The recipe for success in the future of retail: Observe, react and get ready for constant change
It is extremely interesting to live right in this moment – in a world that changes constantly with an accelerating pace and where every individual and enterprise must create themselves from the scratch every day. World is smaller than ever before. We have all the services right in our hands and through our social networks we are able to access the metropolises of the world where we can experience all the possible concerts, sport events and services one can imagine. If we haven’t completely utilized the possibilities of digital revolution, we should do that now.
Finland, in the ears of a foreigner, is not just a Nordic stereotype anymore, but a country that has a lot to offer for global economy – if we have the courage to lean in. Now it is not a time for waiting what future may bring. It is time to step up and be the one who creates the future.
One of the most interesting current discussion topics revolves around the future of retail. Retail has a lot of common with media and this may explain my passion towards it. Like in media, retail is all about content, trade and communities. The whole industry develops rapidly and those who are able to jump from field to another are the ones who succeed. What is the role of retail in an environment where the consumer doesn’t care if the product is new or old, loaned or owned or custom-made to meet even the highest standards? There are many scenarios of the future of retail. Part of the future researchers believe that brick and mortar shops are no near dying, because consumers need a physical presence of the brand to become committed. Another part of the predictions state that malls will disappear roughly in ten years. I personally don’t believe in the latter, but I do believe there are huge changes ahead.
The pace of the transformation may come as a surprise. Therefore retail industry should concentrate on involving a wide range of experts from different fields such as information, logistics, space designing, technology, strategic planning, management and customer engagement. It is time to leave the box and work together. Different way of thinking is a priority. Could Linnanmäki and a shopping mall jump in to the same boat and create a whole new concept where experience and leisure are the priority and the product comes next? Or could a department store recreate itself as a giant showroom with a range 10000 times bigger than the current one? The products at the showroom would only be there for demonstration, touching and fitting – the actual buying would happen online maybe just by shaking a smart phone.
Or what kind of difference would an app make that remembers what you bought last time, what is your shoe size and what diet you follow? Customers come to retail spaces mainly to enjoy themselves, meet people and also to find inspiration and buy. The delivery process could also be renewed: what if Uber would be the one to bring the bought goods? Luxry brand Club Monaco is a great example of a clothing chain that opened a store combining a book store and a café. The concept of brick and mortar shops could be anything that inspires and offers value to the customers. So what can Helsinki offer? Could a fashion store also be a Blow Dry -saloon and a clothing store for men include a barbershop offering a possibility for slumbersexuals to fix their hair while sipping a coffee and going through the collection. Brand experience shouldn’t be tied to a certain industry. In fact there should be intended collisions.
American Express is a good example of the brave ones, who have jumped in to the discussion of the future of retail. The brand launched a concept to Helsinki Design District called Offline that is a hybrid of an online store and a traditional brick and mortar shop. There a customer has a possibility to spend time and feel the products but the actual buying process happens online and there are no salespeople or cashiers. The personal service is the priority. We need more of those influencers who not only speculate but lean in. Offline concept is not a final product, but it is a platform for discussion that functions as an inspiration for everyone in retail – small businesses as well as big shopping malls.
Service is the priority
It hasn’t been until now that the discussion about retail has turned more positive in Finland. For long we have sat under the umbrella waiting for the rain, being passive and not taking those crucial steps towards the change while retail industry everywhere else is developing. Maybe there was not enough trust for this change or it felt too scary. Since 2013 the discussion has been negative and stiff. Traditional shops have been forced against online stores, situation in Russia has faced a lot of tension and decreasing sales in retail have caused panic. But most terrifyingly, the eyes towards the revolution of thought have remained shut.
Today online stores are 8% of the whole retail industry but this may change rapidly when there are new actors in the market. Start-ups, such as Wolt, are good examples of the change of the market that is still only a privilege of few, but in the future innovative ways of retail will become a norm not an exception. The whole retail industry should now concentrate primarily on the customer. Online stores change our perspective on products and our needs have been renewed. More tailored the service is, more used to this kind of behavior we become – and we are ready to pay for it too. Quoting to my earlier comment about experts, one big change will be towards salespeople and the expectations they are facing. They become part of the marketing team by being the face of the brand and they represent those carefully chosen values and attitudes of the company. People have a natural need to interact too. Social media hasn’t met this completely yet and this is a great opportunity for small boutiques. That is where service experience offers the greatest value off all.
The new frame of value
The ones who will succeed in the future manage to offer new experiences and value that rise the quality of life of an individual. Instead of talking about monetary value the discussion shifts towards immaterial things. If the brand manages to offer something valuable to the customer, such as smooth service, there is a guaranteed revenue waiting. Today new forms to consume have slowly become more relevant. New methods of trade have taken place and consumers have started to create groups where they sell goods to each other without any interfere of the companies. If retail takes advantage of this development, completely new ways to do business could be created.
I see many unturned stones and unutilized possibilities in the retail industry. Digitalization, which has gained a remarkable amount of attention lately, is only a small part of this change we are facing. Now is the time to face the change and create concepts that make our way to the future.