With Thanksgiving just around the corner, retailers (and shoppers) everywhere are gearing up for the post-turkey rush – pushing opening hours further and further into the wee hours of the night to lure customers through their doors first. But with online sales expected to grow 15% to $68.4 billion this holiday season (Forrester), is Cyber Monday ultimately on the path to eclipse Black Friday?
There’s certainly an underlying and intensifying industry concern that digital is cannibalizing brick and mortar – pushing in-store sales online and online sales to other (cheaper) online retailers. There’s no denying the trend but there is something savvy retail brands can do about it. As with any major industry shift – in retail or otherwise – big moments of change are scary, but can equally present opportunities to capitalize and reinvent for the future.
Here are three inventive ways to think differently about the online/offline shopping experience this holiday season and beyond:
1. Leverage learnings from an online world to drive offline sales
The growth of online shopping has a lot to do with two ideas: convenience and access. The web as this infinite, ubiquitous platform makes it easier than ever to find what you need and discover what you didn’t realize you wanted. And in one click, to get it delivered to your door overnight. For a huge population of shoppers this is an ideal value proposition – cut out all the hassle of in-store shopping: the lines, the mess, the people, the pressure. In the context of Black Friday, where people literally trample over one another to get the best deal, calm, clean Cyber Monday has it’s appeal.
However, while some shopping is about buying goods and getting on with it, there’s a whole culture of shopping that’s about the act of shopping. Being in a physical space, among other people, discovering products in a non-linear manner, finding things you never expected, trying them out live, spending time in a cramped dressing room where you can ask the advice of strangers. There’s something magical about real live shopping – perhaps more magical to some than others.
But consumers today are smart. They know how to get the best of both worlds – the physical, tactile experience of shopping in-store with the convenience and ease of purchasing it online. It’s called “showrooming.” And it wouldn’t be a problem were it not for an increasing number of online-only retailers who can undercut the cost of goods because they don’t have the large overhead costs of keeping up physical stores. Try at Circuit City; buy on Amazon… we all know how that story goes.
In this climate, retail brands can’t just continue on with old ways of doing business. For one, having a strong, user-friendly ecommerce platform that’s closely integrated with the offline sales and merchandising strategy is a must, not a nice-to-have. Even if your customers can’t get your products anywhere else today, you can bet they’ll find a way tomorrow – with or without you in the picture. Mono-channel is no longer an option in an omni-channel world.
One way that retailers are working towards becoming omni-channel is by more seamlessly integrating web with brick and mortar capabilities. Large retailers like Nordstrom and Macy’s are linking online and store inventories for greater efficiency and accuracy. The Container Store takes a page from online shopping (and wedding registries) into its stores by allowing urban customers to shop, scan and buy items in-store without having to physically take those purchases with them. Instead, they’re delivered to your door later that day at a time window of your choosing. Whole Foods does something similar with same-day delivery – taking the schlep out of urban shopping and removing the potential barriers that might lead customers to switch to an online-only option.
2. Remove the online barriers
If you can’t beat ‘em, join ‘em.
Brands like Amazon.com or Soap.com have online shopping down to a science – literally. And while it’s not realistic to suggest that all (or any) other retail brands can out-Amazon Amazon, they can at least consider how to apply some best practices to their own business. This is certainly not new thinking, but it’s still relevant – super simple sign-up, one-click purchasing, free shipping, hassle-free returns, underpromising and overdelivering on shipping expectations, transparent, consistent, and instant communications, secure payments, reliable customer service, predictive promotions…
As category by category reaches their own tipping points in the online shopping curve (for example, Warby Parker’s approach to eyeglass ecommerce), swimming against the current to maintain better margins or to keep sales in-stores will only lead to further opportunities for cannibalization – from other online retailers who do it better.
3. Redefine the role of the store
Back to the magic of shopping. If today’s consumers are increasingly using stores as showrooms, I say double down and let them do as they please. As long as you’re working to remove the barriers to purchase from an online perspective (as described above), and you agree with the premise that a sale is a sale regardless of channel, then it really shouldn’t matter if the POS takes place online or off.
Which means there’s an opportunity to rethink the purpose of physical space. Online space is (basically) free, whereas offline space – especially prime real estate space – can be quite expensive. So when brands have both (and more cost-effective warehouses stocked with inventory to fulfill online orders), why use them for the same purpose? Especially when customers have every incentive to make the ultimate purchase online.
This thought speaks to the ‘experiential store,’ or the idea of store as a marketing tool. In other words, using your prime real estate spaces to give your customers an experience they can’t have anywhere else – and certainly not online. Giving them opportunities to engage with your brand beyond the transaction. To engage with your people beyond a call center. In this way, brick and mortar stores can become social/experiential hubs that build the kind of equity and loyalty that’s increasingly hard to come by in a very crowded world. Much like Niketown in NYC or London (Nike iD), REI in Denver (REI Outdoor School), and of course – Apple… everywhere.
An interesting observation – retailers focused on children were way ahead of the curve on this – case in point: American Girl Stores, Build-a-Bear Workshops, FAO Schwarz. What all of these brands have in common is an experience-based, engaging offline strategy to get customers in stores and keep them coming back. Oh, and that they all target little kids with short attention spans probably has something to do with it.
If you consider some of the major the shifts in consumer behavior that have resulted from an increasingly digital landscape, retailers might do well to think about their customers like impatient children – more demanding, less patient, more fickle, less loyal!
As with any major industry shift – in retail or otherwise – big moments of change are scary, but they can also present opportunities to be inventive for the future. Retailers who look for ways to leverage learnings from an online world to drive their offline sales, remove their online barriers, and experiment with the role of the store will have the edge this holiday season and beyond.
Marissa Vosper is a senior strategist at Wolff Olins New York.
The official commencement of New York Fashion Week.
The small economic kick-start project turned overnight global phenomenon.
The post-Labor Day weeknight when, despite saying our goodbyes to beloved Summer Fridays, it still feels abuzz with summer in the air.
Fashion’s Night Out (FNO or now #FNO) is more than just a successful publicity stunt with corresponding printed t-shirts and celebutantes (ahem, Usher?) – it’s a reminder of what great retail can, and should be.
There’s something about the offline nature of FNO that brings this to light. That gets people away from their screens and into the streets – even if for just one night.
It’s a reminder of why real, brick and mortar stores still matter.
Why shopping, live, is irreplaceable.
For the luxury sector especially, expressing that offline allure is the ultimate challenge in a digitized world. Which begs a variety of open questions like, how does a luxury retail brand signal high quality and craftsmanship without the ability to touch and feel? How can a luxury retailer maintain an air of exclusivity and ceremony in a medium that’s completely open? How can luxury establish a recognizable editorial voice amid the infinite web of other, often confusingly similar voices – both quiet and loud?
Part of the trick (and of course I’m biased) is having a thoughtful, cohesive brand strategy that guides decision-making, both online and off – from dressing rooms to zoom capabilities to Instagram posts.
Now, this is not to say that the online experience ought to mimic offline to be considered cohesive. Quite the contrary – many brick and mortar brands too often fall into the trap of digital reflection, using the online space to simply duplicate a physical space – a web 1.0 “shopping cart” mentality.
A few of the more digitally behind luxury brands that come to mind (and accordingly rank low on the L2 Digital IQ Index) – despite my personal love (or distaste) for their collections – Zac Posen, St. John, Mikimoto, Manolo Blahnik, Moschino, Givenchy.
The fact of the matter is that the capability, and hence the typical customer interaction, on a web or mobile site versus in a store is completely different. Which means the strategic design of those experiences should be – well, quite different. This presents an opportunity, but also requires more effort. Ultimately, the exploding influence of digital makes it all the more critical for brands to get their teams across platforms – whether web, mobile and/or in-store – completely and obsessively focused on a unified, focused brand purpose.
The job of a strong brand then, is to tie those pieces together such that the sum of the pieces is greater than the whole. The brand’s purpose should clearly come to life through its various platforms, but should equally be able to flex in how it expresses itself, based on those different contexts. Complimentary, not cannibalizing. Driving customers in-store, online, and back for more.
Marissa Vosper is a senior strategist at Wolff Olins New York.
Design and inspiration resourceStylusjust held its annual Creative Forum where Chief Creative Officer Ryan Ross focused his presentation on the intersection of fantasy, technology, science and play, through the macro trend, Altering Perceptions.
Within this macro trend, Ross detailed four sub-trends: Playful Wonder, the Real/Unreal, Digital Reality, and Fantasy Scapes.
Immediately evident in all of the trends presented during the hour-long talk is the move away from human reality. Whether augmenting our senses, reviving the dead, or taking us away to far out dimensions, what struck us most was the lack of humanity.
Stylus touched on a product for sensorial exploration created byWA/HH Quantum Sensations. Its lipstick-sized dispenser fits in your pocket and delivers a powerful burst of hot flavor (the sensory experience of alcohol, without the bother) that increases in intensity and can be sprayed on whatever you consume. Another noteworthy example, a 4D amusement park in South Korea, allows visitors to live vicariously through an avatar while interacting with other avatars on screen.
As has always been the case, the greater the advancements we make in technology, the further separated we become from other humans. Yet, for the first time in our history, we are now beginning to behave less like humans and more like the robots we grew up thinking of as make believe. In many ways, sci-fi is becoming reality.
Billed as “The Real/Unreal” by Stylus was Japanese pop star Hatsune Miku—an entirely computer-generated sensation who recently sold out her first “live” concert in the US in April 2012.
We’re all for future-facing innovation (especially if it means experiencing the affects of alcohol without the aftermath!), but we’d be even more curious to see the implications on the most human of brands, in an increasingly dehumanized world. How might a brand like Skype, a tech company who at its core is all about real human-to-human connections, fit into this picture? Can a brand embrace technology and “playful wonder” without drifting too far into “fantasy scapes”?
The companies that can answer certain questions about where we as humans fit in this new world will have an opportunity to stand out in a very different way.
A few questions this raises:
When do we decide on a final frontier?
What differentiates the dead from the alive? (Think Tupac at Coachella)
The human from the non-human? (Hatsune Miku?)
How does a brand remain “human” while still being forward-facing?
On the one hand, a compare/contrast and literal dialogue between the lives and works of two iconic fashion designers representing two distinct generations.
On the other, an exploration into the intersection of art, people and technology through the lens of historic and contemporary figures spanning 50 years time.
Despite the myriad differences…
One observation of commonality – an underlying question (or two).
What makes a thing art?
What makes a person an artist?
The confrontation/combination/collaboration (depending on where you sit) of commerce and industry – be it fashion or technology – with arts and culture is certainly no new discourse but it got me thinking about labels.
In our industry – one so heavily reliant on words – we tend to get caught up in our own labels and the act of labeling.
Design as a thing.
Strategy as a thing?
Design has a discipline. A history. A reason for capitalization. Institutions and publications dedicated to its recognition, development and growth.
strategy … not so much. It’s this amorphous, intangible, sometimes written, sometimes spoken, sometimes thought but unspoken thing. Which makes it very hard to Label.
It’s not to say labels don’t serve a real purpose, but worrying about the delineations between such large ideas, to me, feels beside the point – if not old fashioned.
Clothing is made to be worn. Technology to be used.
Except when they’re meant to be observed and contemplated as art in the context of a museum exhibition.
At the end of the day, Design and Strategy serve essentially the same purpose - a means of solving problems in a given context – in our case the context of brands.
And if that’s the case, why do we care so much what they’re labeled?
A “Match Made in Merchant Heaven” was the headline this morning on Forbes, describing the recent partnership/funding announcement between upstart menswear e-retailer, Bonobos and department store darling, Nordstrom.Or as Evelyn Rusli of the New York Times termed it “a symbiotic deal,” whereby Bonobos will aim to illuminate the Nordstrom execs on all things online in exchange for $16.4M in cash and a retail presence in some 100 Nordstrom locations nationwide.
What’s interesting is that, while most companies are desperately attempting (and sometimes failing) to take their offline concepts online, Bonobos (with help from Nordstrom) is moving in the opposite direction – but not for the reason you might expect.
Certainly a brick and mortar presence provides a physical scale that the Internet cannot replicate. But for a company like Bonobos, who has leveraged the limitless scale of the web to grow more rapidly than most (the company launched in 2007 and is now the fastest growing men’s clothing retailer online), this physical presence is more about marketing than point-of-purchase. According to Rusli, “by 2011, [Bonobos] was devoting about 20 percent of its revenue to marketing, about double the previous year. The hope is that the Nordstrom partnership will expose Bonobos to new clients, particularly those who may not be shopping online”… yet.
When you consider the global economy, certain obvious players come to mind – but what about the increasingly significant economy that exists off the books?
As Rob Neuwirth outlined in his Pop!Tech talk: Free Markets vs. Flea Markets, this Informal Economy or Shadow Economy or System D economy comprises $10T in annual global GDP and employs 1.8B people worldwide – about half the workforce on the planet. In aggregate, this quasi-legal system represents the 2nd largest economy in the world (behind the United States), and with current growth levels, is expected to eclipse the #1 spot in less than 10 years. By 2020 it has been forecasted that 2/3 of the global workforce will be doing business in this domain.
It’s a funny concept when you really think about it.
Isn’t all food from a farm?
Isn’t all food consumed at a table?
Well no, not really… and no, not always.
In fact, a whole lot of the food we eat these days is created in a lab and consumed in a car – if we’re being really honest, a lot of it is designed in a lab specifically to be consumed in a car. Fast food is as American as… well, fast food. The concept itself was born in America, it was raised and continues to thrive in America and has now become one of our most powerful and influential global exports.Fast food has fundamentally shaped the landscape of the United States and the world – quite literally and figuratively (pun intended).
As an avid shopper - both online and in real life (yes, I’ll admit it - it’s not as if it was a secret), I’ve quickly gotten on the whole online sample sale bandwagon.
gilt.com hautelook.com ruelala.com ideeli.com salemail.com thetopbutton.com onekingslane.com the list goes on…
Online discount “invitation only” retailing has taken off with a bang (and a chunk of my monthly paycheck!)
So recently when one of the original sites - Gilt Groupe - launched a new sister site, Gilt Fuse, I obviously took notice.
The two sites are quite similar - same business model, relatively similar merchandise selection (ha, obviously I would know this). The difference is that Gilt Fuse is geared towards a younger, slightly more fashion-forward, exclusively female audience, whereas Gilt Groupe is slightly more mature, more expensive, male and female friendly.
While the success of the Gilt model is undeniable (“the company has quintupled its membership in the past year, with 1.3 million registered members in the US and more than 200,000 on its five-month-old Japanese site. Company revenue for calendar year 2009 is expected to be in excess of $150 million.” - MSN Money), I wonder about the strategy behind this recent brand extension.
In the early stages of building a brand, I’m not convinced it’s a smart move to immediately take that equity and split it in two. Objectively speaking, it takes double the resources to build double the brands. Subjectively speaking, as a loyal Gilt Groupe member, I think it was a strategic misstep - asking customers to go to two different sites to accomplish the same task is confusing and defeats the whole purpose of an online sample sale - efficiency, ease, speed.
Well, I’m curious to see how it all pans out… and no, it hasn’t stopped me from signing in every day at noon (and spending way too much on clothes I don’t need), but that’s an entirely different issue!
while i walk to the gym nearly every morning (up west 4th street, across west 11th), today i noticed the following:
- dog poo (customary) - 3 used condoms (not as customary) - stomped-on cockroach - vomit - sleeping homeless man - various pieces of food/litter disgarded on the sidewalk - overflowing trashcans
as i sat in my yoga class i contemplated why it is that i love and live in new york city. there’s something about being a new yorker that presupposes a skewed sense of reality. one that accepts all the bad in order to soak up all the good.
it’s all about perspective, which is what makes brands so interesting to me. “new york city,” the brand, is something i full-heartedly buy into, cockroaches, condoms, vomit and all.
but at what point (if ever) does a new yorker become a former new yorker? at what point do people stop buying the brand in favor of something sunnier, cleaner, prettier, easier? at what point does that skewed reality come into focus?
if it ever happens to me, i think i’ll blame it on advertising.