The Retail Revolution … Rachelle Headland, Managing Director, Saatchi and Saatchi X, London
Today’s shopper may be more informed, empowered, sophisticated and demanding than ever before, but they are still driven by the same emotional needs they always have been. However, meeting those needs, engaging customers and securing the sale continues to present retailers with challenges. In the race to optimise retail business models in our new omnichannel world, retailers must not overlook either the practical or the emotional drivers behind shopping behaviour.
A string of UK high-street retailers that have entered administration over the past 18 months has shone a somewhat brutal light on the need for retailers to adapt and as a result, many are rushing to open up new sales and communication channels that make it easier, in theory, to buy their products and services. It is true that shoppers are increasingly using technology to simplify and de-clutter what has become an overwhelming level of choice, so reducing the store footprint is certainly a sensible move, but the store experience itself must also be looked at afresh.
For starters, the high street is not going to disappear, and whilst creating and developing new channels is crucial to continued sales growth, retailers must look forensically at the experience these are delivering alongside their stores. Shoppers are moving between channels seamlessly, without even considering what channel they are in, but with the expectation of a consistent, easy and personalised brand experience. To see online as simply about convenience and stores simply as product showrooms is to ignore the way people are shopping and, worse, will mean losing shoppers along the way.
The brand promise must permeate every channel in a holistic and meaningful way if it is to emotionally connect with shoppers and inspire loyalty. It is time to move beyond a transactional focus, to creating the ideal conditions for purchase behaviour and setting a standard by which shoppers can emotionally judge their shopping experiences. We believe the heart of shopping is where reason and emotion meet; the perfect environment to create what we like to call Lovemark™ brands. A brand that is simply known is one of many brands that a person might buy. It has to shout louder and work harder to ensure it is visible to shoppers. But when a brand achieves Lovemark™ status, they’re the only brand that a person wants. They are brands that are known for the same things that their shoppers care about. This creates loyalty beyond the rational barriers of pricing and availability.
So how do you achieve Lovemark™ status? If you started life as an online rather than an offline retailer, you have the advantage of taking a completely fresh approach to the store experience and the ability to adapt more quickly to changing shopper behaviour. These companies have been among the first to take advantage of the new ‘pop-up’ marketplace that aims to simplify the process of renting retail space, so it is as easy as booking a hotel room. New online marketplaces like AppearHere.co.uk, for instance, enable retailers, brands, entrepreneurs and artists to book short-term rentals of retail spaces that might otherwise be standing empty.
It’s worth taking a look at the big players also, who with heavy investment in bricks and mortar are being just as innovative and prudent with their strategies. B&Q parent company Kingfisher for instance recently announced that it would continue to invest in ecommerce while rightsizing its estate. B&Q opened 70 new stores last year in the UK, responding to shoppers rushing to improve their homes. Not to sell them quickly and make a profit as in the boom before the bust, but because our homes are now back to being longer term investments, where we are spending a lot more of our time. Our question would be, is this shopper insight also driving B&Q’s in-store experience as they look to test smaller formats, i.e. am I walking into a lifestyle space that inspires me to do more with my home?
Tesco’s acquisition of the restaurant chain Giraffe is another example of an ingenious plan to enhance a retail portfolio. The retail giant’s decision to open Giraffe restaurants in and near to Tesco stores to create ‘retail destinations’, places where shoppers will stay longer and spend more – is a great example of a way to strengthen the emotional connection between the shopper and the brand. The supermarket also recently bought a 49% stake in Harris and Hoole coffee shops. Whilst the move drew criticism from some, it has allowed Tesco to expand their business into the lucrative areas of leisure and dining out, and Harris and Hoole to expand its exciting business proposition despite a series of refusals from banks.
So let’s not dwell too much on the demise of some of the high street stalwarts that didn’t adapt quickly enough. We’re not losing the high street; it’s just changing – for the better. It’s putting mystery, sensuality and intimacy at the top of the agenda, creating retail experiences that are alluring, engaging and meaningful for shoppers. Price becomes value, and shoppers have emotionally connected with the brand, which means they’ll be coming back.
The store is dead. Long live the store.