Despite ongoing inflation, the retail sector in the UK is showing improvement, with like-for-like sales rising 4.9% in March, according to BRC/KPMG. With this extended bank holiday season upon us, there is more of a spring in the step for retailers. A recent survey we commissioned of 2,000 consumers found that 13%, equating to 9 million adults, are definitely planning to hit the physical shops, presenting luxury retailers with a meaningful opportunity for sales uplift
To take advantage of this opportunity, retailers need to create a shopping experience that is truly focused on the customer. 60% of respondents in the survey cited a pleasant environment as an important factor in a great retail experience. Luxury retailers should, therefore, ensure that they offer a pleasant in-store experience, starting from the moment the shopper walks in.
This can be done by creating an immersive journey towards the checkout with creative displays and merchandising. All of this should be backed by product availability, highlighted promotions, and all-around first-class customer service. Staff should be readily available on the shop floor, and queues at the till should be kept to a minimum.
To combat inflation, promotions are vital, with 59% of respondents in the survey agreeing. Luxury retailers should ensure that they are competitive with online channels and have promotions visible and clearly marked up to entice hard-pressed consumers to open their purses and wallets.
In our survey, 42% of respondents cited engaging with knowledgeable shop staff as a key reason for their visit. Luxury retailers should, therefore, ensure that staff is well-trained and ready to answer questions. A well-trained expert can be worth their weight in gold, particularly with considered purchases. This will leave a positive imprint encoded on the memory of customers.
One of the top reasons given for in-person shopping versus online is to try before you buy (47%). Luxury retailers can play to their strengths here by effectively merchandising their products and encouraging customers to engage in a tactile journey of discovery. It is crucial to have the right expert on hand to assist the process, with all the senses of the shopper engaged in a truly immersive physical experience that will lead them towards the checkout.
The modern retail experience is underpinned by sociability, combining a trip with meeting friends and dining. Retailers and brands need to complement this by providing an environment that is sociable and luxurious, offering dining experiences, and other events that are relevant to their luxury brand.
By creating a luxury experience that extends beyond the purchase, retailers can build customer loyalty and enhance the overall shopping experience for the customer.
To read the full article by Dan Todaro, Managing Director please visit Luxury Advisor
Creating an effective online presence is hard and maintaining it is harder still, so why do it? Well, it’s the virtual window to your store and even if it’s a non-transactional site, it’s as important as your store experience.
So when considering your website, always ask what do you want the site to achieve. If you want to drive sales, the site needs to be set up to have your consumers coming to it. You could make the best site in the world but if you don’t attract the right people to it, no one will know it exists, nor will you sell anything.
If you have the luxury of a big budget to launch a major ATL campaign to drive awareness of the site, then great but if this isn’t an option, then you’ll need to get inventive and use your resources wisely. Therefore it is best that you spend as much time on planning the site as defining your consumer base, driving the customers with each click-through to your site. And don’t forget to make it mobile compatible as according to Statista, 59% of all worldwide website traffic is now on mobile devices. According to Hubspot, the industry benchmark for average dwell time is considered somewhere between 2-4 minutes. It usually takes around this time to explore a website and get a feel for the design and your offering.
You will soon know if you have the right audience coming to the site as they will purchase if it’s an e-commerce site or engage if not, the objective is to not let them drop off, never to be seen again. Play to the key strengths of online, with 85% of consumers researching online before a purchase in store, make sure you use the space at your disposal to portray all key bits of information surrounding the products.
Consumers will often be coming to your site for information on pricing product details and reviews, so ensuring all this information is readily available and accurate is key and furthermore, this helps with SEO, helping to push your site up the search rankings.
Everything from pricing, through to more detailed specifications should be easily found and digestible and failing to do so will lead to customer drop-off. People will more often than not be looking for this info with a view to also then go and touch, feel, demo a product with a view to purchase in-store.
If you already have a physical store, make sure the site is aligned with your in-store messaging and values. Too often retailers aren’t aware of how messaging, promotions, experience and brand compliance should transcend from store to site and vice versa. Recent Gekko research found that 69% of people surveyed said that a well-synced online and offline experience would help drive a considered purchase.
The customer journey more often than not starts with a visit to your website. Gekko’s research has shown that 85% of shoppers looking to make a significant purchase will do their research online before actually buying. This shopper journey should be developed, keeping the consumer’s attention, rather than leaving them unmotivated to click beyond the landing page or walk through your physical door. Therefore with dwell times on a landing page recorded as up to 4 minutes, the importance of the look, feel and ease to digest information and navigate their way through your site is therefore the key to a successful site. It’s understood that 88% of online shoppers are more likely to continue shopping on a retailer website that offers a personalised experience, increasing to 96% of Gen Z and 97% of Millennials based on research conducted by Elastic.
It may seem an obvious thing to point out for those of you with a physical retail presence but be conscious of using changing seasons, events and promotions as a worthwhile excuse to update your site. Keeping your site fresh and relevant will make sure you are attracting traffic to the site and driving potential customers to shop with you for special seasonal deals. Ensure that any promotion or event you are running in-store is reflected on your site and perhaps create a call to action. By doing this you can get to understand your customer better so that you can proactively market out to them at a later date. Utilise site analytics to assist you in understanding who your consumers are and how they are using your website. Insights on where users are coming from, which pages shoppers look at the most, plus the effectiveness of any marketing campaigns you have running will all help understand key impacts and help in your long-term strategies for the brand and products.
If you create a site that has independent reviews and rating, which is considered standard, then be prepared not only for the positive feedback but also the less than glowing reviews. The reality is that all retailers will get these from time to time. It’s how you deal with this feedback that matters. According to Review Trackers, 94% of online customers have avoided a business due to a negative review. Therefore for over 9 out of 10 customers, online reviews have become essential to their decision-making online. Whilst 94% may avoid you, it’s claimed by Podium that 93% of customers say they’ve made purchasing decisions based on an online review. What’s more, most customers say they won’t engage with a product or business if they see too many negative reviews or a star rating of less than 3.3. Be mindful of how you position your feedback and its features in Google searches of your site.
It is estimated that 21% of UK retail purchases are expected to take place online in 2023. It’s therefore no surprise that your e-commerce strategy is important. With more customers shopping online, your business can sell more and earn more as a result if you’re running an effective e-commerce site. However, whether your goal via your website is to boost direct sales or only engagement, it’s important to create a strategy that encourages consumers to your site and increases dwell time that elevates the customer experience and begins their journey.
Keeping the site uncluttered is critical as is the need to have relevant imagery that truly represents your business, royalty-free stock photography can work but it needs to be true to your brand. Involving your staff can make it personal too. It makes you real and relevant to the consumer with the added bonus that they recognise a few faces when they drop into your store, increasing your credentials as a retailer that values a personal approach to the customer journey.
To read the full article by Dan Todaro, Managing Director please visit ERT Online
The last few years have seen a series of unprecedented events that have created a new paradigm where consumer expectations and needs have been radically redefined. In this new world, retailers need to respond with a new approach in tune with our changed times.
So how did we get here? Firstly, the pandemic’s cultural legacy has been a shift to a life where many of us continue to work from home, meaning retail businesses need to cater to a new stay-at-home existence. Meanwhile post-pandemic we have seen political instability and huge inflationary pressures impacting many. The climate crisis is also becoming more apparent on the back of record global temperatures and a series of catastrophic natural disasters. This is also feeding into permanently changed behaviour from millions, particularly younger consumers.
For every retail marketer, an evolving playbook is needed for this new age to respond to this evolution of behaviour. Both cultural, economic and environmental. Based on some recently commissioned research with YouGov, we identified five key factors driving behaviour at this time.
1) Affordability
This means something different to everyone, but in a recession or a flatlining economy, customers spend differently. So what does affordability mean for your consumer and how do brands accentuate this factor? I recently spoke alongside AMDEA who are the body that represents the white goods industry in the UK, who did some research in relation to the Eco buttons on washing machines and dishwashers.
They revealed it was saving consumers on average £90 a year. They now really highlight this fact to drive consumers to brands promoting this feature either in store or online. Knowing that affordability is a critical criteria for consumers, brands can smartly promote the long term savings they can offer. Perhaps paying back the cost of the appliance within five years. When you multiply this reduction in energy costs across several appliances in the home, you can see how the savings increase.
Furthermore the energy saving ‘eco’ modes can provide a win/ win of appealing to sustainability minded consumers.
2) Essential trumps desirable
We are seeing far more caution in the market for spending on big ticket items in particular. Therefore positioning your products as ‘essential’ items in the psyche of your target audience is important as part of the marketing mix.
Perhaps the days of assuming there is an implied need for your brand are no longer present. Disposable income in all households, even middle earners, is becoming more scarce. They may want your product. That desire may be there. They may covet it. They may feel that they need it, but unless it’s absolutely essential and integral to their life, they are not going to buy it.
Therefore highlighting why your products are ‘essential’ to their needs. It is not so much that it is on offer but more, how does it add genuine value to their lives? Why is this going to be a product they can’t live without? Tapping into the primal needs of the customer in more challenging times is a way retailers can craft their story and resonate honestly with their target audience.
3) Durability
As an extension to being essential, people will need to feel that the item that they are buying is built to last for more than the lifespan of your average reality star. Low down on the list of drivers influencing behaviour in today’s climate are more ephemeral qualities like perceived ‘brand value’.
Rather than offering a lifestyle associated with a brand or product, retailers could focus on the quality of their products. This should be the starting place for a conversation about a brand and how it will last for someone whose budget is going to be squeezed for some time. The hardiness of your products, particularly for those more expensive items in your range, is crucial. No one likes being ripped off but people are far less willing to tolerate buyer’s remorse in a recession.
Indeed we are now in a new reality where brands have to accept quality and durability is delivered at a more affordable price point. Certainly if they want to maintain market share. Losing market share in a downturn can be very difficult to recover from, when times return to being good. Long term thinking needs to trump short-termism.
4) Sustainability
The longer something lasts, of course the more sustainable it is. Sustainability is a huge driver for younger generations. Far from moving away from this priority at a cash strapped time, consumers are in fact doubling down. Indeed research from SAP revealed that despite the cost of living, over half (52%) of UK consumers aged 18-34 were actively looking to shop more from retailers with strong sustainability credentials last Christmas.
This is not greenwashing but also understanding this generation will do their research about the full life cycle of a product. The good news is the extent to which this isn’t something that needs to sit in isolation to your other brand positioning. If something can save money through assisting less energy use or being more durable it is therefore more sustainable and solves for a number of current consumer concerns.
Think through the life cycle of your products and make sure they stands up and are robust. It is not just a page on your website espousing your values, but should run though your whole business model like a stick of rock (made with ethically sourced sugar).
5) Innovation
Finally innovation remains of critical importance. To grow you have to be of relevance tomorrow as well as today. Particularly when there is a real need to stand out from competitors with people less willing to make multiple purchases.
Indeed innovation plus value has also been a winning facet of the trend for air fryers. Indeed according to research by price comparison website PriceRunner, demand has soared by 3,000 per cent since 2021.
However critically the air fryer answers several other current consumer needs states. We, post-covid are eating at home more and it is a way of getting your family and your friends and getting your kids involved. It is also healthier. This addresses the growing trend for healthier versions of popular meals.
Most crucial to the surging trend though is the value proposition. The money that can be saved through cooking at a time of rising energy costs is significant and of course energy efficient.
In summary, retailers do need to recognise changed behaviour and a new paradigm on the back of a series of interconnected trends and crises. These centre on changed lifestyles that are more based in the home, a growing movement for sustainability and most crucially the need to save money.
Consumers quite simply won’t invest in the way they did before meaning retailers need a laser like focus on their new needs states. The values they need to highlight are: value for money, being essential, durability, sustainability and innovation. The more they can be all of the above, the more customers will respond.
To remain relevant as we face an economically challenging climate is tough. For some, this will require a radical step change.
To read the full article by Daniel Todaro, Managing Director please visit Retail Sector
CES is the annual (notwithstanding Covid) tech industry gathering in Las Vegas that showcases the latest technology and products in the consumer electronics industry. Did the 2023 show present any hope for consumers struggling with cost of living pressures?
Recent Gekko research revealed that the cost of living crisis has had a dramatic impact on consumer spending with 66% slash spending on non-essential considered purchases and 43% on essential items. On a day-to-day basis, the main priority for many is ensuring that the bills can be paid and as a result, a large proportion of homeowners are looking for ways to save money, whether that’s cutting back on the heating or even switching appliances to save on electricity.
So, against this backdrop, we watched with interest for the big reveals and announcements that were coming out of CES in the first week of January to see what might appeal to cost-conscious consumers thinking of investing in money-saving and more efficient solutions for the home.
It’s no surprise that a tech giant like Samsung managed to grab headlines at CES and the updates to their smart home solution certainly presents some tangible savings for homeowners. Samsung’s SmartThings Energy and in particular their new AI Energy Mode which offers support for more devices and regions with even more significant savings. This new update includes 15% more energy consumption savings for compatible refrigerators, up to 20% for compatible air conditions and up to 35% for compatible washers on selected cycles. This update will allow the user to save electricity on these products which equates to savings on the user’s energy bill. The SmartThings Energy service which can be viewed on the SmartThings app available on both Android and iOS can show the energy consumption of the user’s SmartThings products and how much the estimated cost is. You can view this by day, week or month and it will even break down the energy consumption per hour. This app is very handy to keep track of the “Demon Appliances”.
If multitasking is your thing then a desk, bike, and computer combo might just appeal, with the added benefit of saving yourself a bit more money on your electricity bill. The eKinekt BD 3 from computing brand Acer addresses this somewhat niche requirement. They have branched out into the world of fitness with their eKinekt BD 3 exercise bike which is designed to be a desk, where the user can work and exercise at the same time whilst also producing electricity that can power the user’s laptop. Acer stated that cycling at a somewhat leisurely pace of 60 RPM (revolutions per minute) for an hour can generate up to 75 watts of power.
Moving out into the garden, a new solution to tackle water wastage was announced. The Moen Smart Sprinkler Controller can monitor the moisture levels of your soil and tracks local weather conditions. The user can also monitor water usage and estimated savings as well as set up customised watering schedules that take advantage of weather tracking so the sprinkler will not activate if the rain is predicted in the area which in turn will save the user money. Thinking about the UK 2022 summer drought, this kind of solution would certainly help users become more efficient in their use of water, cutting consumption, wastage and cost.
Although not announced at CES, something that has been gathering a lot of momentum recently and will be featured on the spec sheets of many new products revealed at CES is Matter, a new proprietary standard for home automation that has the potential to offer indirect savings for consumers. Matter is essentially Smart Home 2.0. In simple terms Matter is a new wireless standard that should unify the smart home and make operation easier for users. This means that every smart device you may have such as a smart plug or smart light will talk to each other as opposed to how it used to work with each device being locked to that specific manufacturer and then locked to a specific control centre such as Google Home or Apple Homekit. Until now, with non-compatible standards, consumers have essentially been locked into a brand/product’s ecosystem if they want full functionality. However, now the user will be free to mix and match and not worry about losing the functionality of their products because they’re mixing manufacturers, this, in turn, will save the consumer money as they can take advantage of sales rather than having to wait for that one specific product to drop in price as there are always alternatives for every smart home product.
This is by no means a conclusive list of products that can help consumers save on their household utility bills but rather some of the notable ones that we saw coming out of CES2023. There are of course other products either already available or coming onto the market that can assist with saving on energy consumption. From smart plugs that can be turned on and off remotely so helping users cut down on energy consumption to readily available smart light bulbs, which being LED, offer immediate tangible savings over traditional light bulbs.
CES 2023 was a step in the right direction for sustainability and pro-consumerism, with a lot of companies focussing on the overall sustainability of their products and ensuring that energy consumption is kept to a minimum as in these current times saving money on the electricity bill is a must. This all ties in with the increased industry focus on home appliances and energy saving. In the UK trade body AMDEA is educating the home appliance retail sector on how consumers can make savings when using products as part of its highly successful Know Watt’s What campaign in helping combat energy price rises.
In terms of pro-consumerism, one of the most important updates to come from CES 2023 as mentioned earlier is Matter which opens up the opportunity for consumers not to be tied down to specific manufacturers and allows full Smart Home Freedom. Expect smart home brands to be increasingly vocal about their Matter integration and compatibility.
You can read more by Callum Puffett, Marketing Executive by visiting Gekko News Photo by CES
Video game stores have for some years faced the dilemma of how to diversify their offering to stay afloat in a market evolving to become primarily a digital one. Since the launch of the “next generation of consoles” back in 2006, digital downloadable games have been available through the marketplaces of Microsoft, Sony & Nintendo on their respective consoles. However, initially, the list of games available to download was quite limited which benefited retailers as it would not take away business from them.
Fast forward to 2013 and the next generation of consoles were released. The release of these new consoles brought a brand new, more reliable system in place to download full video games over the internet. The ability to download full games happened on the previous generation however, numerous factors attributed to its rather low popularity as it did not have the stability and the large selection of games as it does on the console’s successor.
GAME’s game-changing new direction
The PS4 & Xbox One were game-changers in driving interest in digital games. This meant retailers had to diversify their offerings to provide more than just consoles and video games. For example, GAME is now selling Gaming PCs and a lot more accessories for all gaming platforms. On top of this, they provide access in-store to the Belong Arenas which are equipped with all of the latest consoles and gaming PCs with room for around 6 people to game. GAME is a prime example of a company successfully diversifying its business model to become a more experienced/service-based company. This is due to the nature of the video game market and its continuous push towards the all-digital era.
The new direction GAME is taking features a better value proposition. Martyn Gibbs, Chief Executive Officer recently described BELONG, the Group’s esports and experience-based gaming proposition as “core to our transformation strategy and we continue to expand the business through the opening of larger BELONG gaming arenas while improving our GAME Retail offer to fully capitalise on the strong growth potential in the esports market.” (Waller-Davies, 2018)
This has proven to be successful in driving footfall to their stores with the gaming arenas as proven by the positive recent trading results.
COVID’s accelerating impact on digital transformation
Clearly, a huge impact on the video game retail industry as with all retail was the dramatic impact of COVID. Not solely due to the fact stores were closed, more so due to the change in lifestyle, most people had to adapt to. Logan Plant from IGN described COVID-19 as “not an instigator for the rise of digital media, but simply an accelerator of a trend we’ve seen take shape throughout the last console generation.” (Plant, 2021). Working from home became the norm for 1+ years and subsequently, a lot of businesses had to change how they operated to take advantage of the customers/consumers being stuck at home.
The impact of COVID was a record-breaking year for digital sales of video games. Sony also revealed that nearly 63 per cent of its “full game” sales for the 2020 calendar year came via digital downloads rather than games sold on discs at retail.
As a result of COVID’s accelerating impact, it is important to reevaluate the current proposition and business direction of video games retailers. The current moves console developers are making into the all-digital era are having a dramatic impact on the performance of bricks and mortar retailers. A significant development happened in 2020 when the latest consoles were released (PS5 & Xbox Series X). These new consoles were released with a cheaper variant; a disk tray-free model with a cheaper price tag available from launch. This highlights the increasing dominance of the digital era and the ongoing decline of physical sales.
Owen Good from Polygon described it in stark terms: “The implication is clear: Video game fans, stuck at home, with the ability to make one-click purchases for entertainment to pass time, will do so in amounts up to the price of a full game.” (Good, 2020)
As an avid Gamer myself who has been a loyal customer of GAME since I could remember my weekends used to involve regular trips to pick up a new game or the latest console at the time. Interacting and talking with knowledgeable staff members was a huge part of the experience.
Embracing an experience-centric playbook
Despite knowledgeable in-store staff that can assist and support the customer journey, the gaming industry has changed to be a primarily digital one. However, despite this reality, there’s still a significant percentage of customers purchasing physical copies of video games. Yet the online giants such as Amazon have further eroded this market, offering next day delivery on the same selection of physical video games that high street retailers offer at a discounted price.
The same situation is happening with Gamestop, in an article covering which companies would Amazon effect, it stated Gamestop “historically has made its money by serving as the middleman, but the game publishing industry’s move toward downloads and away from discs and cartridges is increasingly making the venue less of a destination for gamers.” (Brumley, 2019).
This of course reduces the need to pop into town and purchase a game. Additionally, on top of the physical video game competitors, each of the gaming platforms also have their own store integrated into the console where you can purchase digital copies of any game on that platform. Digital games usually have a higher RRP, however, they are usually heavily discounted during sales.
In conclusion, it’s clear to see that for retail stores to drive more footfall they need to reposition themselves and expand what they offer as a business. GAME have taken this in their stride and expanded their traditional offering of physical Video Games and Consoles to offer an immersive customer experience including VR, the opportunity to play video games with your friends in the Belong arenas, purchase fully built gaming PC’s along with the necessary accessories and gaming merchandise such as POP Vinyls or plushies. It has been proven that GAME’s new direction has driven footfall and has been profitable for them too. In order to win in the future and remain relevant, it’s time for video games retailers to embrace an ‘experience-centric’ playbook.
IFA Berlin has been a feature in my calendar for many years, and since 2015 I have been reviewing the event for ERT. Unfortunately the 2021 incarnation didn’t happen as many brands were pulling out and therefore made the event unviable, but I’m confident that the show will be back with a bang next year! To quote the organisation itself “IFA in Berlin presents the latest products and innovations in the heart of Europe’s most important regional market. Only IFA offers such a comprehensive overview of the international market and attracts the attention of visitors from more than 130 countries each year”. Looking back to 2019, LG showcased its Roll, the OLED TV that rolled neatly into its own cabinet to disappear from view. Here in 2021, it is now available to buy at a princely price of just over £100,000, which is of course out of the reach of most people. However, an important consideration is, would it have ever been conceived if it wasn’t intended to be a showstopper at IFA? Whatever the reasons LG chose to create this stunning piece of kit, the brand has paved the way for others to now copy the concept and intrinsically bring the average price down to make it the de facto TV form factor for many. So proof in point that IFA is the innovation hot spot that drives brands to go deeper and further in understanding what consumers may need before they even realise it, creating categories and technology which will in time become commonplace to all.
Smart Everywhere
In 2015 the buzz was the smart home and there were many who huddled around brand displays at IFA gasping at what was possible with connected devices. Each year the innovation developed and today it’s almost nonsensical to consider that any home doesn’t have or want smart devices – from TVs and voice-activated speakers, to security and entertainment solutions – in their possession. Taking a whistle-stop-tour of the years and it’s a similar story of innovation, but a progressive journey for the Berlin showcase to evolve into something fresh, never boring or the same. Those exhibitors never failed to deliver a great experience and their immense pride in showcasing their new technology was clearly evident. Surprise and delight did many brands from all categories, and in 2016 it was LG which outdid everybody with its walk-through 4K display tunnel. This took the visitor on a truly immersive journey of LG technology with a beautifully executed experience that became the undisputed talking point of the event that year.
Voice Of The Future
Moving on to IFA 2017, I reported that the ‘vibe’ was one of progress, a move forward, improving what is already available, innovating through integration to bring the smart home closer to normality and Artificial Intelligence (AI) truly recognised by consumers as no longer being the domain of fantasy but reality, with compatibility across more products. This became rapidly more realistic over the following two years. In 2018, Google’s Assistant was all over Berlin as more and more brands were building voice activation into their products. Assistant-enabled products were popping up across a host of categories. From laundry with Hoover Candy, cooking with Electrolux, to smart watches from TicWatch, thermostats from Netatmo, and doorbells from Ring, the tech also extended to TVs from Toshiba, Hisense, LG and Panasonic. The dominance of voice assistants was most definitely the story that year. Building on this in 2019 was the prevalence of voice control and AI-controlled products. Almost every brand and category has either one or both of the two leading voice assistants becoming inbuilt and connected, increasing the smart home ecosystem across almost every device, MDA and wearable. What voice has done to bring AI and smart technology into consumers’ lives is quite possibly one of the most disruptive technologies to have been created, changing how we interact with our technology, its interface and what it can do for us from a social and macro perspective. This was evident in the exhibition at IFA 2020 – which was an extremely smaller, intimate and socially-distanced affair. The event organisers had done a superb job at keeping the CE industries key event open, albeit just to trade visitors and not the general public. The effects of the pandemic were recognised and obvious as a driver of investment in R&D. The key shout-outs last year set a trend for brands seeking to be the first choice for consumers to integrate with their smart home.
See You In 2022!
If you consider that in the five years that I’ve been writing about IFA, excluding 2021, the average attendance per year is 245,000 with an estimated 150,000 coming from trade to visit the almost 1,800 exhibitors. It’s an awesome show on a scale that makes it on par, if not better, than its transatlantic rival. The need for IFA to return in 2022 in its original format is essential for the industry, however I fear the savings made over two years may encourage many brands to scale back attendance and investment. This approach will inevitably mean a new format and potentially a hybrid event on a smaller scale. The impact of this approach may not only hold back creativity and innovation, but also the ability for start-ups and consumers to be inspired to carry the wave of technological innovation. Whatever becomes the format for 2022, creating a space like IFA to bring innovation together and measure the reaction of your peers and consumers is key in the evolution of categories – existing and new. What the pandemic achieved for brands was an opportunity to reset, rethink and enhance their proposition to meet the needs of people’s changing lifestyles, which as a result have become ‘normal’. The use of home technology has been impacted immensely, with adapted living spaces supporting various changes in lifestyle. And IFA is crucial to this development. I hope to see you and maybe several hundred thousand more in Berlin, 2-6 September 2022 at the most inspiring global tech event imaginable!
As consumers were forced online, bringing back a sensory experience through a carefully considered customer journey, is where independent retail is amongst the best says Daniel Todaro from Gekko.
It’s been a tough few months for all retailers but we’re back and now more than ever the customer experience is the tool many retailers must be reaching for to recapture shoppers and remind them what they have missed.
Based on findings from the CBI, retail sales have risen above seasonal norms for the first time this year. The reopening of non-essential stores in England and Wales brought relief to the sector. April’s retail sales volumes were viewed as “good” for not only the first time this year but also since June 2018, according to the CBI’s latest monthly Distributive Trades Survey.
After reopening on the 12th April, the early signs suggest that shoppers were particularly eager to visit fashion retailers, and on the day, spending on clothes was double the typical pre-pandemic level. Furthermore, the figures are stronger than when stores reopened after the first lockdown in 2020. The number of people shopping online in the past month fell for the second time in a row, and while it is still strong, the rate is half what it was at the height of the pandemic. The data points to a growing sense that the worst of the pandemic is behind us, and people are becoming more comfortable with venturing out to stores.
Retail will undoubtedly regain its mojo over the coming months and if as hoped we are out of complete restrictions this summer, it should rebound and take full opportunity as the burden of these rules no longer apply. It’s going to be different and it will no doubt continue to evolve but retail as one of the most dynamic industries, has always done this. It evolves to meet the expectations of generations, trends and attitudes. Brands and retailers must therefore work to create more experiences spread across a wider space to offer consumers an immersive experience that makes a customer buy from your store and continues to do so, wanting to visit again based on the experience received.
Since reopening we have already seen a 12% shift from online to the high street in the first two weeks. Whilst the growth will have added to the overall online retail space, consumers are increasingly bored of online shopping just as they are Zoom calls. For the entire nation, lockdowns forced us to shop online whether we liked to or not. If we wanted that thing for that purpose, customers had to go online and research, buy, deliver or collect and in many cases return it because it wasn’t right. Whilst this may have felt convenient for some, this meant that for many the sensory experience was immediately banished to a 2D experience and brown boxes dumped on our doorstep.
Human nature is to be stimulated through a sensory experience and even for those with no real passion for shopping, I suspect they have missed some of the pleasures that physical retail offers. In specific categories, this is enhanced more than others such as considered purchases in the MDA and CE categories. Sustainability is another factor many will be considering now that they have a choice. Our increased carbon footprint created by ordering items that have travelled several hundred miles will once again prick the consciousness of all of us as we look to increase our sustainability initiatives, not increase them with unnecessary additional miles and packaging.
We are gradually coming out of lockdown and consumers continue to be excited about it. Indeed over 85% of consumers from our latest retail survey results claimed that they have already taken advantage of physical shops being open to make purchases. They are emerging with a determined mind-set, using their newfound online skills to narrow down their options before heading to the store to browse and make the final purchase.
The retail environment is changing and has been particularly fluid over the past year. This data is critical to understanding the new trends that have emerged and forming (or re-forming) brand strategies. Insight from Kantar, online shopping fell in April for what was the second time in a row, and Springboard footfall data showed an increase of 88% week on week for the period that non-essential retail reopened after the 12th. All of this points to the fact that there are more shoppers out there than there have been for 14 months, so there is a chance here to connect with them while confidence is high and a (hopefully) high-spirited summer begins.
The online share of retail sales is decreasing, although the benchmark remains above the pre-pandemic figure, settling at about 36% in April vs 23% in 2020. This of course indicates the acceleration of a trend that has been growing for a while, but it does mostly remain product specific, and nothing will ever really replace the experiences that in store shopping can offer. The store should now become more of an experience hub as well as a purchase point. In-store marketing continues to have the power to not only increase actual sales, but also other key factors such as brand loyalty and even helping to drive social media interactions.
When it comes to consumer electronics and large appliances in particular, many consumers will always prefer to touch a product and hear about its benefits first hand rather than reading a specification sheet online. Hearing their input, from questions to reasons for purchase, can then be fed back directly to a brand, enabling them to react and stay ahead of the competition.
In this new age of retail, the smartest businesses will be the ones that can leverage the opportunity to reach consumers at every level relevant to them, and that is where effective brand experience and a carefully curated customer journey can step in to help exceed your customers’ expectations.
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Every business has been forced to change in the past year, it doesn’t matter the industry you are in. Retail is no different, but unlike others, it has always been a dynamic industry at the forefront of responding to consumer trends and the manner in which people want to consume things. Retailers have always understood they are at the vanguard of that change. This past year has truly focused the mind on this and the need for innovation like never before.
It’s not just about entirely new initiatives. Many trends that were already taking place have had their roll out compressed from years to months. Here are five innovations that the pandemic has speeded up that can offer a pathway to sustained growth to those who take advantage.
1. Click and collect
There is renewed and growing enthusiasm for click and collect. In part that’s linked to the general increase in online shopping but it’s also because of the convenience and importantly the hygienic, social distancing aspects. A pandemic trend that is set to stay, it is now an embedded part of many consumer journeys, especially in grocery shopping, but also increasingly in all non-essential retail. Our own research has shown that over 35% of people want to see this trend continue even after the pandemic. Click and collect certainly appeals to more sustainability-focused customers. These shoppers want to shop online but also have a focus on sustainability with concerns about the environmental impact of the deliveries in terms of the distance travelled and packaging. Retailers should think about how to maximise the opportunity to boost profitability. An obvious example being upselling products in a collection environment.
2. Using Augmented Reality to assist big ticket purchases
As we can see from the figures post-lockdown, physical retail has an enduring appeal with huge pent up demand being realised. However with more consumers having been forced to buy higher ticket items online, smart brands are looking at new technology to fuse the offline and online world and assist sales. Ikea is a brand that has always focused on innovation and disrupting the traditional retail experience. They made a smart play last year, acquiring AR imaging startup Geomagical Labs. The intention was to drive shoppers to purchase more big-ticket items without always needing to visit a store. Its technology allows a user to quickly scan a room using any smartphone, render that into a panoramic 3D picture in a few minutes, remove all the furniture in it and then add in new items to scale, helping shoppers picture products ‘in-situ’. This will be implemented by Ikea into its website and apps to let people start to create accurate visualisations of their spaces, and how they would look with Ikea pieces in them. While the technology remains nascent, other retailers should definitely take note.
3. Joining up the omni-channel experience
Ecommerce has been a big winner from this past year with millions more now comfortable with shopping online. However the experience remains disappointing for many. A recent survey by Ayden found that more than two thirds (68%) of Brits say they will now not shop with organisations if they had a bad experience either online or in store (an increase of 18% since June 2020). Meanwhile, 53% believe retailers need to do more to link their physical and online stores. Invariably the offline and online experience is not joined up and inconsistent. Too often the focus online is based on the ‘what’, product specs, price etc without thinking about the ‘why’ a consumer wants a product. Smart retailers and brands know it shouldn’t be the ‘channel’ that is the focus but the customer experience, which is then realised across all its touchpoints. Starting with an audit across all channels, brands need to ensure they are visible and joined up. The evidence shows brands who are joined up have succeeded over the past year.
4. Training the experts at scale
A key element of the formula for success instore is a shopper’s engagement with retail sales advisors. Are they proactive, helpful, skilful, knowledgeable, and capable of providing a personalised experience? This is something the online experience can’t replicate and physical retailers need to capitalise upon. Much is down to individuals, their training and management the retailer provides, but when it comes to talking about a brand and its products it is vital they are informed, motivated and most importantly advocates. This is often down to brand led initiatives and while in the past these experiences were provided in person, the pandemic has forced new innovative ways through virtual training being offered with face to face communication not being possible. For example Gekko has developed a new digital learning and engagement platform for brands to talk directly with Retail Sales Advisors, allowing them to choose when and how they learn, with gamification and incentives driving uptake. It’s meant we have been able to train many more staff members and have far more impact. While we will still be visiting face to face – a hybrid model will be our new way of doing business. A bit like peoples’ changed working arrangement, it’s taken a major event to force through a sensible and more efficient way of doing business.
5. The advisor’s new domain – the video call as well as the shopfloor
While digital methods are proving successful to train more instore experts at scale, the digital world can also be utilised to provide direct expert assistance to those making a considered purchase. Curry’s are one brand who tried a new approach during the pandemic with the ShopLive service offering expert advice to assist the sales process. A popup appears asking if you need buying advice, but rather than the experience being a frustrating one with a generic chatbot, shoppers can then start a one way video call with one of their experts. ShopLive now has over 800 ‘tech-perts’, aiding customers through their essential tech purchases. Each new expert goes through two days of specialist training to ensure they can help customers with every tech query. While a face to face conversation with a live product demo and test will always be the best way of answering any customers’ needs, this certainly can aid the sales process for those who would still rather not venture out or can’t for any reason.
Despite the atypical nature of the past year, we have seen many retailers react to the adversity with typical dynamism. The changes and digital transformation that has taken place will in the long run only be a good thing for the industry. A lot of the confident retailers have really begun to find their voice and discover a new way to navigate these uncertain, but exciting waters.
The New Year in tech wouldn’t be the same without CES, the Consumer Electronics Show held in Las Vegas between 7th – 10th January attended by almost every established tech brand, start up brands, incubator and brand on the periphery of technology with something to showcase. The products on display range from the expected to the unusual, as in the case of sex tech, which for the first time seems to have found its place and acceptance at CES. As indeed has Ivanka Trump, who was controversially invited to headline as the keynote speaker when arguably there are far more qualified females, actually from the technology sector, rather than this particular privileged individual.
CES welcomed over 175,000 visitors to see over 4,500 exhibitors and 1,000+ speakers making it quite a big deal within the technology industry. It also means lots of product and innovation announcements, such as the smart shower head with Alexa built-in from Kohler, a smart frying pan that analyses your food whilst you cook it from SmartyPans, to autonomous vehicles from the now established brands in this sector and not so with Sony launching its autonomous vehicle prototype named Vision S. The vehicle is a prototype designed to show off the firm’s sensors and in-car entertainment technologies. The dashboard is flanked by an ultra-wide panoramic screen for driving information and entertainment. However, Sony did not indicate that it had any plans to sell the car to the public with Sony’s chief executive Kenichiro Yoshida only stating “We will accelerate our efforts to contribute to the future of mobility”.
Do you Uber? Well in future you may be doing so in the Uber Hyundai flying taxi. The S-A1 concept is an electric powered aircraft with four rotors for vertical lift off and landing and conceptually able to travel at a maximum speed of 180mph carrying four passengers. Flying autonomously at 2,000ft for a maximum of 60 miles, it may be zipping across a city skyline near you in the not too distant future.
Surveillance related technology seemed to be big this year with multiple brands showcasing security equipment such as cameras, doorbells and motion sensors, which is really rather boring and perhaps only serves to feed the paranoia of those who fear the worst. Loosely connected to this category is one of my favourite products to be announced, a smart mailbox developed by Canadian company Danby, which addresses the common problem of parcels thefts and re-deliveries. The device would assist in reducing the carbon footprint of our propensity to order online for delivery rather than buy in-store. The smart mailbox will apparently go on sale in the UK later this year offering a box which has an anti-theft drop-in slot for smaller packages opened with a code or smartphone app. The app will also be able to place phone calls between a parcel courier and a customer if they need to open the box remotely. I suspect this will get simplified should usage increase amongst users and online retailers.
Samsung’s Ballie – a tennis ball-like robot that rolls around, following its owner with a built-in camera to capture and store ‘special moments’
Another neat headline grabber announced at CES 2020 was the Samsung tennis ball-like robot called Ballie. It beeps and rolls around, following its owner with a built-in camera to capture and store ‘special moments’. Ballie also acts as a fitness assistant, can help with household chores, and activates smart home devices such as robotic vacuums when it thinks something needs to be cleaned. However, in common with the Daleks, it will find stairs a challenge! No release date has been announced, however AI and 5G are the main focus for Samsung in 2020 and not Bixby, as had been much hyped last year. Another product launched by Samsung and to be available in the UK and US later this year is the Sero TV, a rotating TV which connects to your phone. Perfect for Generation Z or those who spend equal time watching on a small device as they do TV. It can be rotated from landscape to portrait and is only available in a 47” 4k screen and estimated to land at £1,200.
Another twist on the laptop came from Dynabook. Majority owned by Sharp and formally Toshiba, the brand that launched the world’s first laptop computer in 1985, Dynabook has delivered another first with the world’s lightest 13.3” laptop. Weighing in at an impressive 0.9kg and sporting a nifty 10th gen Intel Core U-series processor the Portege X30L-G is built using a magnesium-alloy chassis and includes a full-size HDMI. With Gigabit Ethernet, up to 24GB memory and Wi-Fi 6 the device also includes a TPM 2.0 IR camera and fingerprint reader.
Not to be outdone was Lenovo with its ThinkPad X1. A dual/ folding screened laptop with an Intel processor that runs Windows on a 13” screen when unfolded. It is slated to arrive mid 2020 in the US at a price of $2,499 with no word yet on UK pricing.
In fact, there were a rash of foldable screens on display this year and it certainly seems to be a trend not looking to abate soon, making 2020 potentially the start of a flexible decade. Foldable screens were launched on devices from turkish brand TCL and its prototype Foldable Phone (no name as of yet) and Dell with two concepts, the Duet – Foldable Notebook and Ori – a Foldable Device, unfortunately no plans to release these have been indicated. The much publicised Motorola Razr foldable phone was on display which has been available for pre order since December but was set for released during January 2020.
As you can imagine, smart speakers and assistant-enabled products were everywhere at CES 2020. With over 46 third-party Google Assistant-endabled products and 40 Amazon Alexa ones, it made the presence of both brands more notable throughout the show, with Google creating theatre to engage, as they do best.
Google revealed, for the first time, user numbers for the services is at 500 million people in a month and also a whole range of new features enabling users to schedule certain tasks with other connected devices. The features will allow users to, for example, schedule the washing machine to start its cycle at 6pm and also upload contacts from your phone to your Google Nest Hub.
Users will also be able to leave Sticky Notes on the screen for others in the house to see and have the ability to control 20 different types of devices through Google Assistant, which is needed with the increasing third party product partnerships.
Dynabook has delivered another first with the world’s lightest 13.3” laptop. The Portege X30L-G weighs in at an impressive 0.9kg and sports a nifty 10th gen Intel Core U-series processor
Now we are all busy people and many time saving devices were on show but two stood out to me. The first will make sure we never need to drink a warm tinny again. The Matrix Juno supercooler is a kitchen countertop device priced at £300 which uses a thermoelectric cooling engine to absorbs heat using electricity known as the Peltier effect. It can cool a can of beer from room temperature to 4oc in two minutes or a bottle of wine to its desired 9oc in five minutes.
The other is the Y-brush toothbrush from FasTeesH designed to clean your teeth in 10 seconds. It’s a mouthguard type contraption packed with bristles that vibrate to clean all your teeth at the same time, arriving in March at around £100. I can’t help but think that making time by speeding up the process of cleaning your teeth has never been a priority for many, the cleaning is what counts.
Not wanting to ignore the most progressive news at CES this year, I think it important to highlight and applaud the CES organisers decision to now formally allow sex tech brands to exhibit at CES in 2020 after many years of exclusion. What this means is that sex tech companies are on the same playing field as all but in particular the established tech giants. However, there are exclusions with those companies exhibiting sexual wellness products having to agree in addition to the CES’s standard contract and rules also a separate sex toy addendum.
Why is this a progressive move? It’s predicted to be a $50 billion industry by 2025 and as taboos tumble and generations embrace a pragmatic approach to sexuality and sex, it’s an industry sector the ‘big players’ may wish to enter and penetrate as a lucrative growth market.
With so many new products announced at CES 2020, what does it mean for retailers? And how must they adapt to innovation across existing and new categories? Experience. Consumers are looking to experience innovation in order to make educated purchasing decisions. Whether that be by seeing a foldable screen in their hand to believe it, engaging with a personal robot to realise its value to them as a user or see that TV rotate 180 degrees, it’s all about the in-store experience a retailer can create where no online retailer can.
Innovation needs to be experienced live, not online and the retailers who can identify with this can cut through to make the tills ring by giving the customer an experience worth coming back for and spreading the word. People are never going to stop shopping on the high street. It’s just the way they shop and where they are do it that has changed. Retail, as an industry, is vital to the global economy, so as we enter a new era of high street retailing, my advice to brands is: Always let consumers ‘live’ the experience and feel the brand.
As high street retail continues to deplete and more people shop online, increasing to 19% of all retail sales in December 2019*, a new report by retail marketing experts Gekko shows there’s increasing consumer concern about the environmental and societal impact of this transition and a marked difference in attitude depending on age.
The younger generation may tout their eco credentials but they are more easily lured into wasteful spending and shopping online with over half (53%) of 18-24 and 46% of 25-34 year olds admitting to being tempted into buying things they don’t need online, with just 19% of canny 55+ year olds saying the same.
More than five times as many 18-24 as 55+ year olds admitted to regularly buying goods online that they regret, so return them – 17% versus just 3%. And 45% of 18-24 and 42% of 25-34 year olds also admitted to being wasteful buying items they didn’t want and failing to return them, compared to only 17% of older consumers.
Surprisingly and despite the high profile of Extinction Rebellion and Greta Thunberg, younger shoppers make less conscious choices than some may think about the environmental impact of online shopping versus older consumers. In general, 73% of consumers are concerned about excess packaging associated with online purchase and deliveries and 74% are worried about the amount of single use plastic in packaging.
However, just over a third (38%) of 18-24 and 33% of 24-35 year olds are unconcerned about the use of excessive packaging. This compares to 19% of over 55 year olds. And despite it being such a huge national issue and talking point over the last year, 34% of 18-24 year olds and 31% of 24-35 year olds aren’t concerned about single use plastic, versus 19% of over 55 year olds.
Even the gig economy does not seem to be a problem for the generation arguably most likely to be more exploited by it, with 50% of 18 to 24 years olds unconcerned about online shopping increasing it versus 33% of 55+ year olds. And 44% of 18-24 year olds don’t fret about the impact on the High Street and local economy of online shopping, versus 23% of 55+ year olds.
According to Daniel Todaro, MD of Gekko: “Younger generations spend more time online and are therefore less inclined to resist that impulse buy. They are far more likely to buy things they regret, order more than one size, items they never intend to keep and send the goods back, but this convenience has an environmental impact.
“The future of the High Street is a vital societal component and offers a more ethical approach to shopping. If you can try before you buy there’s less transport, packaging and waste without the need to order multiple sizes or colours of the same item. The High Street sustains the heart of a community, no shops means no point heading to the High Street – there’s only so much coffee a community can afford or want to drink.”
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