In the second of a two-part series, Executive Creative Director, Antony Parham, looks at five key strategies where a brave approach can create retail success in a new world order for physical retail destinations.
Part one of our Brave Retail for the Transformational Twenties series, explored the challenges currently facing retail businesses and identified four areas where bravery is starting to create a new generation of physical retail experiences.
In a world of constant change and where retail survival is imperative, physical retail destinations can be key business brand assets. Here are five key strategies to enable retail success during this turbulent period:
1. A unique point of truth
Win the battle for relevance by finding a unique brand truth and dialling it up. Ask yourself what will make the brand experience unique, distinctive, difficult to replicate and a ‘must visit’ that cannot be experienced online?
Customers are choosing to engage with brands with integrity and shared values. Authentic, ethical behaviour is now more of a priority for brands who are seemingly moving from greenwashing PR, to genuine shared activism between people and brands.
For example, one of London’s latest store openings, Levi Haus, located in an area of Soho famous for vintage clothing, sees the brand banking on exclusive reused and recycled products becoming the catalysts to tempt shoppers into a city centre store during the current pandemic.
2. Embrace unexpected partnerships
Product innovation is key. Brand collaborations and unexpected partnerships have become a continual retail business model for savvy brands, helping them to innovate and remain part of the zeitgeist. Successful tactics include exciting limited edition drops, offering unique services and unmissable product launch events. All are designed to attract new audiences while keeping existing customers wanting more through constant newness.
Innovative product collaborations also create data and of course, drive sales. Building waiting lists by generating hype around rarity and recalibrating business models from pushing stock to sell via discounts, through to selling products with kudos, often via pre-order, are increasing profitability as a result.
A recent example of unexpected partnerships in action is the limited edition Adidas x Lego sneakers which sold out instantly online. So the newly opened, hyperlocal Adidas Originals store on Carnaby Street in London, is now promising access to their latest and most coveted products. It is certainly brave to aim to be a supreme style ‘hype machine’ destination - ultimately a more cultural cousin of the Oxford Street flagship.
3. Adopt a startup mentality
As we touched upon in part one, radical reinvention of traditional retail business models is required to feed customers' insatiable desire for new ways to interact with brands. As a result, retail brands need to act like startups and sustain a continual beta mode of fresh thinking and revolving door experiences, to keep customers coming back for more.
In this challenging world, temporary can win as the new permanent, where trial and testing of ephemeral moments, innovative experiences and monetised premium services and events can keep customers on their toes and competitors in the slipstream.
Ikea continually proves that a startup mentality is not only confined to smaller organisations. Ikea has a strong history full of innovations, collaborations, format strategies and inventive pop-ups. Among the most memorable experiences, is the Ikea France hot tub outdoor experience on the banks of the River Seine, where lucky draw Facebook winners read through the latest Ikea catalogue while relaxing in Nordic spas.
4. Create hybrid ecosystems
The shift to smaller, culturally localised and more affordable retail formats must also see the physical space work harder within an omnichannel, holistic ecosystem beyond apps and in-store digital screens.
Global lockdowns gave birth to brands having to use physical retail as a canvass for shoppable live streams (Melissa Brazil for example). In the future, retail brands could transform their physical spaces into immersive content factories. This is where experiential, ultra-personalised IRL experiences are offered to targeted audiences and act as a performance stage for rich, online brand storytelling broadcasts forming a ‘hybrid magnet’ of local and global emotional engagement.
Our latest work with Samsung on the media launch event for the Galaxy Note20 was a unique example of hybrid physical/digital broadcasting filmed from the Samsung KX Experience Centre in Kings Cross, London.
5. Set new measurements for success
ROI has never been more vital for physical retail experiences and never so challenging to achieve. Experience has been heralded as the key to saving brands from the growing retail apocalypse, but even concept store icons like Opening Ceremony in New York and The Shop at Bluebird in London were not safe from extinction.
Physical retail destinations need to be so much more than free experience playgrounds for showroomers to then buy products elsewhere. Return on Experience (ROX) needs to be implemented at the heart of retail businesses ensuring that the entire proposition is offering a product and service that customers cannot easily get elsewhere or online.
Increasingly, retail brands are monetising physical experiences with paid events, premium experiences and services to bolster ROI on top of commercial sales value measurements. It is vital, however, that brands create tools that also measure more indirect values such as Brand Value (brand fame/advocacy), Human Value (culture building/social ethical) and the halo effect to online sales created by physical retail brand experiences.