CREATING A RETAIL ECOSYSTEM FIT FOR FUTURE SHOPPERS:

HOW BRANDS AND RETAILERS ARE TAPPING INTO SHIFTING CONSUMER EXPECTATIONS BY EMBRACING THE NEXT WAVE OF DISRUPTION, INNOVATION AND GAME-CHANGING TECHNOLOGYTerna Jibo, Head of Strategic Insights, Portland Design

November 29th, 2016

AT PORTLAND, WE DESIGN ‘FUTURE PROOFED’ SHOPPING. WE SEEK

INSPIRATION IN TRENDS; WE IMAGINE THE IMPACTS OF INNOVATIONS AND OUR SOLUTIONS ARE GUIDED BY INFORMED

INTUITION. WE BRING INNOVATION FROM THE BREADTH AND DEPTH OF

OUR EXPERIENCE OF WORKING ACROSS CATEGORIES AND CONTINENTS.

Platforms

PlacesPlaces – We investigate the factors that influence people’s shopping destinations and retail environment preferences

Platforms – We probe the multiple digital and physical touchpoints consumers use to connect with brands and retailers

People

Products

People – We dig deeper to understand consumer and

shopper attitudes, motivations, behaviours and future

expectations

Products – We research the factors affecting consumers’

product choices, decision-making and purchase

behaviour

“WE ARE LIVING IN A SUPER VUCA WORLD - VOLATILE, UNCERTAIN,

COMPLEX & AMBIGUOUS.”

TODAY’S CONSUMERS ARE DEMANDING CONVENIENCE, VALUE AND AN

AMAZING EXPERIENCE, AND IT IS THESE THREE KEY TRENDS THAT ARE

DRIVING DISRUPTION TO EXISTING MARKETS AND BUSINESS MODELS ON

AN UNPRECEDENTED SCALE.

KPMG

BY 2020, GENERATION Z, TODAY’S 14-19-YEAR-OLDS WILL BE THE LARGEST

GROUP OF CONSUMERS WORLDWIDE, MAKING UP 40% OF THE US, EUROPE

AND BRIC COUNTRIES, AND 10% IN THE REST OF THE WORLD — AND BY THEN, THEY WILL CONSTITUTE THE LARGEST GROUP OF CONSUMERS WORLDWIDE.

PWC

GEN Z IS POST-MILLENNIAL TEENAGERS WHO HAVE GROWN UP WITH FUNDAMENTALLY DIFFERENT

VALUES, ATTITUDES AND CONSUMER BEHAVIOURS.

POLITICALLY, SOCIALLY, TECHNOLOGICALLY, AND ECONOMICALLY, WE ARE MOVING AT WARP SPEED. THESE CHANGES HAVE CREATED A GENERATION

VERY DIFFERENT THAN ANY KNOWN BEFORE. RETAILERS, AND IN FACT ALL

BUSINESSES, HOPING TO CONNECT WITH THESE SAVVY CONSUMERS NEED TO UNDERSTAND WHO THEY ARE, WHAT THEY WANT, AND HOW THEY WANT IT.

ERNST & YOUNG

THEY LIVE IN THE MOMENT, BUT WITH AN EYE TOWARD THE FUTURE: 63% OF

GEN Z TEENS ARE WORRIED ABOUT THE FUTURE.

Sparks & Honey

GEN Z IS TWICE AS LIKELY TO SHOP ON A MOBILE DEVICE THAN

MILLENNIALS.

POPSUGAR

72% OF GEN Z AND 78% OF MILLENNIALS WOULD RATHER PAY MONEY FOR AN EXPERIENCE OVER

A PRODUCT.

EVENTBRITE & YPULSE

IN THE PAST, TEENAGERS USED FASHION BRANDS AS A KIND OF SOCIAL SIGNAL.

GENERATION Z, HOWEVER, IS MORE SELF-ASSURED. THE PERCENTAGE OF ADOLESCENTS WHO AGREED

WITH THE STATEMENT, “I CARE A LOT ABOUT WHETHER MY CLOTHES ARE

IN STYLE,” DROPPED FROM 65% IN 1997 TO 47% IN 2014.

TRU YOUTH MONITOR.

FROM 2005 TO SPRING 2016, OF THE TOTAL AMOUNT SPENT BY TEENAGERS

ON KEY FASHION CATEGORIES OF CLOTHING, ACCESSORIES,

AND FOOTWEAR HAS FALLEN FROM 45% TO 38%.

PIPER JAFFRAY

RETAILERS AND BRANDS HAVE MUCH TO GAIN FROM UNDERSTANDING THESE

FUTURE SHOPPERS. BY LEARNING ABOUT WHAT DRIVES THEM NOW, WE

CAN BEGIN TO PREDICT NOT ONLY HOW THEY WILL BEHAVE IN THE FUTURE BUT

ALSO HOW TO BE READY TO ENGAGE THEM WHEN WE GET THERE, TOO.

“IF TIME IS THE ULTIMATE LUXURY AND PEOPLE WANT A HIGHER ROI

OF THEIR TIME, YOU NEED TO GIVE THEM A REASON TO BE

IN A PHYSICAL SPACE.”

Rachel Shechtman, Story

RE-IMAGINING THE RETAIL EXPERIENCE FOR A DIGITAL WORLD

IN THE FUTURE, THE WINNERS WILL BE THE RETAILERS AND BRANDS

WHO CAN IDENTIFY AND UNDERSTAND GEN Z’S NEEDS, AND ALIGN BOTH THEIR

DIGITAL AND IN-STORE EXPERIENCE WITH THEIR BEHAVIOURS.

BenchmarksPERSONALISED LOYALTY SCHEMESPersonalised loyalty schemes acknowledging personal tastes, preferences and evolving behaviours are creating far stronger brand-consumer dialogues than generic incentives.

GAP+ APPGlobal

FRISKA APPUK

ANTOVA SOFTWAREUK

BenchmarksCHATBOT COMMERCE

AI-powered messaging tools, including chatbots, are amplifying brands’ capacity to accommodate high volumes of bespoke search queries online.

THE NORTH FACE PERSONAL SHOPPERGlobal

SEPHORA X KIKGlobal

MACY’S ON CALL APPUSA

BenchmarksSMART-TECH SERVICEOmni-smart, concierge-style devices are helping to identify those consumers in-store and provide more relevant and satisfying service.

ALDO CONNECTED STORENY, USA

TRUE RELIGION SMART WATCHLondon, UK

REVOLVE CLOTHINGLA, USA

BenchmarksCONNECTED FITTING ROOMSChanging-room tech aren’t only bringing the choice, speed and convenience of e-tail into the store environment; they’re also amplifying the enjoyment of the brand experience.

SHOPWITHME RFID MIRRORVarious, USA

POLO RALPH LAURENNY, USA

RIBY & PELLERLondon, UK

BenchmarksPHYSI-VIRTUAL STORESSmart stores that bridge physical and digital will allow consumers to seamlessly shop across all the channels where they spend their time.

SEPHORA FLASHParis, France

THE LINE – SHOPPABLE VRNY, USA

BLOOMINGDALES X SNAPCHATNY, USA

BenchmarksCUSTOMISATION BARSShrewd fashion brands are investing in new modes of customisation, both on and offline, tapping into co-creation and immersive experiences.

CONVERSE BLANK CANVASNY, USA

LEVI’S CUSTOM LASER BARNY, USA

RALPH LAUREN CUSTOM BARLondon, UK

BenchmarksDELIVERY INNOVATIONSClick & Collect points combined with slick apps will provide smoother and more convenient delivery experiences for shoppers.

DROPIT APPLondon, UK

DODDLE CLICK & COLLECTVarious, UK

SELFRIDGES DRIVE-THROUGHLondon, UK

BenchmarksIMMERSIVE POP-UPSSmart brands are using pop-ups as tech-engaged hubs able to trade dynamically on the excitement of flash trends and fleeting moments.

BenchmarksIMMERSIVE POP-UPSSmart brands are using pop-ups as tech-engaged hubs able to trade dynamically on the excitement of flash trends and fleeting moments.

NIKE SNKRS ZOOM CITYNY, USANIKE SNKRS ZOOM CITYNY, USA

SEPHORA COLLECTION POP-UPNY, USASEPHORA COLLECTION POP-UPNY, USA

SHOPWITHMEVarious, USASHOPWITHMEVarious, USA

BenchmarksSHARING THE PROCESSCourting consumers’ desire for greater visibility around the processes behind brands, store designs that fully disclose the brand’s in workings, are increasingly useful.

EVERLANE TRANSPARENCY TOURSSan Francisco, USA

JIGSAW FLAGSHIPLondon, UK

INES DE LA FRESSANGEParis, France

BenchmarksSOCIAL MEDIA SELLSocial media has long been an inspiration platform, but the wider integration of ways to buy instantly in-app will mark a key turning point in e-commerce.

SHOPSTYLE X SNAPCHATUSA

SHOPBOP X INSTAGRAMGlobal

BURBERRY X PINTERESTGlobal

HOW CAN RETAILERS AND BRANDS EMBRACE THE NEXT WAVE OF DISRUPTION, INNOVATION AND

GAME-CHANGING TECHNOLOGY TO CREATE A RETAIL ECOSYSTEM FIT

FOR FUTURE SHOPPERS?

Mobile devices

IoT platforms

Location detection technologies

Advanced human-machine interfaces

Authentication & fraud detection

3D printingSmart sensors

Big data analytics and advanced algorithms

Multilevel customer interaction and customer profiling

Augmented reality/wearables

Cloud computing

Industry4.0

Data & Analytics as core capability

Data & Analytics as core capability

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RETAILING IN THE DIGITAL AGE DOESN’T MEAN INTRODUCING “DIGITAL”

TO THE PHYSICAL SPACE. INSTEAD, IT MEANS REDEFINING YOUR

ENTIRE BUSINESS AROUND OPERATING IN A DIGITAL WORLD.

SapientNitro, 2016

IN-STORE INNOVATION & ‘RETAILTAINMENT’

BRANDS AND RETAILERS WILL NEED TO DELIVER RETAIL THEATRE AND ULTRA-

IMMERSIVE EXPERIENCE-BASED EVENTS THAT SHOWCASE PRODUCTS AND

HIGHLIGHTS THE CREATIVE PROCESS.

AUGMENTING THE BRAND STORY

EXPERIENTIAL BRAND TEMPLES, INNOVATION LABS AND INTERACTIVE PRODUCT

SHOWROOMS AUGMENT THE BRAND EXPERIENCE TO BECOME MORE INNOVATIVE,

EXCITING AND RELEVANT.

TOTAL CHANNEL CONVERGENCE

THE CONVERGENCE OF PHYSICAL AND DIGITAL CHANNELS PROVIDES AN

INTEGRATED, MEANINGFUL AND ENHANCED CUSTOMER SHOPPING EXPERIENCE ACROSS

ALL TOUCHPOINTS.

PERSONAL, INTIMATE & DYNAMIC CONNECTIONS

INNOVATIVE DIGITAL PLATFORMS DELIVER HYPER-PERSONALISED PRODUCT RECOMMENDATIONS, OFFERS, SERVICES,

PRICING, COLLECTION & DELIVERY.

IN-THE-MOMENT PERSONALISATION

SEAMLESS, INTEGRATED, MULTI-CHANNEL RETAIL SHOPPING EXPERIENCES ARE

DELIVERED THROUGH CONTEXT-AWARE TECHNOLOGY AND REAL-TIME CUSTOMER

DATA ANALYTICS.

A HUB OF INTERACTIVE EXPERIENCES

STORES ARE RE-IMAGINED TO BECOME A HUB OF INTERACTIVE, IMMERSIVE EXPERIENCES THAT CAPTURES THE

EMOTIONS OF THE BRAND AND ENHANCES CONSUMER INTERACTION.

PORTLAND OMNI-EXPERIENCE WHEEL

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RETAILING IN AN ALWAYS – CONNECTED WORLD

• Next-generation retailers must enable customers to interact and engage with their business seamlessly across whatever channel and device they want to.

• It’s not about physical stores versus online; it’s about creating and integrated retail ecosystem and Omni-channel strategy.

• Empower retail staff to deliver a smarter service, improve the customer experience and, ultimately, increase sales.

• Seize the opportunities to disrupt, innovate and integrate technology to meet the needs of future customers and to future-proof your brand.

• Deliver a personalised experience for the customer that gives them added value and generates loyalty.

THANK YOU

Terna JiboHead of Strategic InsightsPortland DesignStrategic Insights Unitterna@portland-design.comwww.portland-design.com@Jibosan@PortlandDesign