It is not a secret that most retailers are having a hard time now. With the lockdown and the pandemic crippling their sales, some big names in the likes of Cath Kidston and John Lewis were forced to make scary announcements, and the ones who didn't speak are presumably in dire straits, too.
We can't know for sure what the future holds for these retailers, but we do know that most will have to adapt or die. Cath Kidston is moving to online experiences only for the near future, but for those remaining in the high streets, it can't be an option to just revert to what they were.
We had a chance to speak with Mark Pilkington, author of the Bloomsbury-published book Retail Therapy: Why The Retail Industry Is Broken, to discuss this in more depth. You can find Mark's reflections below.
Photo by: Green Room
How retail brands can innovate their communications in the wake of coronavirus
The government’s shutdown of all non-essential retailing on 23 March 2020, in response to the threat from the Coronavirus, has sent shockwaves through the industry.
Retail sales dropped a record 5.2% in March, and the situation is likely to worsen sharply as the lockdown drags on. A recent study by Alvarez & Marsal has predicted that non-food retailers could see a decline in sales of 17% over the whole of 2020 – equating to over £37 billion of lost revenue.
Already we have seen the first casualties, with Debenhams, Oasis, Warehouse, LK Bennet, Laura Ashley and Cath Kidston going bust, and Arcadia Group rumoured to be on the edge. Even stalwart John Lewis has said that they may not re-open all their stores. Some of the retailers that have gone under will continue as pure-play online brands – as in the case of Cath Kidston.
The main beneficiaries of the store closures have been retail’s e-commerce rivals – for example the most recent ONS figures show that online sales increased 12% year on year in March 2020, boosting its share above 22% of the market. Many consumers have got used to the convenience of home delivery, and they may not go back to their old habits that easily.
If nothing is done, when the shops reopen, they may find that their customers have disappeared. The consequences could be devastating, both for retail itself, but also for the creative industry that supports it.
The only thing that can save this important industry is a complete re-set, and creativity is going to be key.
The retailers that want to stay open need to face the fact that most shopping experiences are not great. The stores are often unattractive; there is poor product sign-posting, and when you do locate what you want, it is often out of stock. Finally there is a lack of properly-trained staff to help you. And this is on top of having to get to the store, over congested roads or public transport networks, pay expensive parking and carry the heavy goods home with you.
Compare this with the easy process of buying online and it becomes apparent that stores no longer have an advantage over online, in terms of the pure process of moving goods from factories to consumers.
In order to give consumers a reason to buy in stores, retailers have to offer something extra, over and above the pure provision of goods. And the creative industry needs to help it innovate in this area.
Create brand theatre
Retailers need to shift space away from stocking things and use it to create spectacular displays that make the store a pleasure to visit. Video walls can turn spaces into immersive 3D theatres, which can project the brand story in an impactful way. Nike’s flagship stores are a good example of this.
Interactive screens (‘magic mirrors’) coupled with apps can allow the brand to communicate with customers on a personalised level – for example, Rebecca Minkoff’s New York store enables customers to use an app which interacts with the screens to order coffee/champagne, show selected products on the screen and order items to be delivered to the changing room. Once in the changing room, another magic mirror enables the customer to see items on their own bodies, change colours and finally to check out.
Rebecca Minkoff's use of technology in retail. Source: eBay
Adding entertaining and sociable experiences can also make visiting a store more special. Selfridges is a good example, offering anything from concerts by famous musicians like Stevie Wonder to installations by artists like Damien Hirst and theatrical performances of Shakespeare. It has also provided activities like a rooftop boating lake, a skateboarding bowl and a cinema. Its windows are renowned for their unique and sophisticated themes.
Treat the stores as ‘club houses’ for the brand community
Stores need to bring people together by hosting events and gatherings. Lululemon and Rapha are good examples of this.
Lululemon organizes a lot of activities for its customers, both online and offline – for example, it organizes the ‘SeaWheeze’ marathon every year and also hosts regular yoga classes in its stores, led by some of the best yoga teachers in that particular locale. The teachers, many of whom have large social media followings of their own, also act as ambassadors for the brand.
Rapha describes its bike stores as ‘Club Houses’, and equips them with coffee shops, which are free to members. Membership of the club, which carries an annual fee, gives a wide range of benefits, including unique access to special products, inclusion on trips to beautiful riding locations, free bike hire on the trips, and free coffee.
Provide exceptional customer service
The human element is potentially a major advantage, so it needs using correctly. The secret is fewer, better paid and more expert staff – more like personal shoppers than temps. More space and effort needs to be devoted to the customer service area, with comfortable seating, luxurious fitting rooms and free refreshments, and less space devoted to dead stock.
For example, Nordstrom has launched a new format called Nordstrom Local, which is much smaller than its regular stores. It is a community and service centre, offering a café-bar, personal shopping, dressing rooms, a clothing alterations service, and a nail bar. There is a limited range of stock, and customers are encouraged to shop the broader Nordstrom offer online on giant screens with delivery direct to the home, or through Nordstrom’s click and-collect service.
Educate the customer
People love to learn about the provenance of the goods, and see how they are made. A good example of this is Rosé Mansion in New York, which is an interactive wine tasting adventure that combines a wine bar, an Insta-worthy amusement park and a science museum into one epic dream park.
Source: Rosé Mansion
The creative industries can do a great deal to help retail innovate in these areas, harnessing the power of ideas to design unique experiences that attract customers. Technology is opening up opportunities to create brand theatre in more immersive and less expensive ways than before.
For example, the shop windows and interior walls of stores can effectively become large screens, which project impactful brand ideas. Interactive displays can offer customers the chance to customize products to their taste and top see how products look on them. Virtual and augmented reality can turn stores into consumer playgrounds.
This will give customers a reason to go to their local high streets and malls, and help ensure a healthy industry going forward.
The creative industries can harness the power of ideas to attract customers with unique experiences
So, in summary, the lockdown is a terrible threat to old-style stores, and the low-level creative campaigns of the past. However, if used properly as a time of reflection, it may provide an opportunity for smart creatives and retailers to re-invent their businesses and re-emerge, with something fresh and compelling for the future.