PSFK Future Of Retail: The Tastemakers Weigh In

PSFK spoke to top executives in the retail field as part of our research for our 2011 update to the Future of Retail Report. Read about what these key players believe are the key ideas circulating in the retail space.

While conducting our research for our recently updated Future of Retail Report, we had the opportunity to interview some cutting-edge players in the industry about the various trends that we see emerging in the retail space, both physical and virtual. Below, Bridget Russo, Global Marketing Director of Edun, Abby Lunardini, VP of Corporate Communications at Virgin America,  JD Spangler, VP of Category Development of Hanes Brands Inc., Mike Milley, manager of Design Research and Strategy for Samsung, Mike Peck, Senior Design Manager of Brand and Packaging for Starbucks, Tom McCann, Director of Retail Usability Research for Staples Inc., and Vickie VanHurley, Ph.D. and former Packaging Design Supervisor for Meijer, share their insights.

WHAT’S IN STORE?

How could this trend be leveraged by retailers?

Tom McCann (Staples): The popularization of online shopping is creating the expectation that a retailer’s inventory shouldn’t be limited by the physical size of its stores. Providing online and mobile access to a business’ full inventory is quickly becoming a necessity to avoid significant loss of traffic.

Mike Milley (Samsung): Limitations of inventory storage space are the bane of retailers’ profitability. Not having the right size or model number in stock can mean a lost sale. Creating direct access to virtual inventories can help overcome this limitation.

How could this trend be leveraged by product manufacturers?

Mike Milley (Samsung): Creating deeper ‘virtual inventories’ can reduce shipping and tracking costs for manufacturers, making channel distribution more efficient.

IN-STORIES

Have you seen an innovative example of this trend?

Bridget Russo (Edun): You see it everywhere and I love the idea of it. It especially works for a brand that has a true story behind its product. But I have yet to see a consumer on the street or in the store use it. I am sure that will change in time.

How could this trend be leveraged by retailers?

Tom McCann (Staples): The provision of additional information and customer reviews through mobile devices and QR codes when a customer is considering a product will become mainstream in the near future. This helps the customer feel more in control of the shopping experience and decision-making process. However, I expect that as more retailers provide these features, they will have a diminishing impact on brand loyalty as they become a standard element in in-store shopping.

Mike Peck (Starbucks): It’s such a rich area to explore, as long as retailers keep pushing the boundaries. There is nothing worse than a QR code that takes me to a standard website or YouTube video. Things that are truly interactive will win out.

Mike Milley (Samsung): Consumers of all demographic segments are already accustom to the online shopping experience. In-Stories provide valuable information at the point of sale, where customers would normally go online to research a product even before entering a physical retail environment. It will become essential to delivering consistent information and experience to the consumer at all points of contact.

How could this trend be leveraged by product manufacturers?

Mike Peck (Starbucks): This will soon be a standard for all packaging. Product manufacturers need to get onboard and consider it as a small but fun part of their overall marketing matrix.

Mike Milley (Samsung): As this trend moves towards the mainstream, it will lose its ‘wow’ factor. Manufacturers will have to focus on delivering content and experiences that are useful and meaningful to consumers.

J.D. Spangler (Hanes): Engage shoppers to inform, but also to learn about any product shortcomings and find out why they don’t make a purchase after seeing the detailed information on the product.

SOCIAL CURRENCY

Have you seen an innovative example of this trend? 

Abby Lunardini (Virgin America): Facebook’s sharing ability, along with its omnipresence, makes it a compelling combination for retailers. I think the challenge will be keeping the consumer benefits real and maintaining the authenticity of dialogue in the space. When we launched our new Florida routes in 2009, we had an interesting experiment that encouraged friends to share and book flights. That was a very successful campaign for us.

How could this trend be leveraged by retailers?

Tom McCann (Staples): While the ultimate goal is to have an army of promoters in the community influencing their friends to subscribe to a brand, retailers have to be careful not to create too wide of a gap between the social promoters and the rest of their customers. Treating the social promoters with preference will create a barrier between them and the community they are expected to influence. We still have a lot to learn about social promotion.

SOCIAL CURRENCY

How could this trend be leveraged by retailers?

Mike Peck (Starbucks): One ‘Like’ will soon be worth the same as millions in paid media when measured on a per-sale basis. On the same note, a negative reaction to a product can travel even faster in the social media space.

STORE WITHIN A STORE

Have you seen an innovative example of this trend? 

Bridget Russo (Edun): I suppose this is a hybrid of hard shop-in-shops and pop-up shops. We are looking at such opportunities. It’s important for a brand to have a presence that’s intimate and unique; that provides an opportunity to convey the brand in a more meaningful way than than just a rail of clothing with your logo.

How could this trend be leveraged by retailers?

Tom McCann (Staples): Creating branded experiences inside the store allows retailers to provide a product or service that their brand can’t support. They provide customers with relevant products that convenes their shopping experience — and that has considerable value.

Mike Peck (Starbucks): This is the ‘shop-in-shop’ model that has been around since the first department store. The only problem is Walmart or Target could soon end up looking like a swap meet.

Mike Milley (Samsung): Be inspired by the freshness of in-the-moment discovery enabled by pop-up stores and food trucks. Make the store-in-store experience temporary and discovery-driven.

J.D. Spangler (Hanes): Provide a one-stop solution for shoppers. However, there must be value-added resulting from the experience.

How could this trend be leveraged by product manufacturers?

Mike Peck (Starbucks): Brands want more control nowadays as budgets and staffing shrink. They also don’t want their story to be diluted by the seller’s brand story. The more you control the message, the more concise you can be.

ON MY BLOCK DEALS

Have you seen an innovative example of this trend?

Abby Lunardini (Virgin America): Yes, Loopt for an example. We’ve also worked with Groupon on the first Groupon for air travel, which sold out in about seven minutes in Chicago where we launched the service earlier this year. These can be incredibly powerful sales drivers and I think we’ve just scratched the service in terms of group and geolocation discounts.

How could this trend be leveraged by retailers?

Tom McCann (Staples): The functionality to present offers and deals on a customer’s mobile device should be seen as only a part of the retailer’s digital strategy. Mobile technologies are providing retailers with an opportunity to communicate with their customers on a more intimate level than previously possible. The mobile device is set to become the delivery platform for a personalized product and promotional program at the expense of the weekend store circular.

Mike Milley (Samsung): Location-based services must be sensitive to consumers’ real interest. Pushing irrelevant deals at shoppers will push them away. Make it effortless for consumers to opt-in or search for deals themselves.

J.D. Spangler (Hanes): Introduce new products, use add-on services to drive traffic, move special buy merchandise. However, there’s a real risk of super-heating the deal mentality of consumers and training them that if they just wait an unbelievable deal will come along.

DIGITALLY EMPOWERED STAFF

Have you seen an innovative example of this trend?

Mike Peck (Starbucks): Apple seems to have perfected this by removing the check-out counter all together. It’s not intuitive at first, but brilliant once you figure out what’s going on.

Abby Lunardini (Virgin America): We actually have this technology onboard our aircraft, using mobile screens that allow crews to place orders from mid-cabin for cocktails, meals, snacks and other onboard items.

How could this trend be leveraged by retailers?

Mike Peck (Starbucks): This allows the retail space to be fluid. Areas of a store, like cafés and lounges, can move freely—even the ‘purchasing’ section. It allows the store to be flexible in addition to changing the experience and always creating a sense of surprise for the customer.

Vickie VanHurley (Meijer): By enhancing the shopper experience, creating a personal bond with the shopper. Providing a more intimate look at products, services, options; personalized customer service.

J.D. Spangler (Hanes): Provide more time directly with shoppers, assist in locating items, automatically order items not in-stock and ship directly to shopper.

Abby Lunardini (Virgin America): It speeds the delivery process and allows for more face-to-face communication. This trend seems to be developing very quickly in North America, although it has been present in Europe for some time.

Bridget Russo (Edun): Jump on the train early. Test it out in key markets. Your customers will thank you for it!

How could this trend be leveraged by product manufacturers?

Mike Peck (Starbucks): Rather than banners or retail signage pushing a product, manufacturers can place a real person to not only talk about the new product, but to make a transaction on the spot.

Bridget Russo (Edun): If it could enable brands to connect directly with the floor staff in a more consistent manner—daily, weekly, monthly—it would provide much needed insight on customer reaction in a quicker time frame instead of waiting for bi-annual product knowledge seminars. It can also allow the brand to have a more personal relationship with the staff on the front lines.

DRESSING ROOMS

How could this trend be leveraged by retailers?

Mike Peck (Starbucks): This is a great chance to be actively connecting with customers at the very moment they are trying on the product for the first time. It’s an amazing time when the service, product and emotional connection all converge.

J.D. Spangler (Hanes): This is definitely an unpleasant element of the shopping experience. But making it more enjoyable and far easier will only assist retailers to sell more product.

How could this trend be leveraged by product manufacturers?

Mike Peck (Starbucks): Clothing can come with sell sheets. A dress can now have a story, and a customer service person there to tell it.

INSTANT TRY IT ON 

Bridget Russo (Edun): I think Prada was one of the first to have this. Does it work? If you are in the store, why not just try it on. Maybe it’s still slightly ahead of its time. I suppose if I was a customer in a rush and if the tool is actually functional, then it’s an interesting feature to offer to your customers.

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