Retail in 2022 - Squarespace in 2022: 9 Trends Driving Retail ... From massive growth in DIY food gardening to retail trends such as Uniqlo’s : recycle bins becoming commonplace,

Retail in 2022: 9 Trends Driving Retail

[email protected] du Rand, Director at ieRetail LTD

JULY 2017

RETAIL IN 2022: 9 TRENDS DRIVING [email protected] | www.ieretail.co.nz

1 2 49 Trends Driving

Retail IntroductionTrend 1:

Living Ethically Trend 2:

Smart Living

6 8 10Trend 3: Loyalty

Trend 4: Education & Theatre in Store: Experience/m2

Trend 5: Beyond F2GO

and Convenience

12 14 16Trend 6:

Customer Analytics

Trend 7: Shelf Technology

Trend 8: AI and

Other Realities

18 20 21Trend 9:

DIY or DIFM? Just maybe

in 2022….The Retailers

Response

Contents

RETAIL IN 2022: 9 TRENDS DRIVING RETAIL 1

9 Trends Driving Retail Introduction

The rate at which consumer trends, in

store behaviour, store technologies and

retail presentation is accelerating, is quite

breathtaking.

Every day multiple new ideas emerge, many of which are here to stay. But for a great many others, however well intentioned and “on track”, they probably lack staying power and serious influence.

We have filtered these, to summarise the 9 trends we believe will go the distance.

We have also focused on bricks and mortar - the trends that will make stores attractive, thriving places visit, in the face of unrelenting online trade.

We’ve identified 9 retail trends to help you stay current in the retail market:

. Trend 1: Living Ethically

. Trend 2: Smart living

. Trend 3: Loyalty

. Trend 4: Education & Theatre in Store: Experience/m2

. Trend 5: Beyond F2GO and Convenience

. Trend 6: Customer Analytics

. Trend 7: Shelf Technology

. Trend 8: AI and Other Realities

. Trend 9: DIY or DIFM?

In the following pages we’ll go into more depth for each trend and it’s implications.

2 RETAIL IN 2022: 9 TRENDS DRIVING [email protected] | www.ieretail.co.nz

Trend 1: Living Ethically

IBM called “Health, wellness and wellbeing” the

next greatest trend to drive the planet”, and it

seems the proof is ubiquitous.

“Free from”, “made without”, NAFNAC, and similar motivations are shared everywhere, but ETHICAL widens to include individual motives of community and local support, as well as aspirations of being a good member of the ecosystem in which the brand or retailer participates.

From massive growth in DIY food gardening to retail trends such as Uniqlo’s recycle bins becoming commonplace, it seems if the brand, retailer or product cannot provide transparent proof of its ethics, it may be in for more than simple unwelcome scrutiny.

While products or ingredients and their source of origin are the first in line, it stands to reason that all ripple effects – from working conditions to employment practices – all will eventually be subject to customer scrutiny at some stage. Ethical Retail includes EVERYTHING.

Clean, micro brands, are beating some tainted, macro brands to the transparency

that shoppers are queuing up to understand and support.


What are the implications of

this trend?

Anything in the “closet”?

What do you do with waste?

How is your ecosystem better

off for you being a part of it?

How “clean” are your suppliers

and other partners?

What’s it like to work for you?

If you can answer these questions, you’re ready for the implications of

this trend.


Trend 2: Smart Living

– the IOT’s & automated consumption

The Internet of Things will turn a home into

a fully connected, auto-replenished and self

functioning zone, and turn the home owner

into an unconscious consumer, certainly at the

commoditized product level.

From Samsung’s All share control, to Amazon’s Alexa or Dash buttons. From Corning glass, to LG’s fully connected fridge; there are multiple retailers and suppliers all of whom have a vested interest in owning the path into the home, office and more.

Just perhaps, emotionless purchases will be automated, providing more time for emotionally-charged or experience-rich purchasing occasions. People will chose shopping occasions that are stimulating and experience rich, and leave chores to the whims of convenience, price or auto-order.



this trend?

What’s your role in a connected home?

How will the office, the school,

or the home communicate with you,

and you with them?

What’s your presence in the gateway

to these automated consumption

channels? Do you own it, rent it, surf it

or compete with or on it?


this trend.


Trend 3: Loyalty

Loyalty is not what it used to be, and the change

can just about be tracked in the changing length

of movie scenes.

Just as baby boomers were happy to watch 2 minute scenes in classics of yesteryear, (read Gone with the wind) they were also happy to dutifully collect points, dollars or stamps to trade for freebies.

Today, like the millisecond frames in modern day classics, (read The Jason Bourne series) we want instant gratification.

The best path to loyalty today is experience, at the one end, or price at the other. Aldi or Wholefoods? Amazon or Sephora? Price and convenience or pleasure and thrill?

Today loyalty is surround sound, provided in store in all 6 senses, and measured as experience/m2



this trend?

How do you track and measure

customer experience/m2?

Are you clear on who, and what,

you want to reward?

Loyalty will be based on experience,

but built with personalization.

How do you plan to deliver this?


this trend.


Trend 4: Education & Theatre in Store: Experience/m2

While traditional malls the world over are

struggling, and large stores make way for smaller

footprints, smart retailers realise the need to

completely overhaul the destination store, and

streamline the convenience occasion. Many do it

in breathtaking ways, others create completely

new experiences.

Experience/m2 is not a completely new measure.

- Ikea have always taken customers closer to their imagination.

- Story in Manhattan, sell stories

- Hartville Hardware build homes in store

- Samsung 837 and Nike use some stores to build brand through instore experience, like never before.

- Albert Heijn’s herb garden brings a new meaning to fresh

Recent innovations bring the experience alive in even more interesting detail, such as HEMA supermarkets in China where shopping is a blend of product and service.

Bricks and mortar stores will be a magnet for experience, education and theatre selling solutions, not simply product



this trend?

How many senses do your

stores engage?

Are you depending on product and

promotion, or experience and education

to bring your customer in?

On a blank slate, how would you

build a sensory active store, engaging

all your customers senses?


this trend.


Trend 5: Beyond F2GO and

Convenience

Amazon Go, Narrafour or Wheely’s 247 –

convenience is finding another level.

Paline’s Pizza ATM or Café X coffee, eating out of home is exploding globally and is estimated to be in excess of $50bn by 2021

More traditional supermarkets experiment with “food for now, food for later, or food for much later” as categories change shape and missions are driven by occasion and not product type.

Stores like HEMA supermarkets in China will become more common, setting a standard for shopping expectation



this trend?

Are you arranged by category

or by occasion?

Is this category part of you, or

are you part of this category?

Is your customer sick of the “milk at the

end of the store” inconvenience, and is

your footprint in need of a review?

Stores are becoming smaller – what does

your future “cosier” footprint look like?

What are your “pop in” categories and

are they easier to pop into (bricks and

mortar) and pop onto (web)?


this trend.


Trend 6: Customer Analytics

Data, and the insightful use of it, led Umpqua

Bank to radically revolutionize their bank, placing

themselves at the centre of their ecosystem, and

creating a community hub.

The question you have to debate is around what should take centre stage; the product on the shelf (in a world where anyone can put a product on a shelf), or the call for personalization based on trusted and invited knowledge-rich service?

IFTTT, like other personalized services, are turning data into knowledge, then insight, and then action, enhancing the relationship journey between retailer and customer

RETAIL IN 2022: 9 TRENDS DRIVING RETAIL


this trend?

How do your current LAG metrics such

as sales, profit or EBIT, (profit scores)

link with the LEAD metrics such as dwell

time, experience/m2, conversion rates,

feedback and return rates

(customer scores )?

In 2 years from now, will you be in a

position to personally tailor everything

from promotion, price, channel and

reward for your customer?

How will you hyper-personalize your

customers experience?

Do you only measure past metrics,

or do you also attempt to measure

the future metrics?


this trend.


Trend 7: Shelf Technology

The shelf used to be a place where you sold,

or simply merchandised, product – now it will

communicate directly with the customer and will

cease to be a stationery location.

Memory mirrors, in Uniqlo, Cosmetic stations in M&S, Instacent in Sephora, Eyehub in OPSM, or Niemann Marcus’s at your service apps…..there are already multiple examples of the “interactive shelf” in play.

In 2017 the concept store of the future, displayed at COOP, Italy, showed a vision of the interative shelf, that, while still a while away from the local store near you, shows grocery is far from immune to the shelf communicating, educating and interacting directly with the customer.



this trend?

What progress are you making on

conversational commerce at the shelf

(Whatsapp, Snapchat etc)?

How will you deal with the massive

demand for intelligent self service -

navigation, education, information

- at the POS?

Can your shelf provide live feedback

on stock levels, price elasticity, in stock

availability and other forms of inventory

management?

Are you ready for surge pricing in

food, or DIY, a la Uber?


this trend.


Trend 8: AI and Other Realities

In recent years retailers have begun some

interesting experiments with automated

assistants in store.

Lowe’s are trialing Lowebot, an in store robot enhancing the customer experience and providing another level of customer service, in multiple languages

Many non facing customer roles may vanish altogether - self checkout, auto checkout, remote checkout, replenishment, shelf stacking, auto home orders and inventory control and delivery potentially being 1st to go

The WEF expects that retail jobs could drop significantly, especially given the future of self driven trucks, auto delivery, logistics and drones

Algorithms will run much of what we do today, turning homes and offices into automated consumers of simple commodities, leaving the more emotional (read interesting and fun) purchases for us humans to do ourselves

VR and AR will allow shoppers to browse stores from anywhere, interact with brands and products at any time, and make buying decisions in any environment



this trend?

Which of your internal processes, will give

way to algorithms and technology next?

Which of your existing channels to market

will technology open, enhance or render

uncompetitive?

Will you control the experience your

customers have with your brand though

AI, VR or AR or will you leave that up to

chance?

Do you have a plan to deal with the cost

efficiency your competitors will have when

they automate non-front end roles (Check

out, shelf stack, delivery, etc)


this trend.


Trend 9: DIY or DIFM?

The game changers of the last 10 years (Amazon,

Zara, Netflix, Uber, Tesla, Yelp) made the

industries in which they play smarter and more

nimble. They also speeded up DIFM…..

Originally DIY, DIFM (do it for me) is how users interact with everything from Uber to My Food Bag, from Best Buys Geek Squads and Home Depots Red Beacon, to Woolworths new format stores in South Africa. Customers, the last generation particularly, manage services at the end of an app, and expect services to DIFM

At the other end of the scale, good, competitive DIY remains grounded in efficiency, and cost saving.

In grocery, one of the biggest game changers, just keeps doing what it has done for years. Aldi, and Lidl, continue to open more stores, deliver cheaper pricing and take share away from competitors, from the UK to Eastern Europe, from the US to Australia.

In simple terms, if the experience is a worthwhile in some way, the customer will DIY, If the experience is not, the customer may expect you to DIFM: example – “I’ll do the cooking, but you do the picking, packing and delivery”



this trend?

What in store services should complement

your in store product offer?

What’s the hardest thing about shopping

your store? And the most irritating?

And the most time consuming? If you know

this, you know what to DIFM.

How much can I do at the end of

an app in your business?

Will you be product driven,

or solution driven?


this trend.


Just maybe in 2022….

Health, wellness and wellbeing, the journey to a

relationship and technology, just some of the few

things that will drive retail in the future.

You’re not exempt from “Health, wellness and wellbeing” and it determines much of the your success in 2022.

The path to purchase has been abandoned in favour of a more intimate “ journey to a relationship” – being a contributing member of your ecosystem is essential

“At your service” technologies take big box services to small store conveniences. This blend of product and a related service extension blurs the traditional offer of “selling stuff”

You’re an integral part of the “Internet of Things”, and as a result your store takes product and service orders from “homes, offices and appliances” not just people…

Price will be (already is) a ticket to play only, and unless you are significantly less expensive it provides no competitive advantage

Your technology may be behind your customers – they will use more, do more, see more and become increasingly frustrated with traditional retails slow pace of delivery. Your tech costs a fortune – your customers is at the end of an app

Bricks and mortar will still be a thriving shopping experience – but only if you can take the customer one step closer to their imagination

Knowledge, Education and Theatre will be a driving force in retail stores, there is a higher expectation of staff expertise and knowledge

Game changers will continue to destroy inefficient and “grey” retailers or categories at an ever increasing pace (Zara, Uber, Air BNB, Netflix, Yelp, Amazon)

Organizational leanness and responsiveness will be a crucial attribute, enabling fast and smooth transitions in a very short space of time

The traditional promo models of, “x weeks on, x weeks off promotions” will be scrubbed in favour of profile and customer centric, personally tailored promotional activity.

Your relationship with your customer will mirror your relationship with the community and, indeed, the world at large

Heritage is key – stories are so much more interesting than products

Omni channel is the norm. Loyalty is more than a reward, it’s surround sound

To DIY or to DIFM - is a key question. The answer is in customer intelligence


The retailers response

A differentiated

offer

With market smarts

Delivered through

integrated channels

And an enhanced

experience

x x x

[email protected]

www.ieretail.com

ieRetail is a New Zealand based retail consultancy focusing on the manufacturer-retailer-consumer value chain. They deliver bespoke training,

design and deliver gamification and simulation based learning, and complete retail optimisation projects. Jean du Rand, founder and director, has worked with clients in the EU, UK, USA, Africa, Australia and at home, in New Zealand.

Documents

Retail in 2022 - Squarespace in 2022: 9 Trends Driving Retail ... From massive growth in DIY food gardening to retail trends such as Uniqlo’s : recycle bins becoming commonplace,