Published in Fairfax Business on May 1, 2015
The changes sweeping through the retail sector in the last decade have been profound and revolutionary. The retail industry is fast becoming global. Traditional mum and dad retail stores have all but disappeared. The retail giants of old have become lean, mean omni-channel enterprises and our new retail icons are bold, young digital natives with their eyes firmly focused on offshore opportunities.
The technology super highway is driving our hunger for instant gratification and our desire for individuality.
Whilst economic and social factors along with digital disruption have occupied most of the discussion in recent years, there are a number of significant but more subtle changes shaping our ‘new retail’ landscape that are important to pay attention to.
Here are five of the key trends shaping new retail:
1 FASHION TRENDS ARE NO LONGER RELEVANT. Instead of a trend (singular), we now have a lifestyle (amalgam). A lifestyle has character and personality, combining fast fashion and luxury pieces, vintage and contemporary – how I spend my day as much as what I would like to wear. It’s our hunger for lifestyle that is influencing new wardrobes around the world. This factor has driven our desire to go from day to evening, gym to lunch, desk to dinner. Consumers are busy and have limited discretionary spend and time. Looks needs to be changed with no more than one tweak. That outfit I went to the gym in has to see me to a social lunch with a friend. That white shirt and navy jacket that I wore to work over a suit pant (or skirt)? With a quick change into a pair of indigo jeans, I am now ready for dinner.
2 NO LOGO AGO-GO. Consumers are saying ‘Do not brand me so obviously, as I want to be me’. Just ask Abercrombie & Fitch, which recently changed its CEO after what was once a successful strategy of (over) branding. The biggest change in the luxury and premium brand space is minimalist branding. People are working hard to keep their individuality. We are seeing consumers thinking: ‘I want items that are customised and personalised so there is only one ‘me’.’ Less branding represents how I feel, keeps it classic and in an uncertain world makes that investment piece stand the test of time.’
3 THE WORLD IS BECOMING ONE AND THAT INCLUDES PRICES. The new consumer mindset is: ‘I am a global individual. I am travelling constantly or shopping online. Planes are now like catching public transport. I can get on a plane to shop anywhere in the world or even simpler, shop online anywhere in the world from the comfort of my sitting room. So I expect the prices to be the same (excluding exchange rates and taxes of course!).’
Good brands harmonise prices across world markets. They understand that I am a global customer and hence, the pricing must be global otherwise, I lose confidence and will shop anywhere I can pay the lowest price or shop with a competitor.
4 I AM CONSUMER, HEAR ME ROAR, IN NUMBERS TOO BIG TO IGNORE. Service in stores is getting better (shock!) but it’s being outpaced by expectations. The customer is now in the driver’s seat, deservingly spoilt for choice and options. She or he now has more product and price information than ever within reach of their smartphone. Shopping online is now just a housekeeping factor for retailers. The physical store is about to be reborn. When the customer walks into the store, it must be seamless and an engaging experience. Customers will even want to know that inventory is available before walking in the shop. Consumers have a lot more power and we are seeing them own this: ‘If I don’t get what I want, I will choose not to shop or even better I’ll let everyone know via Twitter or Facebook.’
5 FASHION DOES NOT DISCRIMINATE. The idea of masculinity and femininity is losing ground. With more women in leadership positions, and same sex equality and transgender identity becoming common topics of conversation, gender is crossing boundaries and impacting culture and legislation. On a recent shopping trip, I bought a beautiful shirt with a Sanderson floral print in a store filled with men’s floral patterns. Who would have thought? What was equally interesting was that those same floral prints were repeated for women on the other side of the store. Many designers are using the same fabric and designs for both their women’s and men’s collections.
Despite some nervousness around retail in general, the emerging face of new retail is an exciting one, which empowers the consumer and should support a blossoming retail economy.
Luxury brands are often the first to make sense of new retail trends. Their premium positioning and discerning, early-adopter customer base means that they are the first to see any changes. Premium department stores are a particularly good barometer, as both the first to feel the impact of an economic down cycle, and the first to see the benefits of the new consumer and new retail.
Paul Zahra is a Retail Expert and former CEO and Managing Director of David Jones, Ltd.
This article first appeared in Business Review Weekly.