Is retail's post-Brexit role to entertain?
"Retail's role hasn't changed."
So says Sebastian James, CEO of Dixons Carphone as he tweeted his response to the decision by 52% of the electorate to leave the EU. And he’s totally right. The world may feel like it’s changed, but the job of retail hasn’t. It just got harder. And that's why brands need to stay focused on rewarding shoppers with a store experience to remember.
Retail is only going to get tougher in the coming months. According to DWF, four in 10 UK retailers regard international expansion as a key plank for growth, so it’s clear to see that Brexit will squeeze both the top and bottom line. Delivery platform Scurri has predicted that the UK could lose over £33bn in e-commerce sales due to the referendum result. In addition, a weak pound will make imports more expensive and push costs up. Retailers then face the unwelcome prospect of renegotiating supply chain relationships and getting to grips with a whole new, as yet unknown, regulatory environment.
And there’s the real rub: the unknown and its impact on confidence. The problem right now is that no one really knows what’s going to happen, this ‘wait and see’ sentiment breeds insecurity amongst consumers and that’s the last thing retailers need right now. Faced with yet more uncertainty and inevitable price rises, consumers will remain cautious and reign in expenditure (and just when we were all getting our confidence back as well).
So how will this climate affect the tentative resurgence we’ve seen of the physical store? Brands are starting see the role the store can still play in making people happy. It’s an epiphany that’s renewing the purpose of the store and reinventing what happens inside it. In a world dominated by virtual interactions, physical retail allows for a different type of connection with consumers, an opportunity that must not be lost in the distractions that leaving the EU will bring.
Today’s retailers need to respond to the fact that despite our heady addiction to convenience, loads of us still love going shopping (at least 8 out of 10 of us according to TimeTrade). Shopping now equals leisure in many households, especially those containing millennials (those hotly pursued 20 and 30 something shoppers). And their leisure time holds huge value for them. They’re looking to spend it in new, more rewarding ways via ever more intense experiences that entertain, offer an escape from the everyday and help create memories to share with family and friends.
The role of retail to make people happy throws the opportunity for the physical store into sharp relief. Not least because if anyone is looking for an experience to make them happy it’s a post-referendum millennial, coming to terms with an EU split they didn’t vote for and will have a huge impact on their future. Yes, financial uncertainty will probably make them more cautious spenders, even more demanding consumers and lift their expectations of service and experience sky high. But experiences are what they’re after, not more things, and retailers can deliver these through their stores.
So the call for store as entertainment has never been louder and clearer. And millennials lead the charge: their influence lifting all our shopping aspirations for a physical store that’s a proper day out in its own right.
How can we reinvent the store experience to pull in those trail blazing millennials (and the rest of us rushing in on their heels)?
For a start it has to be slower. Speed is now a given when we’re doing the shopping. We all have high expectations (thanks to Amazon’s precedent) when it comes to convenience and now expect them to be met easily online or offline. But the store itself needs to deliver something more than a place to click and collect. The experience needs to let us meander and give us opportunity to browse and enjoy what’s on offer.
And that has to be entertaining, in whatever way is right for your brand and consumers. We’re increasingly after a visceral, stimulating environment as an antidote to our digitally led, work-a-day lives. We want live action when we’re out and about, not virtual reality. A store needs to reward people with experiences not available elsewhere via other digital channels. Think educational content or immersive experiences that provide unique opportunities for a close encounter with your products.
Then, of course, it’s got to be sociable. We go out to mingle after all. Stores need to be a place for your customers to get together and share what’s important to them. The best will be the heart of a community (or even the beginnings of a new one), a venue for entertainment and services that bring people together to have fun. We need to design stores that build this function into the very fabric of their being, with plenty of space for people, not just products.
And last, we have to make it meaningful. What your brand stands for has to resonate with your customers every time they make a purchase. The store is a prime opportunity for making this happen. Whatever your wider purpose, elements of the physical experience can bring it to life. It’s a chance to show consumers that you care - about them and the world they live in.
A new archetype
Stores that feature these characteristics will be modern archetypes for physical retail; magnets for millennials as they grow up, have families, get careers and hopefully boost their spending power.
Simply put, now is not the time for brands to miss the whole point of physical stores for the omnichannel environment. Priorities will no doubt shift to deal with the unknowns of Brexit in the coming months but we mustn’t lose focus on what we do know. Today, good stores are not for selling products nor for driving convenience; other channels meet these needs much more effectively. Stores are for experiencing enticing content, for delivering slower retail that gives shoppers and brands the time they need to get to know each other better.
Retailers take note. Competing in the growing experience economy is the real driver behind the reinvention of the physical store. The result will put going shopping back on the agenda for all of us, whether we’re in or out of the EU.
By Kevin Gill, UK CEO of Start Group
As UK CEO of Start – the independent group that comprises specialist creative businesses Start, Hometown, Breed, Connected Retail and Discovery Partners – Kevin Gill’s focus is to maximise the network's rich talent in order to extract the maximum value from client's brands. His passion for delivering commercial creativity through bringing in-...