How fashion brands are pioneering the future of retail
12 Sep 2017
E-commerce is still growing and fast. But for those concerned about the steady decline of physical retail, here are some promising statistics: the portion of personal luxury goods purchases that happen online – which stands at 7% – is expected to plateau at 20% by 2025.
Yes, Amazon is on it’s way to monopolizing convenience purchases. But for industries like fashion, where experience and novelty is still placed before convenience, the good money is being spent on investing in the store of tomorrow. From purchasing innovations to in-store design and logistics – the apparel industry is the one to watch.
And from what they’re suggesting the store of the future will not just be digitized, it will be a completely new offering. As José Neves, founder of UK-based startup FarFetch, remarked in a recent interview with Business of Fashion: “We absolutely do not believe there is one store of the future. There will be 1,000 stores of the future.”
Tomorrow, the offline and the online will come together to give us something even better. Here, we’ve done some future gazing to see where the store of the future is heading.
Why will people still go to stores?
The question every brand is asking: why will customers come to a store in the first place, if they can purchase - and return - everything they need from home thanks to drone delivery and improved logistics?
That’s why retailers are seeking to offer people something more: an experience they can’t get online. Something tangible, memorable and far superior to just walking into a shop, rifling through a few items and leaving again. Stores are becoming the places people to go to discover, learn and get inspired.
And as we often see at Appear Here, there’ll be more collaborations as brands seek to make use of their (increasingly expensive) real estate. No square foot can be wasted. Evening events give customers a reason to forgo a few hours on Netflix and exciting brand partnerships will bring new dynamics to in-store experiences.
In store cafes are another example – Swedish retail giant H&M’s new launch Arket is just the latest in a string of stores like Burberry, Topshop and Harvey Nichols, which incorporate space for sitting, relaxing and refueling.
How will people shop in store?
Earlier this year FarFetch debuted its vision for where physical retail is heading. An augmented retail solution that "links the online and offline worlds, using data to enhance the retail experience.” It’s ambitious, but FarFetch are putting their money where their mouth is: they have quite literally called it The Store of The Future.
To give you a tour of what FarFetch have already developed: there’s a universal login that recognizes a customer as they check into the store; an RFID-enabled clothing rack that detects which products those customers are browsing and auto-populates their wishlist; a digital mirror that allows them to view said wishlist and summon items in different sizes - and colors - and a data layer that joins all of this up. Just imagine the opportunities that will arise off the back of all this customer understanding.
Forward thinking retailers are looking to use technology to enhance the way we shop, not disrupt it. They know that their customers are there to touch, feel and experience their products, not to swipe another screen.
*When user experience becomes the focus *
Currently, automation in store has done little to improve our experience. But the fear of hearing the dreaded “Unexpected item in the baggage area” will soon be put to bed, if Amazon is anything to go by. Their new store in Washington, Amazon Go, is trialing a ‘grab and go’ concept, where contactless technology eliminates any need for a check out at all.
In further proof that fashion is leading the charge on this Rebecca Minkoff, has already implemented a self-checkout solution in one of its stores, catering to that customer who doesn’t want to feel pressured by a sales assistant. Such technology opens up huge amounts of possibility. Beyond simply replacing the humans front of house, this can allow for them to be more helpful to the customer.
And thanks to data, assistants will instantly know what they bought last time, or what sizes they usually end up going for. While this use of data may seem intrusive, people are used to this sort of exchange thanks to social media. The general rule is people will share as long as they know they are getting something of value back. And the benefits here are for obvious: if the experience is right, the customer spends less time in store because they can find products that meet their requirements faster.
And time is ultimately what retailers are competing with. To make a sale with a hurried customer requires extra leg work in catching their attention – but also offering a more tailored selection. We’re seeing this already in the rise of speciality stores, and it’s spreading to major high street brands This has remained front and centre for Arket, during the design of their flagship Regents Street store in London. “Our idea has been to create a store that feels relevant from 2017 onwards” says CEO Lars Axelsonn. “We have noticed that customers today are stressed out and pressed for time, and we want to make it easier for them by offering a broader, but carefully selected, assortment [of clothes].”
The last hurdle: delivery
And finally; the delivery. From drones to the internet of things, the technology that will revolutionize how we receive our purchases is very much here. Click And Collect programs and companies like Doddle are raising expectations; customers want to receive their product when and where it suits them. For example, at Nordstrom, an app enables users to select items they like, then book to try them in the store of their choice. This, all with no commitment to purchase.
In the post-till world, a checkout station may be simply to organize transporting your items home, or packaging them up. And it’s not just your fridge that will know when it needs to be replenished. If the Internet of Things can replace your milk without needing your involvement, so a depleting stockroom can recognize instant trends, know when you need more of something, and advise future production decisions. As the store - the front line of any retail business - becomes more efficient, the whole back end of the business benefits.
Physical stores will always have a place in our towns and cities. Just don’t expect the store of the future to be like anything you know today: it will evolve from an address to a powerful platform. And as these fashion brands are showing, the key to success is to harness new technologies and create outstanding customer experiences, in whatever way possible.