Thoughts on–Digital in RetailAlastair Kean, Group Development Director

In the second of our quarterly thought pieces we look at the opportunities presented by digital in retail.

As an agency we travel, observe, listen, create and experiment, defining brands and designing them. We look at new trends and assess what consumers are reacting to today. Our brief is to interpret these insights for our clients and create relevant experiences.

We’re always keen to talk. Please get in touch if you’d like to discuss any of these thoughts further, we’d love to hear from you. Contact Alastair Kean: a.kean@dalziel-pow.com or +44 (0)20 7837 7117

Thoughts on– Digital in Retail © Dalziel and Pow 2013

Is digital the future of retail?The short answer, we believe, is no. There is no escaping the digital revolution that is now well under way – and which goes far beyond retail. It’s a cultural shift that goes deeper and faster than any we have experienced before. It affects us all, pulling older generations along and pushing a new generation into a thrilling future. We need to be awake to the opportunities – and equally aware of the pitfalls.

To suggest that the future of retail is digital is to miss the point. Digital is a tool. It’s a technology, a methodology. It’s a means to an end – not an end in itself. The future of retail is not ‘digital’, any more than the future of literature is the word processor. We’re in a new place with new rules, new parameters and, naturally, a new customer.

A retail renaissance is upon us: brands like ASOS in fashion, Facebook in social connectivity, eBay in marketplace and Amazon in its business model are all pointing the way. However, Drapers’ Multichannel Report September 2013 found that 68% of consumers still prefer to make purchases in store.

Thoughts on– Digital in Retail © Dalziel and Pow 2013

The new customerTechnology, with all the knowledge and convenience it brings, has altered our expectations forever. The new customer has a new attitude. There has to be a bond between customer and brand: one that offers rich social, commercial and cultural rewards for both. The new customer shops everywhere: in bed, at work, watching TV. They are informed and opinionated, and not shy about sharing their views. They are empowered. Shopping has become personal – ‘me-tail’ has the edge on retail.

Open Label, for example, is an app that attaches crowd-sourced information to product barcodes, allowing consumers to instantly discover and share reasons to buy – or avoid – a product. To quote Open Label, “Together, we’re about to disrupt that nature of commerce itself, and usher in a new era of consumer empowerment and corporate transparency.” theopenlabel.com

Selling alone will never reach this super-connected customer. The new customer needs to hear compelling stories that resonate with them. The brands that can talk in the customer’s language will win new friends and advocates – a genuine, natural and seamless conversation with customers across all media.

Ten tips: 1: Go mobileIn the words of Google CEO Eric Schmidt, “If you don’t have a mobile strategy, you don’t have a future strategy.” By 2014, more people will use the web on mobile devices than desktop computers. You can bet they will be using it in your stores. What are you doing to capitalise on that?

2: Be socialNo brand can afford to be out of the conversation. Listen hard, and talk to your customers in a voice they can trust. Engage, connect, advise, share, offer – even gossip. Social media is the new forum for your brand’s reputation.

Thoughts on– Digital in Retail © Dalziel and Pow 2013

The new customer is curious: always on the lookout for something new and unique. To make the most of this opportunity, brands must think imaginatively. Those who know best how to harness creativity will be the ones who cut through the fog of information. They will be the ones who forge ahead: leading, anticipating, establishing themselves as the brands to be followed. Look at Topshop’s collaboration with Google+ at London Fashion Week, enabling customers to ‘Be the Model’, and create content to share with friends. The strongest brands will be the ones that connect at the deepest level with customers and their communities: the brands that resonate culturally. on.mash.to/Ysi2qT

The valueof trust

Creativityis critical

Google+ and Topshop, London. Image courtesy of Google.

Today’s customer demands honesty and transparency; they want to know a product’s provenance. In the online world word spreads quickly, good or bad, and brands can fall from grace almost instantaneously. Customer trust can no longer be assumed – even by the most established brands. It has to be earned every day.

The ultimate exponent of this new transparency is Honest By. Launched in January 2012, this is a company with a unique ethos of openness in its supply chain, where honesty drives everything it does – sourcing, pricing and material choices – laying it bare for consumer scrutiny. www.honestby.com

When a customer trusts your brand, they will feel free to share the new and exciting discoveries your brand offers with their friends on social media. Just as they share their personal thoughts and updates, they will also spread news of your brand – happily, without hesitation, instantly and widely.

Thoughts on– Digital in Retail © Dalziel and Pow 2013

Customers and collaborators

Threadless at Gap. Image courtesy of Nikia Jefferson www.chitownfashionista.com

Not only do customers want unique products, they also want to be part of the creative process. ‘Co-creation’, or ‘pretail’, where brands open up their platforms to let customers create personalised products, is a powerful and growing trend. By allowing customers into the design process, brands can build deep and lasting relationships. This is about more than just building products – this is about creating communities, trust and loyalty.

Such collaboration has only become possible to this extent because of the internet. We see it everywhere now. The American fashion design site Constrvct allows users to design and produce their own fashion designs from a range of available silhouettes and share them with others to inspire new creations. This fashion eco-system allows consumers to put their bespoke designs into production, also allowing garments they have created to be bought by their friends. blog.constrvct.com

Elsewhere, crowd-sourced t-shirt company Threadless has collaborated with Gap to get a number of its products into stores. Both brands benefit: Gap gains a certain kudos while Threadless enjoys invaluable visibility. These symbiotic relationships are typical of the endless collaborations now possible.

3: Come out and playGet creative to cut through thenoise and offer an experiencepeople will love and engage with.Make them want to play – andplay again. Today, stores areabout entertainment – personalfulfilment, not product fulfilment.

4: Context is kingUse the intelligence of digital to contextualise what you offer: by location – show women’s product as your customer enters the womenswear department; by time – ramp up music in busy periods... Even if you’re just acknowledging the weather outside, make it relevant and reactive.

Thoughts on– Digital in Retail © Dalziel and Pow 2013

Retail re-imagined If the new customer is shopping anywhere, anytime, is ‘going to the shops’ a thing of the past? There’s nothing more engaging than a physical experience that triggers all the senses. Online shopping, with all its convenience, can never replace that, but shopping in stores does need to continue to evolve. Retailers must re-imagine themselves to stay relevant.

The challenge is to transform ‘stockrooms’ into ‘showrooms’. New retail spaces need to combine the virtual and the physical to create places where we can play, learn, socialise and be entertained. New York’s This Is Story is a champion in the sphere: a store re-imagined as a magazine, with themes and products changing every four to six weeks. thisisstory.com

In this re-imagined world, shopping will be seamless. Spaces will be boldly different from the stores of today. More than ever we’re designing that ‘one brand space’, the world occupied by a brand, more than just a shop.

‘Most pinned’ Pinterest tags at Nordstrom. Image courtesy of Nordstrom, Inc.

5. Be one brandPeople buy products, not channels. Wherever customers encounter you – online or on the high street – you need to offer ‘one brand space’. The brand is what matters, not the medium.

6: Why your store?These days we can shop in bed. It takes a pretty powerful experience to beat that. How is your environment? Is it fun, playful, dramatic – worth getting out of bed for?

Thoughts on– Digital in Retail © Dalziel and Pow 2013

It’s important to be open to change, but it’s just as important to filter the digital noise, to stay calm in the frantic storm of buzzwords and chatter. Retailers must be alert to new cultures and new customers, but see through the passing fads. Good retail has always been about forecasting trends, and that will endure. Quality retailers rise above marketing gimmickry, and stay true to their heritage and principles.

We’ve learned this here at Dalziel and Pow, working with John Lewis – one of the UK’s oldest and most successful retailers. We helped develop their Exeter store, transforming it into a state-of-the-art digitally-enabled retail space with capabilities beyond its small local scale. Over 40 touchscreens put online purchasing at the heart of each department. This worked well, but already the focus has shifted: later stores have fewer touchscreens but much stronger in-store wi-fi. The explosion in smartphones will make all that hardware less relevant, less necessary. The lesson is to constantly review your approach – in this rapidly changing world you need to be agile to survive.

Staying agile to survive

7: Think localWhether it’s digital enabling you to survive on a reduced footprint that brings you closer to the customer, or NFC connecting when customers walk past, local is the new connectivity.

8: Boardroom balanceThere are no such things as silos any more. You need digital expertise integrated and advocated from the top down, or you will be left behind.In a recent article in Retail Week, M&S Head of Digital Laura Wade-Gery says, “Without champions for digital investment at the highest level, the boardrooms of multichannel retailers may not be sufficiently digitally literate.”

Thoughts on– Digital in Retail © Dalziel and Pow 2013

Retail still rules

Act like a start-up‘Legacy retailers’ will recognise the issues, and understand the difficulties they can create. But while they may have the knowledge, these established retailers often lack the uninhibited bravado of the younger market players.

The market is full of retailers who don’t take the threats of digital seriously. They leave the way clear for early adopters of new technologies, methodologies and techniques to elbow their way in. Faster than ever, the new kid on the block can become the big competitor next door.

Retail is changing, without a doubt. Digital is not the future in itself, but its effects will continue to create waves in the traditional marketplace. The key is to have a flexible and integrated approach. You need to consider every element, and be ready for the future’s challenges. You need to be fit for the fight and ready to fail fast!

9: Keep it simpleDoes it work? Is it easy? That is what customers ask, so you must ask it too. Digital can be complicated – if you make your brand difficult to understand, you’ll lose people fast.

10: What’s the big idea?What makes your brand specialand different? Clarify what it isin your culture and values thatmakes you unique, desirable andmemorable – and put that at theheart of your brand.

Retail principles have always guided the world of commerce. That’s unlikely to change, regardless of the evolving technological landscape. It’s still about connecting people and products, offering the right product at the right price, in the right place at the right time. At its heart, retail should fulfil these needs and wants. Look at Amazon – an online success and one rooted in exactly these traditional retail principles.

Digital has succeeded spectacularly on the needs side of the equation, with instant search and convenient delivery, but when it comes to wants we are bewildered and paralysed by choice. With such a vast array of options, where does anyone start?

Inspiration, curation and personalisation are at the heart of the solution. These were traditionally hard to achieve in stores – there was no easy way to link and cross-sell products – but digital changes that. We have unprecedented capabilities. With the advent of ‘the internet of things’, and technologies like RFID and NFC, anything and everything can be tracked. We can match products and customers as never before. en.wikipedia.org/wiki/Kevin_Ashton

Thoughts on– Digital in Retail © Dalziel and Pow 2013

A pragmatic partner

Our digital team

You need a partner with a wide perspective: someone whose solutions are borne out of deep customer and retail experience, creativity, and a sound awareness of new technologies. You need a partner who can identify the right design solution, not just the latest gadget.

Digital is not the future of retail, but it is a huge, and growing, part of that future. Success won’t come from doing everything differently, it will come from embracing new skills and combining them with retail expertise. Brand experience is in the past. It’s now about customer experience: experiences chosen and driven by the customers themselves. We’re interested in finding the best ways to connect brands with customers on a more emotive level. And that’s never going to change.

Here at D&P we’ve been expanding our digital capabilities, and earlier this year Ross Phillips joined us to head up our digital offer. This is a rapidly growing discipline for us, as we look to integrate new technology with a level of creativity and experimentation appropriate to each project.

Thoughts on– Digital in Retail © Dalziel and Pow 2013

Below Ross shares some of the ideas, projects and research that have inspired him and his team.

Appearing Rooms by Jeppe HeinA clever mix of architecture and technology that encourages exploration and collaborative play.http://bit.ly/16hKu3y

Toca BocaA studio creating digital toys that combine intelligent interaction design with a genuine understanding of how their audience wants to engage.tocaboca.com

Little Printer by BergLittle Printer creates personalised miniature newspapers, bringing in content from the latest international news to this week’s gossip from friends. It’s the perfect catalyst to start exploring ideas around connected devices and personalised content.www.dalziel-pow.com/news/meet_our_little_printer

ASOS PremierBy removing the minimum order, guaranteeing next day delivery and picking up from your house, ASOS has removed a lot of the stress associated with online shopping. You can order three different sizes, try them all on, keep one (or not) and send the rest back. All of this and you haven’t even paid for a tube fare into town or had to go to the post office.http://bit.ly/29C8mu

Ugokidase - AKQA for NikeAKQA’s award-winning project for Nike takes inspiration from the Japanese arcade scene to create a range of physical games. The simple games and clean design draw players into what is clearly a huge technical achievement.http://bit.ly/1b9gbxP

NetflixRedefining the way people watch television, from their individual personas, seamless swapping between devices, amazing customer service, to socially-aware recommendations. All that and Breaking Bad too.signup.netflix.com

Topshop x ChirpA great use of a clever piece of technology that makes sharing content less clumsy and more fun.on.mash.to/14OSVTd

Aireal by Disney ResearchAs our interactions with technology become increasingly disconnected from the physical world, whether we are interacting through cold glass or using devices like Kinect or Leap Motion, it’s exciting to see advances in haptic technology that can reconnect us with the important feedback of touch.www.disneyresearch.com/project/aireal

VineThe six second limitation, the simple interface and the lack of editing / filtering make this video sharing app a pleasure to use and encourage the user to be more creative as a result.www.vine.co

Song Reader by BeckLike Bjork’s Biophilia app, Beck is playing with the idea of what an album can be. A perfect collaborative project that embraces consumers as creative equals and offers them a platform.songreader.net

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