On Thursday 17 October, we attended the talk organized by Women In Real Estate Spain (WIRES), in which they talked about Retail's New Challenges. Some important members of the retail industry, such as Paloma Bergós from Casacobertura Inmuebles and Pilar Riaño from Modaes, took part in the forum to provide different perspectives of how each one fights and overcomes the challenges that retail currently presents. What 4 ideas did we keep from the event? Read on 😉
1. E-commerce has been on the heels of Retail for some time now
Online shopping is already three times larger than in a store. Therefore, brands are redirecting part of their strategy towards online commerce. The forum explained that in recent years, little by little, stores are being closed - we are talking, for example, about the well-known Retail Apocalypse in the United States. The Comerç de la Generalitat mentioned that:
out of 80,000 companies in Catalonia, 97.4% have fewer than 10 employees, so achieving profitability can seem complicated.
Therefore, SMEs have two barriers to overcome: on the one hand, they must lose the fear of technology and understand how to adapt to this period of digital transformation. On the other hand, they must comprehend what their strategy is and have a highly professional team. As we know, it is essential to provide an in-store experience to customers which serve as a differentiating element if they want to stay in the game.
2. The upcoming economic crisis?
The fashion industry has already managed to overcome two crises: the first was in the 1970s and the second in 2008. In recent years, the industry managed to lift its head and 2017 was undoubtedly a very good year for the world of fashion. However, this trend is changing because of the consumption patterns of the new generations. They seem to be more interested in experiences than in the purely material: they invest their money in other sectors such as the hotel industry, entertainment or wellness. Now the customer demands more quality, service, transparency, and personalized experience. For consumers to go out into the street, it has to be for something very attractive; if not, they will do it from home. In the forum, they gave the example of on-demand content platforms in relation to retail.
Netflix, in its most basic plan, costs 7.99€ per month. In proportion, a year costs 93.88€ and this is equivalent to a premium branded sweatshirt in season. If we go to the Premium plan would be equivalent to 167.88€ per year.
This shows us that people’s expenses are being redirected.
3. Connect the online and offline channels
As we have mentioned, some retail stores are throwing out the blind, so the forum recommends:
the creation of shopping destinations to live new experiences in family and friends with strong connectivity to the online world.
One of the key elements to understand and put into practice the omnicanality are the use of new technologies, such as wearables in store, as we explained in a previous blog. There must be coherence between their ways of use, the equipment in store and customers. Nowadays, the customer's customer journey does not simply go from a point a, to a point b: its forms of consumption jump from the online channel to offline in very varied ways. Moreover, even if the customer is in the store, it may not be 100%, as they use their mobile phones to search for products, compare prices and share with a community. It is important to understand the importance of facilitating a fluid connection between online and offline.
4. The mantra of the in-store experience
Retail is evolving rapidly and brands have to adapt effectively to their different forms. Brands are no longer just a logo or typography (although branding becomes more and more unified overtime!). Firms have their own values and must know how to transmit them as if they were a person. By doing this, the relationship between brands and consumers will become closer. This strengthens customer loyalty and satisfaction, and therefore sales. Brands cannot force the sale of a product just because. That is to say,
We cannot sell a product because we have it, rather we have to identify which products our consumers buy in order to sell them.
The customer’s ultimate decision is where to do it: through e-commerce or in a physical store.
The retail industry must know how to make a difference. To do this, there is nothing better than knowing how to enable the customers to fall in love and provide them with a totally out of the ordinary experience. One of the most popular methods in recent years is the WOW Effect focused not only on retail, but on any service that involves the customer experience. Next Thursday, November 21st in Madrid, Paloma Domínguez will give an intensive course of 4 hours in our Retail Academy titled: “The WoW shopping experience: The retail challenge”. Expert retailer and trained in Premium and Luxury brands such as Armani, Polo Ralph Lauren or Apple and with a coach approach aimed at professionals in the sector, Paloma Rodríguez will provide you with the keys for you to cause the WOW effect in your clients in this Christmas campaign 😉