During our three-month deep dive into Purposeful Retail, we tapped into our community of experts, leading brands, trend agencies and entrepreneurs to gather insights, thought pieces and opinions. As a result of our exploration, four core and interdependent concepts emerged and within this framework we’ve created our ten hands-on tips to help you be more purposeful within the retail sector.
THE ROLE OF BRICK AND MORTAR IN SOCIETY
Brick and mortar stores worldwide have experienced major disruption in recent years largely due to the rise of e-commerce, resulting in brands now having to completely reconsider the role of the brick and mortar store.
1. CREATE THE ULTIMATE RETAIL EXPERIENCE BY BLENDING TOGETHER ONLINE AND OFFLINE
Customers are appreciating garments in-store – and the sensory experience it entails – much more than e-commerce allows. Technology such as RFID tags, connected security tags and low-energy bluetooth will help solve some of the pain points of in-store retail to create a best of both worlds experience which merges both online and online together. To add to this, stores such as Target are opting for a drop-off service whereby clothes purchased in store will be delivered to consumers’ homes – the ultimate coming together of online and online retail.
2. BECOME PART OF YOUR LOCAL COMMUNITY
The modern-day store is transforming into a social meeting ground with a strong sense of community at its core. Alex Sbardella, SVP of Global Innovation at GDR Creative Intelligence, explained that we’ve seen retailers move away from trying to create their own community to actually supporting communities that already exist in their local area. The store of tomorrow will open its doors to opportunities like neighborhood discussions, local initiatives and community events.
3. DEVELOP A WORKFORCE WITH SOFT SKILLS
As the world becomes more digital and automated, the advantage of the physical store will be a highly dedicated and qualified workforce and a much more personal experience. Angela Gallanz, Head of HR for H&M Germany, stressed that the modern workforce will require soft
skills like being open minded, empathy and finally, being a good listener. Your workforce is no longer just your point-of-sale representative but also a key spokesperson for your brand.
A NEW TYPE OF CONSUMER
Consumer values, needs and behaviors have changed dramatically. People now seek to feel empowered and informed and hold brands to high standards when it comes to transparency, purpose and sustainability.
4. UNDERSTAND YOUR CUSTOMERS BETTER WITH BIG DATA
It will become crucial for brands to effectively utilize and derive value from big data in order to precisely target customers’ needs. Florian Baumgartner, Director Consumables Amazon Germany, explains that at Amazon, they constantly ask themselves how they can best use new technology to better fulfill their customers’ needs. Working backwards from the customers’ needs is at the core of their business.
5. MAKE SUSTAINABILITY VISIBLE
With the increasing drive for sustainable consumerism, it is key that brands make it as easy as possible for consumers to get involved. Hakan Nordkvist, Head of Sustainability Innovation at Ingka Group, highlighted the fact that there is a large gap in the consumers’ knowledge of what they can do and what might have an impact: “Our research has proven that approximately 80–90% of our customers want to live a more sustainable life and want to actively contribute to sustainability.” One way they closed this gap was with a simple light bulb initiative: they introduced energy-saving LED light bulbs to the market for a fraction of the price.
With the majority of people quickly coming to the realization that the earth’s resources are finite, circularity is at the top of all major brands’ agendas.
6. SIMPLIFY THE PROCESS
In an expert session webinar, Niall Dunne of Polymateria reinforced the importance of simplicity within circularity. He claims that in order for the circular economy to spin, things need to get a lot simpler. Using Norway as an example, Niall explains that the country only uses one or two PET plastic resin grades, therefore limiting confusion during the recycling process. The whole Norwegian value chain, including major retail brands, then lined up behind this decision.
7. BUILD A COLLABORATIVE CIRCULAR NETWORK.
Businesses cannot become circular alone; involving external players in your supply chain in the process is essential. Håkan Nordkvist revealed that IKEA’s approach to this involved partnering with social entrepreneurs and other types of social businesses as well as creating new opportunities for people who cannot access the labour market easily, therefore opening up the value chain. For example, they team up with partners and companies to install solar panels locally across all locations.
INNOVATIONS WITHIN THE SUPPLY CHAIN
With the influx of new technologies, the shift in customer needs and changing formats of retail, brands are looking at increasing efficiency, achieving effectiveness at scale, reducing operating costs and avoiding waste.
8. RETHINK YOUR CURRENT INFRASTRUCTURE
When it comes to innovating the supply chain, working with your cur- rent resources can often yield impressive results. Our City of Goods challenge with BVG, Berlin’s public transportation authority, tackled this topic to better optimize transportation and package distribution for logistical purposes. Additionally, numerous startups have also looked into this by turning commuters into a means of last-mile delivery.
9. USE BIG DATA TO REDUCE WASTE
In an interview, Oliver Lange, Head of H&M Lab Germany, spoke about how, due to a paradigm shift from push to pull, the retail industry is becoming more on-demand than ever before. Using data to extract intelligent, tangible insights from customers has the power to reduce overproduction and cut back on waste.
10. LOCALIZE PRODUCTION WITH 3D TECHNOLOGY
This relatively new technology enables the design, production and distribution of goods on a local level and has the potential to boost local business and employment. By removing the need for international shipping and waste of excess resources, 3D technology will enable more effective and distributed supply chains and promote sustainability.
This is part of our Purposeful Retail publication titled The DOer’s Guide to Purposeful Retail. If you would like a copy of the full publication, call by our office in Berlin or please get in touch.
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