The future of retail
In this article, EOG Head of Retail Peter Ottervanger, looks at the longer term future of retail and urges a focus on adapting to key changing trends alongside immediate post-COVID actions.
Why is the future so important, now that we are only just slowly getting out of the COVID-19 crisis and the focus is fully on restarting and energising immediate business?
The answer is simple and can be found in ever changing consumer behaviours. As I mentioned in my previous blog, the COVID-19 outbreak has led to a digital leap forward – indeed a digital sprint- impacting consumers’ day to day digital lives, evolving the ways in which they acquire faster, more detailed knowledge, and changing how they shop.
We need to be visionary and predict consumer behaviour, and many trend watchers and researches are looking into a crystal ball. Woody Allen once stated that the future is the place where we all want to be…. However, the reality of today is that the future is now.
These can be confusing times – over the years, so many retail strategies emphasised the need for experiential shopping, but now we are seeing a new reality with ‘hit and run’ shopping. But trends continue to change quickly, and you have to proactively create your own place in this world. Henry Ford once stated: “If I had asked people what they wanted, they would have said faster horses.”
It is critical to think outside the box and find your own organisational capabilities to be more innovative. Be critical about these capabilities, and realize that young people have fewer boundaries and can come up with new solutions, something we lose out a bit when growing older.
Of course, retail is not the only industry that is changing. Think about the many people who are now used to working from home – Twitter CEO Jack Dorsey, in a paradigm-shifting, COVID-19-inspired move, informed his employees that they can continue working from home “forever’’.
Facebook’s Mark Zuckerberg expects that 50% of his staff will be working from home within next couple of years. Many other companies – tech and non-tech – have redefined office space to a multi-useable purpose place to meet and interact with colleagues. Day to day work is happening more from home offices than ever – a new reality has been born.
Retail need to be redefined to align with the trend that most of the world’s population is living in urban environments, while travelling to outdoor spaces, being socially active, and visiting shopping streets for inspirational food and shopping experiences. While a significant part of revenue is now coming from digital channels, the need for brick and mortar stores as social meeting places will undoubtedly be strong.
Given the decline of footfall, retailers should review their store portfolio and take some measurements:
Concept and design
Start to define your purpose and create your own unique angle in the world – don’t forget consumers are looking for green choices, but ‘greenwashing’ is not an option. Rewrite the concept to move towards the new reality, leading to an emotional experience, creating a place to visit, be inspired by, buy within, and remember to return to.
Considering downsizing in m2, simply by the fact that revenue is coming from other channels and pressurising productivity of m2 and its overall profit contribution.
Think long and hard about what brand offering is needed. The world around us is cluttered with a sea of sameness, leading to increased competition and unwanted pressure on margins. Conscious choices in overall product density in the store, the offering on brand/product portfolio, and category choices, should create unique experiences based on the store’s purpose and character.
Service as key factor
Offer a seamless interaction with other digital channel, delivering a unique serviced based experiential shopping experience.
At the EOG, we have expertise in house to deliver strategic support.
For more information, please contact us directly you can reach me on firstname.lastname@example.org or +31 642079169.