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Consumer Retail trends

Clicks and Cliques: Understanding Modern Shopper Tribes

Knowing your customer is essential in the best of times. In a post-pandemic world, it will be the difference between survival and failure.

I had the pleasure to work with Klarna on their latest report Clicks and Cliques: Understanding Modern Shoppers where we identified five distinct shopper tribes for the post-COVID world. Based on a survey of 4,000+ consumers across Europe, the UK, USA and Australia, the report examines how shopping behaviour has evolved and how retailers can stay relevant in a fast-moving world.

Good value for money is naturally a top priority for shoppers this year, with more than two-thirds (67%) suggesting it has become more important since the start of the pandemic. It’s followed by promotions and deals (60%), a good reputation and trustworthiness (60%) and having a wide range of products available (58%) — perhaps fuelled, in part, by shortages on the shelves earlier in the year.

Over half of respondents said that an easy returns process (55%) and next or same day delivery options (51%) have become more important this year — naturally coinciding with 49% doing more of their shopping online and 44% doing most or all their shopping online now.

The ability to pay flexibly has also grown in importance, according to 45% of respondents — and this can be a real dealbreaker. Four in ten (42%) prefer to shop from brands or retailers that offer flexible payment options, while three in ten (32%) won’t shop from those that don’t.

Commenting on the research, Luke Griffiths, CCO at Klarna, said: “This year’s events have transformed the way we browse and buy, reinventing our relationships with brands and retailers and accelerating change at an unprecedented rate. Merchants must keep a finger on the pulse of their customers wants and needs and adapt their products and service offers accordingly to build a connection with shoppers to drive loyalty and, ultimately, sales.” 

Natalie Berg, Retail Analyst and Founder of NBK Retail, added: “The retail industry is no stranger to disruption, yet nothing in our lifetime has jolted the industry like Covid. As retailers look to navigate the new normal, resilience and agility will be essential for survival. There will be no return to the status quo. The days of being everything to everyone are well and truly over: in order to find their tribe, retailers need to be bold about who they are and what they stand for. Opportunities have emerged, enabling retailers to reimagine both physical and digital commerce for the future.”

Download the full report here.

Categories
Retail trends Store of the future

The Retail Exchange Podcast: 2020 Review & 2021 Predictions

Natalie Berg joins Karl McKeever, MD of Visual Thinking, as co-host of The Retail Exchange‘s final podcast episode of the year. 

If you were trying to end this year by winning a prize for its greatest understatement, you could describe 2020 as ‘eventful’. It is difficult in many respects to argue that 2020 was an especially good year. Emerging trends didn’t just gather momentum, they marched forward to turn the industry on its head in ways we could never have imagined. For retail, it’s been a year of contrasting fortunes. Some have faltered. Others have thrived.

To set the tone, we revisit some of the interviews and discussions that have shaped The Retail Exchange’s podcast episodes in 2020, with special co-hosts Karl McKeever and Natalie Berg reflecting on the past year – the challenges faced, things we’ve learned, the opportunities taken – and looking ahead at what’s to come in what we all hope will be a brighter 2021.

You can listen to the full episode here.

Categories
Retail trends

Future of Retail 2020

What will shopping look like in 2021, 2025 and 2030? I had the pleasure of speaking to Raconteur for this annual supplement in The Times. Always an interesting read but especially this year given that we are in the middle of a pandemic that has upended the industry like nothing before. You can catch my thoughts in the following sections:

You can download the full PDF here.

Categories
Retail trends

DTC: 2020 Review and 2021 Expectations

Ding dong, Avon calling!

The direct selling channel is one of the few bright spots in retail right now. But how does a model that is based on human interaction adapt to today’s challenge of social distancing?

This week, I had the pleasure of chairing a roundtable discussion hosted by the Direct Selling Association and the opportunity to learn more about this £2.7 billion-a-year channel of UK retail where products are sold directly to consumers outside of a fixed retail environment.

Panellists included:

  • Cliff Jones, Sales Director, The 1:1 Diet by Cambridge Weight Plan
  • Peter Kropp, Global Director, The Body Shop at Home
  • Alessandro Martinez, Managing Director, Vorwerk UK
  • Susannah Schofield OBE, Director General, The Direct Selling Association
  • Andy Smith, General Manager, Amway UK & Ireland and Chair, The Direct Selling Association

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Here’s what the direct selling channel gets right:

Agility. Direct selling is an inherently nimble, flexible, and low-risk channel. One thing that has become clear this year is that necessity is the mother of invention so when the pandemic hit, at-home demonstrations and shopping parties quickly went virtual. The panellists believe that this blended experience will stick post-COVID as online and offline worlds continue to merge. Pandemic pivots have actually enhanced certain aspects of the CX and enabled brands to reach a broader customer base.

Community. The panellists all stressed the importance of selling an experience, not a product. Moving beyond the transaction to build a community and foster a sense of belonging is going to be vital for traditional retail as we move into 2021. The pandemic has reinforced the importance of strengthening community in a digital setting – an active online community that swaps ideas, recipes and advice will garner greater loyalty in the physical world.

Brand evangelism starts internally. The very nature of this model grants its ‘consultants’ a significant amount of autonomy which empowers and enables them to offer a highly personalised, relevant experience to customers. The panellists stressed the importance of authenticity here – consultants are the brand’s first customers; if they don’t believe in the product, they’re not going to not sell it. We must not underestimate the importance of training and supporting consultants/staff. They are the face of the brand and, ultimately, retail’s most important asset.

Some important lessons here for the wider retail industry as we begin to emerge from this crisis. 

Categories
Consumer Retail trends

Peak Car And The Hyper-Local Retail Opportunity

In my latest long read for Forbes, I explore how London’s green recovery will create opportunities for local retail:

Across the UK, city streets are quietly undergoing radical transformation. Temporary cycle lanes have popped up, footways widened to enable social distancing and, perhaps most drastically, residential roads are being blocked to through traffic. Since May, over 200 of these “low-traffic neighborhood” (“LTN”) trials have launched as more than 50 councils take advantage of the £250 million of emergency “active travel” funding from central government. The vast majority of these LTN schemes are in London. Full disclaimer: I live in one.

Full article can be accessed here.

Categories
Amazon E-commerce

They know exactly what you want. Can anyone stop Amazon’s domination?

What is the secret to Amazon’s success in a nutshell? A relentless dissatisfaction with the status quo. Love or loathe it, we have to credit Amazon for stamping out complacency in retail. Fast and free delivery, one-click shopping, user-generated reviews, checkout-free stores, voice shopping, the list goes on. If Amazon didn’t exist, shoppers today would be far more tolerant of mediocre retail experiences.

Covid-19 has further fuelled its appetite for disruption. This week Amazon hit the nuclear button. By offering free delivery of groceries, Amazon is capitalising on a once-in-a-lifetime opportunity to acquire market share. This is the boldest move it has ever made on this side of the Atlantic, and the worst possible news for the supermarkets who were finally getting comfortable with online deliveries in the middle of a pandemic.

Read the full piece in the Evening Standard.

Categories
Store closures

COVID-19’s Devastating Impact on Retail Jobs

Last night, I spoke to the BBC about the 12,000 job cuts announced in the UK this week. Retail will certainly not be spared: Harrods, an iconic brand but reliant on international visitors, and Arcadia, a retailer that has quite simply failed to evolve, are collectively cutting 1,000+ jobs. TM Lewin, a brand that has been trading for over a century, is closing all of its shops and focusing exclusively online. Microsoft will be doing similar by shutting virtually all of its stores around the globe. Will 2020 see a reversal of the online-to-offline trend?

Who’s going to be hit worst? Those that failed to adapt pre-crisis of course. We’ll see an acceleration in the demise of mediocre or irrelevant retail. Buckle up, folks. It’s going to get a lot worse before it gets better.

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Categories
Consumer Retail trends Store of the future Technology

When Non-Essential Stores Reopen, Will Shoppers Accept The Friction?

As Britain’s ‘non-essential’ retailers prepare to reopen their doors in the coming weeks, one of the biggest challenges they face will be convincing shoppers to walk through the door. And, no, I don’t just mean from a safety perspective; I’m talking about the additional friction that shoppers will inevitably encounter.

Will customers queue up to enter a department store? Will they want to pop in to a clothing store if they can’t try stuff on? Will they accept less choice on shelves as retailers make space for social distancing measures? If they have picked up a book off the shelf, will they remember to then place it on the special quarantine cart? This might all be worth the hassle – if there was no such thing called the internet.

Don’t get me wrong. Bricks & mortar retailers should get a much-needed initial boost when they reopen. These are uncharted waters, but pent-up demand must be a given when consumers themselves are pent up for months. We are social creatures, and the notion of ‘going shopping’ is inherently a leisure activity. The high street retailers that have thus far survived the so-called ‘retail apocalypse’ are those that focus on all the things shoppers can’t get online – inspiration, discovery, curation, community, experience.

In my latest for Forbes, I explore how this will look in a post-COVID world. Has ‘experiential retail’ finally been relegated to the buzzword archives? Has a pandemic killed the art of browsing? You can read the full article here.

Categories
Consumer Uncategorized

Coronavirus – What Retailers Do Now Will Define Them in the Future

As 21st-century consumers, we’ve gotten used to having the world at our fingertips. Then seemingly overnight, all the stuff we take for granted is in question – access to healthcare; groceries on shelves; the ability to travel, go to school, socialise with friends.

The fear of getting ill, our loved ones getting ill or the uncertainty of it all has led to unprecedented levels of panic buying.

Essentials like hand soap and toilet paper disappeared from shelves and retailers began rationing goods like pasta and tinned vegetables. This weekend, I spent 15 minutes staring at my laptop screen as I waited in a virtual queue to order groceries, only to find the next available slot wasn’t for another week.

This might sound trivial. I am, however, self-isolating because of a cough so I’m even more reliant on online deliveries than normal. I suspect I’m not alone.

Retailers have been remarkable in their response, forgoing any hint of usual competitive behaviour to serve their communities. Staff are on the front line, doing their best to keep shelves stocked and alleviate concerns about potential food shortages. But uncertainty breeds irrational behaviour.

Retailers have therefore had to make some very difficult decisions. Aldi, for example, is limiting shoppers to four items of everything it sells. Ocado, meanwhile, has effectively closed its doors to new customers. Unable to cope with the surge in demand for online groceries, Ocado is exclusively serving existing shoppers – a risky but commendable move.

What retailers do today will define them in the future, whether that’s converting perfume factories to make hand sanitiser like LVMH or turning car parks into coronavirus testing sites like Walmart.

In the UK, Lush was the first high street retailer to take action against the virus, encouraging shoppers to come in and wash their hands without any pressure to make a purchase.

In recent days, there have been numerous examples of retailers putting people before profit. Frozen food retailer Cook is offering customers a free frozen meal to take to an ill or elderly neighbour. Some supermarkets such as Carrefour in France and Iceland in Northern Ireland have begun opening earlier exclusively for the over-70s. To protect its staff and the community, Patagonia was one of the first retailers to shut not only its shops but its ecommerce operations too. Meanwhile, Morrisons will begin paying its small suppliers immediately to help them with cash flow during the outbreak.

Tip of the iceberg

These are unprecedented times. In the coming weeks, as self-isolation becomes more prevalent in a bid to slow the spread of the disease, what might this mean for retail?

First, as we’ve seen in recessions or in fact any period of prolonged uncertainty, consumer behaviour changes instantaneously. We drop right down to the bottom of Maslow’s pyramid, covering our physiological and safety needs.

Major banks have promised relief to consumers by increasing credit limits, waiving fees on missed payments and offering payment holidays on loans and mortgages. Get ready for discretionary consumption to largely shut down. But even without financial constraints, it’s hard to imagine shoppers wanting to splash out on a new jacket or skirt when they might, quite literally, have nowhere to go.

The coronavirus outbreak has had an immediate effect on travel retailers such as WHSmith, which issued a coronavirus-related profit warning; the retailer is bracing for sales at UK airport shops to drop by over a third in March and April. Cineworld, meanwhile, has said the outbreak could ultimately result in the world’s second-largest cinema chain going out of business. This is, unfortunately, just the tip of the iceberg.

However, as consumers prepare to cocoon, perhaps there will be some silver linings. Retailers should be prepared for consumers to swap physical shops for digital storefronts, cinemas for Netflix, restaurants for takeaways and, perhaps for some, the gym for a Peloton-esque experience at home. April is officially National Home Improvement Month – with millions of people stuck indoors there’ll be plenty of opportunities to get those DIY projects done.

Perhaps the supermarkets could offer pre-packed grocery bundles to consumers affected by coronavirus. We’re already seeing new consumer groups trial grocery delivery for the first time. How will online retailers cater to new demographics? Will we see a longer-term shift to frozen food? Electricals retailer AO.com said freezer sales jumped 200% in the first week of March, while Iceland has also seen an uplift in sales as shoppers stock up in case of self-isolation.

Social distancing will require the world to temporarily slow down, but perhaps that in itself is not such a bad thing. In China, CO2 emissions have been around 25% lower than normal over the past month. This could prove to be a meaningful time for reflection, to live a simpler life – enjoying cooking, reading, spending time with immediate family. Trend forecaster Li Edelkoort believes coronavirus will result in a “quarantine of consumption”, allowing humanity to reset its values. Then again, it might just result in a lot of divorces.

Uncertainty may lie ahead, but retailers play a vital role in helping local communities through this crisis.

A version of this article originally appeared on Retail Week.

Categories
Amazon Retail trends Store of the future Technology

Amazon Go Grocery – Learning From Tesco’s Fresh & Easy Failure

Picture this – a radical new grocery concept designed to revolutionize how Americans shop. The store is much smaller than your typical supermarket, around 10,000 square feet and stocking an edited range of just several thousand products. The store doesn’t feature banks of traditional checkouts; instead it’s a heavily automated and efficiency-driven experience. There are no bakeries, butchers, or any of the counter services you’d find in most supermarkets.

Nope, I’m not talking about Amazon’s latest cashierless grocery format, Amazon Go Grocery, which launched in Seattle this week. I’m talking about the now defunct Fresh & Easy, Tesco’s failed attempt to crack the US grocery market.

In my latest piece for Forbes, I explore 3 key learnings for Amazon:

1) Have a clear proposition.

2) Destroy the friction, not the experience.

3) Expansion does not indicate success.

You can read the full article here.