RETAIL S SIX SPACE MISSIONS

Transcription

1 RETAIL S SIX SPACE MISSIONS

2 Retail now exists in a continuous cycle of reinvention. Because shoppers today want more. More choice. More innovation. More often. And they don t believe they have to pay more or be more loyal to get it. The increasing complexity and pace of change is damaging creativity in-store, the place it s needed most. For most retailers, the reinvention math simply doesn t add up. We believe there is a better way. That Reinvention doesn t have to mean a Restart. That you shouldn t have to choose between creativity and scale. We know Retail Reinvention is possible at speed and scale. How? Because we pioneered the concept. We call it Integrated Store Development TM - a belief system that informs everything we do - from sketch to shelf. It blends craft and creativity with models for efficient rollout, in one dedicated and determined team. We invented Integrated Store Development in 1964 and have been reinventing it everyday since. Because In a world that doesn t stop moving, you want a trusted partner that does the same. 2

3 In 2018, U.S. retail will see $5 trillion in sales. Miller Zell has understood retail for more than 50 years. We know that reinvention without intelligence is reckless, and change without creativity is blind. Retailers and brands already know that with growth comes change and with change comes challenge. Before the end of the decade 10% of all retail sales will be transacted online. New generations of consumers will come into their peak buying years, and expect more excitement, efficiency, value and meaning from the retailers they shop with and the brands they trust. And new technologies will further disrupt businesses, services, spaces, and brands. 3

4 We ve distilled our thinking about the future of retail into 6 key areas. WE CALL THEM RETAIL S SIX SPACE MISSIONS 4

5 MISSION 01 THE MISSIONS RETAIL SPACES WILL GET SMALLER MISSION 02 CULTURE WILL BE THE NEW CURRENCY MISSION 03 MISSION 04 THE MOST IMPORTANT SPENDING PATTERN WILL BE TIME DISCOVERY WILL BE REDEFINED MISSION 05 DESIGN IS DATA MADE VISIBLE MISSION 06 SPEED AND SCALE ARE THE ONLY DIMENSIONS THAT MATTER 5

6 01 RETAIL SPACES WILL GET SMALLER Small is beautiful and simple is better. The new retail world, responding to consumer demands for proximity and convenience, will see a shift to smaller footprints. Already, global sales in smaller stores like drug stores and convenience stores are increasing sales up to eight times as fast as their larger counterparts (Nielsen, 2016). One size no longer fits all. 6

7 THE DRIVERS: Digital and delivery-based retail solutions are redefining how consumers see and use physical stores. On-the-go consumers leading busy lives want to use brick-and-mortar stores for quick trips, specialized shopping missions and urgent purchases. One size no longer fits all. As online experiences are increasingly personalized, consumers want real-world shopping to be dynamic, flexible and exciting. WHAT THIS MEANS: Retail store spaces have to work harder. In a multi-channel, mega-information, ultra-connected world, consumers expect stores to be reactive and responsive. Retailers and brands will need to create spaces and the systems that serve them which are agile enough to respond to customer feedback, datadriven insights and external trends. This means a new era of agility for store design. This means flexible formats that have the capacity to be compacted into unexpected, and often smaller, locations. And this means store spaces lead double lives, reimagined as local hubs, hybrid hospitality venues, experiential spaces and places for communities to connect. KEY CHALLENGES FOR RETAILERS & BRANDS: Meeting the desire for ease, efficiency and speed at the same time as providing exciting experiences. Delivering inspiration and instant gratification in the same space. Living up to consumer demands for local relevance and community connection within scalable store formats. 7

8 02 CULTURE WILL BE THE NEW CURRENCY Brand loyalty is so last year. In an increasingly connected world it s never been easier to compare prices, consult peers and hop between brands in the quest for value. Future shopper satisfaction and loyalty will only be achievable through a new, sophisticated combination of personalization, social shopping, and collaboration. 8

9 THE DRIVERS: Digitally native Gen Y & Z consumers, born between the 1980s and the present day, don t remember a time before the internet offered them the world in the palm of their hand. Their brand loyalty will be hard won. Greater expectations mean retailers and brands need to appeal way beyond the wallet: consumers expect brands to connect, form relationships and represent values that reflect their own. Social is standard: consumers want rewards for sharing their data and opinions. WHAT THIS MEANS: Making, measuring and managing shopper satisfaction and brand loyalty will be part of every store design brief. Consumers will increasingly expect brands to stimulate their emotions, senses and memories in the quest for connection. Participation and personalization will be important at every touchpoint. Understanding and responding to individual consumers needs, preferences and personal characteristics will help brands to cultivate longer-lasting relationships. Stores will have to think integration if they want to remain commercially relevant. Payment systems, reward schemes, social media engagement and shopper flow in store are inextricably connected. KEY CHALLENGES FOR RETAILERS & BRANDS: Putting people first. In the rush to adopt new technologies, stores and retailers, it s more important than ever to understand user needs whether that s shoppers, suppliers or staff. Collaborating and sharing: consumers expect brands to work together. Systems, processes, technologies and spaces have to be able to adapt and integrate. 9

10 03 THE MOST IMPORTANT SPENDING PATTERN WILL BE TIME Consumers aren t listening to you. In a world where everyone is engaged in continuous partial attention, getting share of mind and share of day is the first step to getting share of wallet. Yet retail spaces have a huge opportunity to provide Third and Fourth spaces in the lives of consumers, providing seamlessly for their needs for recreation-focused spaces that facilitate leisure, entertainment and even culture. 88% of consumers want a faster checkout experience 10

11 THE DRIVERS: Speed is one of the top concerns of modern shoppers. 69% of customers believe fast resolution to a problem is vital to good customer service, while 83% of customers expect more from customer service, including real time communication (Zendesk, 2017). In the US alone, 88% of consumers want a faster checkout experience (Harris Interactive/Digimarc, 2015). 67% of consumers prefer to shop at a retailer that offers self-checkout over one that doesn t. 62% prefer to have product questions answered by store associates instead of reading product displays. 75% prefer to shop at stores that provide an engaging in store experience. (Interactions Consumer Marketing, Inc., 2016) New living and working patterns see consumers expecting elongated and extended service and experience offers from retail and brand spaces. WHAT THIS MEANS: The store is more than a space, it has to be a place. Club-style spaces and services will trade on connecting like-minded consumers. Focusing on dwell and sell means embedding into store designs ways for consumers to experience culture, facilitate encounters and for brands to train, explain and entertain. Recalibrating layouts for a more streamlined and speedy experience, without sacrificing service quality and personal connection. KEY CHALLENGES FOR RETAILERS & BRANDS: Expectations around customer service are only going to get bigger. Where and how staff are deployed in-store and online will be a new battleground. Integrating stay and play store space solutions with other brand channels will require new ways of working. The new wave of retail will target lifestyle interests rather than conventional, age-defined demographics. Understanding your customers just got harder. 11

12 Virtual reality technologies will make designing physical retail spaces and experiences ever-more important. 04 DISCOVERY WILL BE REDEFINED Hyper-integration is retail s holy grail. 93% of consumers use their phones while shopping (Deloitte Consumer Survey, 2017) and 60% prefer to shop at a retailer that connects with them on social media over one that doesn t (Interactions Consumer Experience Marketing, Inc., 2016). 69% of people have visited a retail store as a result of that retailer s social media post (Interactions Consumer Experience Marketing, Inc., 2016) This turns the tables for stores. The expectations that retail interactions are pretty, painless, personalised and predictive will be set online, and will need to be fulfilled or surpassed within stores. 12

13 THE DRIVERS: The predictive analytics and individualised algorithms of online services are providing consumers with more practical versions of personalized retail than ever before. Consumers want self-navigable, non-pressured retail spaces. But because the human brain is hardwired to appreciate surprise, they will also demand that brands continue to deliver delight. WHAT THIS MEANS: Intelligent spaces that allow consumers to slide seamlessly across channels, delivering insight into full digital, physical and social (media) behaviour, are key. Store concepts must leave room for impulse, surprise, inspiration and entertainment. Virtual reality technologies will make designing physical retail spaces and experiences ever-more important. Virtual scenarios for multiple users and scalable pop-ups for launch at home are just two concepts on the near horizon. KEY CHALLENGES FOR RETAILERS & BRANDS: Delivering discovery, re-introducing impulse and constructing retail experiences through content will turn some traditional category-led and flow-focused thinking on its head. For hyper-informed consumers it s important to create environments where they are able to lean in and discover without the pressure of the hard sell. Store concepts must leave room for impulse, surprise, inspiration and entertainment Younger consumers in particular communicate through visual or even sonic shorthand. This behavior has to be translated into how shoppers navigate and articulate desires. From digital image boards for choosing products to sonic apps, tools for search and direction have to be recalibrated. 13

14 Every company needs to be a technology company and a content company. MY CARD TOTAL POINTS POINTS D CARD REWARD CARD +100 POINTS 05 DESIGN IS DATA MADE VISIBLE Data is the new oil. Except it s better than oil: it s renewable. It s human-generated. And harnessing its power is about creativity and cultivation rather than extraction or refinement.* So the new world belongs to those who know what to do with these limitless reserves. For retailers, creating effective tangible assets in an increasingly digital world will be the next industrial revolution. *Source: Harvard Business Review 14

15 THE DRIVERS: The advent of the Internet of Things is already showing a world where systems, products and devices communicate with one another. Consumers will expect retail to sit at the heart of this. Smart brands are already using the store as both a repository for data and brand media content, and a place to generate it. Every company needs to be a technology company and a content company. Retailers are no exception. WHAT THIS MEANS: Ultra-connected merchandising displays are already allowing brands to keep a sharper eye on store activity, including consumer behaviors. Strategies for capturing, analyzing and responding to consumer emotions in real time will need to be baked into store solutions. The oil has to flow: store formats will need to flex in order to remain responsive. KEY CHALLENGES FOR RETAILERS & BRANDS: The difficulty of harnessing data and making it useable is the other side of the big data coin. Retailers will need to learn fast. Retail s evolution into a landscape strategically wedded to emerging technologies means brands and stores need ever-smarter design and designers. Data driven retail is more active than passive. Retail spaces will have to combine deep customer knowledge, in-the-moment intent signals, and immediate activation. 15

16 06 SPEED AND SCALE ARE THE ONLY DIMENSIONS THAT MATTER The only constant is change is the only cliché that s true. The future is as-yet unwritten. The only way to anticipate future flux is to build flexibility in from the start. Efficient agility and the ability to deploy it at scale will be the key to growth for national and international brands. Retail will see a new breed of chameleon-like spaces. 16

17 THE DRIVERS: The number of US consumers browsing and buying online will hit 270 million by 2020, driven largely by activity on mobile devices.* Platform based and sharing economy services (from Uber to Airbnb and beyond) have disrupted previously stable industries in just a few years. Consumers expect innovation. Around the world, more than 6-in-10 respondents (63%) say they like when manufacturers offer new products.** WHAT THIS MEANS: Retail will see a new breed of chameleon-like spaces. Commissioning, rolling out and measuring ROI on these will demand new skills and new ways of working. Polarized markets in post-austerity economies will demand a wider range of retail responses to cater for everyone from value to luxury consumers. KEY CHALLENGES FOR RETAILERS & BRANDS: By 2020, there will be approximately 9.7 billion displays on Earth serving up 5,000 ad views per day per urban person a 25% increase since Brands and marketers need to be looking at how to carve out a slice of that attention seamlessly, and in a way that adds value. Search will be replaced by context and stores will have to respond. *Forrester, 2016; **Nielsen, 2015; ***Max Planck Institute,

18 Miller Zell is a retail experience solutions company that fuels a more informative, engaging, entertaining and customer-centric retail experience. For more than five decades, we ve combined creativity and execution capabilities to reinvent every kind of retail environment, with fullyintegrated services we call Integrated Store Development. It s our unique ability to provide valued solutions that include strategy & research, creative design, printing, engineering, project management, fixture production and installation all under one roof. Our dedicated, collaborative team aligns all elements of largescale retail reinvention to ensure nothing is overlooked, and that our partners benefit from our customized, insightful approach. MILLER ZELL Corporate Headquarters 6100 Fulton Industrial Blvd SW Atlanta, GA millerzell.com info@millerzell.com 2018 Miller Zell Inc. All Rights Reversed.