Retail Renaissance

TrendWatching.com: Retail Renaissance

While traditional retail is facing serious and sometimes deserved challenges (Bland chains! E-commerce! Environmental impact! The financial crisis! Demographics! Anti-consumerism!), most people do, and will continue to, enjoy going shopping in the real world. From Oxford Street to Nanjing Road. In fact, rather than witnessing RETAIL RUIN, a RETAIL RENAISSANCE is in the making:

RETAIL RENAISSANCE | Smart retailers are defying doom and gloom scenarios, as they realize that shopping in the real world will forever satisfy consumers’ deep rooted needs for human contact, for instant gratification, for the promise of (shared) experiences, for telling stories. Hence the flurry of new formats, technologies, capabilities, and products that now are delighting retail customers around the world.

Here are just four drivers behind RETAIL RENAISSANCE (there are many more, but we think you’ll get the point):

1. OFF=ON: How the benefits of shopping online can now be had offline by consumers too.
2. RETAIL SAFARI: How experiences still rule.
3. INSTANT STATUS FIX: How shopping in the real world delivers instant status gratification in a way that online (still) can’t.
4. CITYSUMERS: The future of consumerism is urban, and urban culture is retail culture. On a global level.

Way back in 2008, we published a Trend Briefing on OFF=ON, highlighting the new ways in which the offline world was adjusting to, if not mirroring the increasingly dominant online world. We stated: “where OFF=ON gets most interesting [is that] a whole new set of business practices and processes, not to mention client involvement and marketing techniques, have emerged online, with consumers relishing these developments, and thus the offline world has to adapt.”

Since then it’s actually been more about total immersion than adaptation: the online world is now completely accessible even when ‘offline’ (that is, away from any kind of online device that is too clunky to be used on the go). For consumers, this is a cause for celebration: because while they want (if not crave) to be online 24/7 (ONLINE OXYGEN), they still prefer to live in the world of warm bodies rather than cyberspace (please re-read MASS MINGLING).

For retailers, this means a world where not only have consumer expectations been set by a decade of shopping online, but one where consumers can access all the things they love about e-commerce – convenience, the ability to hear other consumers’ experiences, total price transparency, and virtually endless choice – out in the ‘real world’ too.

Just check out this recent anecdote, about a shopper in Sears, who when faced with an in-store price $3 higher than Sears’ online store, simply pulled out his smartphone, bought online, selected in-store pickup and walked over to collect his purchase (via The Consumerist). Extreme? Perhaps, but consider this selection of stats.

• 8 out of 10 consumers research purchases online. While 42% research online and then buy online, 51% research online and then buy in-store (Source: Google & IPSOS OTX, September 2010).
• Multi-channel consumers who receive information from more than one source (store, online, mobile, or catalogue) prior to purchase, spend 82% more per transaction than a customer who only shops in store (Source: Deloitte, December 2010).
• E-commerce conversion rates have been hovering around 2-3.5% while brick-and-mortar conversion rates for fashion retailers have been around 20-25% (Source: Verdict Research, May 2010).
• Of the 40% of US consumers who own smartphones, 70% use their smartphones while shopping in-store (Source: Google & IPSOS OTX, April 2011).
• 74% of smartphone shoppers made a purchase as a result of using their smartphone. Of these 76% have purchased in-store, 59% online while only 35% have made a purchase via their smartphone (Source: Google & IPSOS OTX, April 2011).
• Mobile barcode scanning (including traditional UPC barcodes and QR codes) increased 1,600% globally during 2010 (Source: Scanlife, December 2010).

But OFF=ON is a cause for celebration for retailers too: ...

This is a lengthy report but a fascinating analysis of how their e-commerce, the virtual world, and bricks and mortar stores are being reshaped. I wonder what the trends mean for the Church?