; it has become clear that space for experience is crucial for a large store format to attract shoppers. However, practically and financially, experiential shopping cannot be the focus for a 400-store portfolio, instead, retailers should a select around 50 specific locations to champion experience and introduce high specification shop-fits. Smaller cities and towns should be offered simpler shop-fits that can be interchanged and adapted at a lower cost; emphasising click and collect, fitting room space and simplified purchase journey. Mike Ashley’s takeover of House of Fraser could be a stepping stone to turn around the fortunes of mid-market department stores, his ‘Harrods of the high street’ concept could be a resounding success if the offer, range and experience is right.

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Gender-neutral gains its own floor: Stockmann in Helsinki introduces a shop floor dedicated to gender-neutral ranges.

Stockmann, the largest department store in Finland, has introduced a gender-neutral shopping floor called One Way, home to unisex styles and collections from Acne Studios, Calvin Klein and Marimekko. The retailer aims to curate a selection of clothes that should work perfectly for all people, best fitting their shape and style instead of constraining customers’ choice by gender labels. This strategy aligns with shopper purchase behaviour movements towards choosing more liberally without bias. We can expect to see more shop space dictated by styles, brands and ranges, as opposed to gender, perhaps in the UK later this year.


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Experience

Image source: Retail Focus, 2018

More reasons to visit store: Debenhams open their first SWEAT! gym

Debenhams have now opened the doors to their first in-store fitness centre with gym specialist SWEAT!, as part of the department store's strategy to deliver ‘social shopping’ to their customers. The gym is designed to be group-orientated and performance driven, with state-of-the-art exercise equipment. SWEAT! will become the second experience-focused external partnership for Debenhams, alongside Blow LTD, who already offer beauty services within stores nationwide. Can Debenhams change their fortunes by introducing gym experiences that actually encourage more shoppers in store, increase dwell time and in turn drive sales? Or will shoppers continue to use the gym as a gym and the shop as a shop?

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You are what you eat: London welcomes its first dedicated Avocado bar 

Avobaris London’s first dining spot with a menu dedicated to serving Avocado in its various forms. The destination has alreadybeen dubbed a ‘must visit’ for health-conscious millennials, partly due to its on-trend food menu, but also thanks to its eclectic Instagram-able interiors. Instagram continues to heavily influence the food and drink industry, as consumers no longer choose a venue based on its ambience and quality of food alone, it has become just as important tofulfiltheir aesthetic requirements. Dining interiors and dish presentation are now an essential ingredient for the success of a venue. Will shoppers ever tire of choosing ‘style over substance’? Or willevery aspect of our lives change to cater to the Instagram generation?

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Image source: Nestle, 2018

Quality Street gets personal: John Lewis introduces build-your-own tins

Finally, your prayers have been answered. This Christmas there will be no fighting over the last ‘Purple One’, or settling for the strawberry delight. John Lewis have teamed up with Quality Street to offer customisable tins where shoppers can select their favourites. John Lewis’s Oxford Street store is even offering personalised tins. The trend for personalisation continues to gain momentum, particularly for gifting. The ‘pick your own’ concept creates an interactive experience, satisfying desire to self-select, whilst adding perceived value to a product. Personalisation, no matter how marginal, creates value, allowing brands to charge more; therefore expect to see personalised everything this Christmas.

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Technology

Image source: Design Week, 2018

Digital and analogue in harmony: Polaroid unveil analogue instant camera that connects to an app 

Polaroid Original have introduced a new analogue instant camera that allows the photographer to use a range of digital creative tools to edit and enhance imagery, through connection to a smartphone app. The technology creates a synthesis between analogue and digital, aiming to infuse some of the strengths of digital into the analogue experience and output. The camera has introduced new features such as remote trigger and self-timer; remote trigger includes a noise activation feature, where the phone microphone picks up sound to set off the Polaroid’s shutter. The concept plays on our nostalgia for capturing moments in a physical way and the imperfect nature of a Polaroid print is a stark contrast in today’s high-definition world. Polaroid's next task will be to engage shoppers in-store, creating a retail presence and encouraging trial of the new technology.

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Image source: Chain Storeage, 2018

Wegmans focus on technology: Improving shopper journeys for the blind 

Wegmans Food Markets in the USA have partnered with technology start-up Aira to provide a visual description service for blind and low-vision shoppers. The technology works through the Aira app on smartphones, where users can connect to a remote agent, who delivers store information on-demand, helping customers to find specific items, navigate the store and identify the shortest checkout queues. The technology uses a live camera stream, GPS, maps and information sourced from the web. Wegmans have used technology to physically transform the shopper journey in stores for blind and partially sighted customers, in a bid to provide superior customer service to all shoppers. If proved successful, we predict this type of technology will be quickly introduced to the UK grocery market, perhaps through premium retailers such as Waitrose.

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Image source: PSFK, 2018

Lights, camera, action: Brands focus on live-stream to drive sales

The modern shopper wants to shop wherever and whenever they want, at the click of a button: instant gratification. To meet this demand, brands are focusing their efforts on enabling live shoppable content, to build relationships and engagement whilst on the path to purchase. L’Oréal turned the Cannes Film Festival into a live shopping event for Chinese consumers, broadcasting footage of Chinese celebrities getting made-up, whilst displaying the L’Oréal products used on screen. Viewers could comment on the look and shop the products with one click. Find out how high profile events can provide an opportunity for brands to interact directly with consumers and amplify their reach through user-generated, live content.
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Image source: PSFK, 2018

AR enters the drinks market: How brands are extending their reach

Beverage brands are finding creative ways to engage with their shoppers in the post-purchase stage, to enhance their enjoyment and secure their repeat purchase. Augmented reality technology is being used by several brands to provide recipe suggestions or drinks pairings activated from bottle labels. Bombay Sapphire, alcoholic drinks brand, collaborated with the Shazam mobile app using AR to prompt exclusive video content, demonstrating a series of unique cocktails that can be made with their gin product. AR technology presents brands with an opportunity to give shoppers additional brand and product information, without the constraints of on-pack communications. 

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Shopper

Image source: The Guardian, 2018

Battle of the discounters: Tesco introduce Jack's to rival Aldi and Lidl 

Tesco have finally opened the doors to their new discount format called Jack’s, the superstore’s offering to rival Aldi and Lidl. Aldi and Lidl have made their success through providing shoppers with the products that they want, at a discount price, without sacrificing on quality, packaging or produce. Many shoppers no longer feel that they are ‘trading down’ when shopping at Aldi,instead they feel they are getting value for money; Aldi’s ‘specially selected’ range is particularly popular, providing alternatives for those wanting to 'trade up' whilst sticking to a budget. At first glance, Jack's appears to be an extension of the Tesco value and discount farm range, revamped with different discount-looking branding and packaging, that negates value instead of adding it. Until Jack’s establish their niche within the discount grocers, they will struggle to take shoppers from their German rivals.

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Discounts delivered: Aldi rolls out grocery delivery to stores across the US 

Aldi is expanding it's grocery delivery to stores across the US through partnering with Instacart delivery service, for the logistics. By the end of 2019 and the delivery rollout, 80% of Aldi stores in the USA will provide home delivery and many will offer curbside pickup options (click and collect groceries). If proved a success, no doubt a similar service will be trialled and rolled out in the UK and Europe. Adding home delivery to their tool belt will further close the gap between the services offered by discount retailers and the UK's big four grocers. A discounter offering home-delivery would certainly create disruption in the UK market, teaming convenience with pure value could create an offer that’s hard for UK shoppers to refuse.​

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