Be in trend – is an expression used by 9 out of 10 retailers, but how to find out if the company really meets the needs of modern customers. In this case exhibitions and agencies statistics come in handy. Ustor team analyzed the research of one of the platforms for retailers and the results of the NRF Show & Expo 2019 event, and identified the main areas which worth focusing on.
Foreign and domestic retailers sell products under their own brand. There are almost no products from well-known brands on the shelves of a chain of discount store from Germany — Aldi. 90% of the products is Private Label. In this way, the company wants to overtake Walmart and Kroger grocery retailers. Private Label products are cheaper, because the customer does not need to pay for the brand. Moreover, own production increases customers’ loyalty. Albertsons, Walmart and Target increase the number of Private Label products. For example, American grocery company, Albertsons during 2018 has released about 1,400 Private Label products. The growth of Private Label products affects not only offline retailers: e-commerce is also working in this area. Amazon has about 7,000 Private Label products. Familiar brands give way to private ones, and retailers have to step back from just selling and lure customers with the best service, technology, combining multiple formats of services on one trading platform and so on.
Consumers are looking for places where they can not only buy a product, but also to recharge emotionally. Retailers are expanding the service, complementing the main scope of activity with related ones. Apple stores offer the Today at Apple program that inspire the customers to take interactive courses, participate in shows or trainings related to the company's products directly at the points of sale. There are classes on programming, learning how to draw with iPad Pro, music meetings and so on.
Department store chain Nordstrom opens small platforms, which offer services of tailoring, consultation with a stylist, nail salon.
Another example of an interesting add-on is the Casper store. Here you can not only choose a mattress, but also take a nap on it during 45 minutes [for an additional fee, of course].
The space of shopping centers has long been not limited to shops. Retailers have gone even further and combine such buildings with coworking.
Well-known retailers shift from large retail outlets, preferring small shops in regional centers and capitals. By 2050, the population is going to move to the cities and their suburbs. In addition, it is cheaper to rent a small room and less employees are needed to work there.
IKEA plans to open a shop-studio in 2019, where the customers will be able to design the interior and pick up goods for it. It wasn't just this company that did it.: Target, Kohl's, Nordstrom, Sephora open small shops.
Retail chain Macy's reduces the area of premises by 5 times, removes the walls between the zones and focuses on playing with the emotions of the customer.
Perhaps in the near future, shops in the cities will be transformed into service points where it will be possible to order the delivery of goods or seek advice.
Retailers think through each stage, calculate the time for execution, implement technology. Zara designs, manufactures, supplies and sells clothing at shops within 25 days. This way the company is able to respond more quickly to the needs of its customers.
Large retailers change the strategy of replenishment of a stock of goods. Target is testing a new system of products delivery to their stores in New York – fewer products are stored at points of sale, and are replenished as needed. In such a way the retailer manages to use the territory more effectively. Instead of a large area for the warehouse, the vacant space is used for online orders and packaging.
Retailers also use technology to manage orders and its delivery: AI, IoT and so on.
In the West, temporary sales points appear almost everywhere: in the corridors of shopping centers, parking lots, in the streets and so on. Their main advantage — low rent. There is no need to enter into long-term lease agreements or take monstrous loans. In addition, the retailer can introduce customers to a new product or launch their brand without large investments.
Bonobos — a subsidiary of Walmart, which sews and sells men's clothing — opened a mobile trailer in which the customer can try on clothes, consult with a stylist, order a favorite piece with home delivery. Such pop-up stores are opened not only by startups, but also by major players [for example, Alibaba, Amazon, Calvin Klein]. Temporary sales points open up a whole field for retailers to experiment. You can enter into a partnership with Internet giants, try to distribute different products and so on.
Retailers collect data about their customers to make them the right offers. Best Buy — a network of electronics store has launched an app that sends customers offers on one specific point of sale and signals to the retailer when the customer is on the way to pick up the order.
Sneakers store Goat offers its customers to create their own wishlist and set the price. If these shoes go on sale or the price falls within 5% of the one set by the buyer, he receives a push notification about the possibility to order.
Walmart, Best Buy, Zara, Brooks Brothers and others use offline stores to process online orders. So, they support e-commerce, combine online and on-point operations, deliver goods faster and cheaper. The line between physical and online retail is getting thinner, business owners are transforming their facilities into all spheres.
... And trends from NRF Show & Expo 2019
On January 13-15, New York hosted the NRF Show & Expo. The event gathered 40 000 participants, presented 700 stands and held 10 conferences. Experts have identified several trends that should be paid attention to in 2019.
Conclusion: retailers that are developing and betting on new technologies, go to the top, and those who by already well-known path go to the blurred goal of increasing profits, remain behind. To meet customers' needs, you have to follow trends and adjust to the market :)
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