Future of Retail 2013: Insider Trends’ Head of Trends Covers Key Retail Trends
On Monday 18th March, Insider Trends brought 250 people together for its ‘Trendsetters: Future of Retail’ event at the British Library in London. 4 trendsetters presented their projects and predictions. We filmed the whole thing and will be releasing the footage and transcripts over the coming weeks.
Cate Trotter, Insider Trends’ Head of Trends, introduced the evening and kicked things off with an overview of key retail trends ahead. You can watch the whole presentation on video above or use the edited transcript below to skip to the insights and stats that you need.
If you have any questions, thoughts or additional insights, do let us know in the comments.
Hello everyone, and welcome! We’re excited – it’s a dream of ours to bring a large number of people together to hear four trendsetters that we really rate discussing the future of retail. They’re going to talk about their most interesting projects and their predictions for their niche in the future of retail, so you’ll be hearing about it from the horse’s mouth.
Firstly, I’m going to discuss the key trends to give some context. Then we’ll have Emma Jones, who’s the founder of Enterprise Nation. She’s actually here with her PopUp Britain hat on. PopUp Britain currently has five popup centres around London and is going on to set up lots more. She’ll discuss popups, payments and partnerships and the future of this. ThoughtWorks specialise in delivering highly effective e-commerce, retail and multichannel experiences for all sorts of retailers. Mark Collin, the Head of Europe Retail for ThoughtWorks, will discuss how large retailers can become very flexible and much more agile with the process that they use. Then we’ll hear from Eric Van der Kleij, head of the Level39 tech accelerator, the largest finance and retail tech incubator in Europe. Soon they’ll be setting up a retail lab mall in Canary Wharf that gives their tech startups a live space to pilot their technologies. We’ll finish with Jonathan Chippindale, the CEO of Holition, a leading provider of 3D and interactive retail and marketing solutions who specialise in the luxury sector. By 3D, I mean holograms and augmented reality.
Our Twitter hashtag is #blretail, which stands for ‘British Library Retail’. I’d like to thank the British Library and O2 for making this possible, and thank you to all the speakers for sharing their expertise with us.
My first section focuses on key retail trends. We can see that technology is changing everything, not just in online retail, but also in offline retail. Here are some key stats: by this time next year, 90% of the UK population are predicted to have smartphones in their pockets. Almost 30% of the population now has a tablet, an iPad or similar device. That’s incredible, given that the first iPad was released less than three years ago. So the growth there is just astonishing. Also, 4G networks are going to be available to all of us by the end of this year. Broadband coverage is spreading and broadband speeds are getting faster all the time. So it’s easier to shop online, but it’s also changing our expectations for offline retail. It’s not just that online shopping is simpler – new systems are also being developed to make it a lot more convenient. One of our favourite examples is Chirpify. It lets customers buy anything through a tweet. Customers can sync their PayPal and Twitter accounts and buy anything through what used to be a marketing channel. So Twitter, which is primarily a marketing channel, is now becoming a selling channel.
Companies like Shutl are massively speeding up online delivery. One of the key benefits of offline retail, immediacy, is now being moved into the online world. Shutl, on average, can deliver something between 90 minute and two hours, but their fastest delivery was just under 15 minutes. From the moment someone hit the ‘buy’ button, they had their item in front of them 15 minutes later. It’s incredible.
Online sales are predicted to grow over the coming ten years by up to four times to £125 billion in 2022. And, at the same time, we’re going to see the high street shrinking. It’s just a fact of life – it’s predicted that there will be 31% fewer stores and less retail space overall by 2020. But this doesn’t give us the whole picture. We have to put this in context, and although online sales are where the growth is, offline retail is where the value is. And even in 2022, only a third of sales are going to be conducted through the internet. Offline still has a lot of relevance, not just in selling to people, but also in building an entertainment experience as well. 45% of people say they’ll always love going to the shops, no matter how convenient online selling becomes. This is because offline retail has an entertainment function that, in some ways, online retail can’t compete with. Offline definitely isn’t going away.
Also, offline has the interesting effect of making online businesses a lot more visible. Twelve of the top 20 e-commerce businesses in England have high street stores. That’s not a coincidence. I think having these stores on the high street brings a lot of visibility to e-commerce sites. That’s why there’s now a trend for some pure play online retailers to come offline, some in a permanent guise such as Funky Pigeon, with their concessions all around British railway stations. Dezeen experimented with popups during London Design Week and around Christmas time. Etsy have a store in New York. Made.com have a showroom in Notting Hill. They’re doing this because these interactions in the offline space help them sell more online.
IMRG Experian’s list of top ecommerce sites. 12 of them have a presence on the high street.
Although offline sales help online sales, it also works the other way round. Online sales increasingly help offline sales, so the two things are becoming a lot more interlinked. Currently 44% of sales overall are influenced by online, but by the end of the decade, 70% of sales are going to be influenced by that.
So the more you can intertwine these channels, the better off you’re going to be. IDC have observed that customers who engage with a company through more than one channel go on to spend around 15% to 30% more than ones who engage through just one channel. The customers of companies that fully intertwine the channels to create an omni-channel experience spend 15% to 30% more again. That means there’s up to a 69% increase over single-channel ones – it’s really worth doing.
Topshop is one of the businesses bringing channels together really well. They have catwalk shows, but they share it with a lot more people than those who are in the room. They stream the shows on their website – they even have a system that lets customers take photos of the show as it’s happening and post those onto their social profiles. Also, as the show is happening, customers can buy the items and personalise them.
Topshop is also a leader in all things social. It’s doing something interesting and genuinely engaging with almost any social channel you could name. This all forms part of a strategy that they refer to as their ‘infinite loop’. The idea is that they’re so close to the customer that when the customer comes to need something or buy something, they automatically go and buy it from Topshop. Communicating with Topshop is such a habit that they have to opt out rather than opt in.
Another example we love is the Burberry Regent Street store that recently opened. If you’ve not been, you need to go. The store is designed to be a physical manifestation of its website. They key part of the omni-channel experience is a satellite link-up that will broadcast footage either into or out of the store. When they have a catwalk show, they pull the store displays to one side, put out seating and stream the show from wherever it’s happening in the world onto the store’s massive digital screen, turning the show into a global retail event.
Also, the Burberry store has a hydraulic stage that comes out of the floor. Jake Bugg did an in-store gig where footage was broadcast on the website. Burberry essentially see their store and their website as equals. They both sell and they both promote. This is a key part of the ultimate omni-channel experience – using every channel in its own way to engage and sell.
So we’ve just covered technology that customers have access to, but technology is also shaping how stores do business overall and how they can optimise the experience in other ways. There is a service called Cara from Immersive Labs which is available in the States. It’s a series of webcams that scan customers’ faces to see what gender and age they are. It can then personalise displays according to the customer’s personality or demographic. Also, the cameras through the store can capture dta on the space and how it’s being used. They can show dead spots and the places where people are spending the most time, giving retailers a lot of information about how to optimise the experience and sell more. It’s a win-win for both parties. The company using Cara will sell more and the customer will be more engaged and satisfied.
At Burberry, they have iPads that track customers’ orders. When you buy something in-store, the assistant can see what you’ve bought online or in-store before and give special personalised recommendations. This is a useful service for customers. Burberry are also using their iPads to make the buying experience more comfortable for customers too. They’ve observed that when people buy online at home, they’ll do so in comfort, sitting on their sofa or their bed. They thought, “Why should anyone queue any more?” So now you can remain seated on one of their comfy couches and go through the transaction on an iPad. This reflects well with customers. 43% of shoppers say their experience improves with systems like this, so again there’s a win-win .
Some companies are rethinking the function of their offline spaces. They see the online channel as the primary selling channel and therefore they focus on building the experience much more in their offline spaces. We have a few examples for you here. Nike 1948 in Shoreditch is almost like an exhibition or an events space rather than a retail space. Selfridges’ quiet room has been going for a couple of months and this is just an empty room where people can chill out and forget about the hustle and bustle of Oxford Street. Disney have reopened their stores as Imagination Parks. Rather than selling to children, they aim to create the best 30 minutes of a child’s day. By doing that, they sell more than they have been before. Lomography’s shop is half store and half events space. This whole concept of putting selling second was developed by Apple, which is still London’s most successful retail space. This stuff really does work.
To conclude, the retailers that will be successful in future are the ones who can intertwine these channels the most, getting customers engaging with and buying from the same channels; moving across channels seamlessly. Every stage of the customer journey is now being enhanced by technology. It can be used in one of two ways – either to speed up the experience or slow it down and make it more enjoyable and experiential. I recommend you go through and map out your customer journey, thinking about how you can use technology at each point either to condense it and make it faster, or to open it up and make it as effective and engaging as possible.
I’m now going to hand over to Emma Jones, the founder of PopUp Britain. They have five spaces at the moment, but hopefully soon the whole country will be overtaken by them.