Page 37 - July 2020

THE IMPACT OF CORONAVIRUS ON RETAILING

Part 3: In Part 1 of this article, Mark Pilkington looked at the

immediate impact of the Coronavirus on retail, and
How to save retail in Part 2 at the likely medium to long-term challenges

facing the industry, concluding that it needed to make
deep-seated changes in order to survive. In Part 3, Mark
looks at the potential solutions for the future of retailing.

s lockdowns ease and with greater testing and/or development TREAT THE STORES AS ‘CLUB HOUSES’ FOR THE BRAND
of a vaccine, the possibility of a full-reopening of retail becomes COMMUNITY: by hosting events and gatherings that bring people LULULEMON ROSÉ MANSION
New York, US
more real. But this will not solve the more fundamental issue 2 together. Lululemon and Rapha are good examples of this:
A facing the industry, which is that stores no longer have the • Lululemon organises a lot of activities for its customers, both online and
advantage over online, in terms of the pure process of moving goods from offline. For example, it lays on the ‘SeaWheeze’ half-marathon in Vancouver every
factories to consumers, with online offering more variety, a more efficient year and also hosts regular yoga classes in its stores, led by some of the best yoga
buying process and more convenient delivery, at lower cost. teachers in that particular locale. The teachers, many of whom have large social
So in order to give consumers a reason to visit stores, retailers have media followings of their own, also act as ambassadors for the brand.
to offer something extra, over and above the pure provision of goods. • Rapha describes its bike stores as ‘Club Houses’, and equips them
There are four things that retailers can do to put the joy back into the with coffee shops, which are free to members. Membership of the club,
in-store experience: which carries an annual fee, gives a wide range of benefits, including
unique access to special products, inclusion on trips to beautiful riding
CREATE BRAND THEATRE: to do this they need to shift space away locations, free bike hire on the trips, and, crucially, free coffee.
from stocking things and use it to create spectacular displays that
1make the store a pleasure to visit: EDUCATE THE CUSTOMER: being able to physically interact with
• Virtual and augmented reality can turn stores into consumer products is one of the top advantages physical retail has over digital,
playgrounds. Technology is opening up opportunities to create brand 3 and stores are playing to this strength by creating engaging education
theatre in more immersive and less expensive ways than before. For sessions and in-store demonstrations to immerse casual shoppers.
example, the shop windows and interior walls can effectively become • A good example of this is Rosé Mansion in New York, which is an
large screens, turning spaces into 3D theatres, which can project the interactive wine-tasting adventure that combines a wine bar, an Instagram- In order to pay for all of this, retailers need to economise on non- service, and a nail bar. There is a limited range of stock, and customers are
brand story in an impactful way. Nike’s flagship ‘Nike Town’ stores are good worthy amusement arcade, and a science museum into one epic dream park. essentials. Chief among these is having a lot of space and staff time encouraged to shop the broader Nordstrom offer online via giant screens
examples of this. • Another example is Timberland, which is offering a new kind of in- devoted to stock-holding and processing. 90 per cent of store space is and delivery direct to the home.
• Interactive displays can offer customers the chance to customise store activity called ‘Flex in the City’ whereby consumers are invited to currently occupied by inventory, and over 50 per cent of staff time is spent Ikea is investing in new city centre small formats called ‘Planning Studios’, which
products and services to their taste and to see how products look on them. test a pair of Sensorflex shoes on a treadmill using Oculus Rift headsets on stock-related and other basic activities. offer advice and access to the company’s full range of furniture online, with
‘Magic Mirrors’ coupled with apps can allow the brand to communicate with to guide them through a virtual city tour. The key thing for retailers to do is to think of themselves as multi-channel delivery direct to the home. It stocks only a fraction of the company’s products,
customers on a personalised level. For example, fashion brand Rebecca • Cheese brand Boursin uses a pop-up ‘Boursin Sensorium’ to enable visitors operators, and to use each channel for what it is good at: the internet for stocking, but expert staff use giant screens to demonstrate the full range, offering what is
Minkoff’s New York store enables customers to use an app which interacts to take a virtual reality tour through the various indulgent sections of the fridge, displaying and shipping goods, and stores for brand marketing and service. effectively a free interior design service to customers, and using virtual reality to
with screens to request coffee and champagne, show selected products and from towers of luscious vegetables and a freezer full of champagne to a forest In practice this means that stores would carry limited stocks of their envisage what the furniture will look like in the customers’ homes.
order items to be delivered to the changing room. Once in the changing of herbs. The sensorium ends with the sampling of the latest Boursin flavours. bestsellers, and use technology to demonstrate the rest. They would All of these types of innovations will give customers a reason to go to their
room, another magic mirror enables the customer to see items on their take the orders on screens, and then ship the goods directly from their local high streets and malls, and help ensure a healthy industry going forward.
own bodies, change colours and finally to check out. PROVIDE EXCEPTIONAL CUSTOMER SERVICE: the human warehouses to the customers’ homes without going through the store. So, in summary, the lockdown is a terrible threat to old-style stores.
• Adding entertaining and sociable experiences can also make visiting element is potentially a major advantage for stores, so it needs using Without all that stock, stores could be smaller and cheaper, and without all However, if used properly as a time of reflection, it may provide an
a store more special. Selfridges is a good example, offering anything 4correctly. The secret is fewer, better-paid and more expert staff – the stock-processing and administration, the staff team could be smaller and opportunity for smart retailers to re-invent their businesses and re-
from concerts by famous musicians like Stevie Wonder to installations more like personal shoppers than temps. Basic tasks like stock management, higher quality. Nordstrom and Ikea are good examples of retailers who are emerge with something fresh and compelling for the future.
by artists like Damien Hirst and theatrical performances of Shakespeare. cash handling and till operations need to be re-engineered or automated, opening smaller stores, aimed primarily at customer service and brand display.
It has also provided activities like a rooftop boating lake, a skateboarding freeing up time to devote to customers. More space needs to be devoted Nordstrom has launched a new format called Nordstrom Local, which Mark Pilkington’s book Retail Therapy: Why The Retail Industry Is
bowl and a cinema. Its windows are renowned for their unique and to the customer service area, with comfortable seating, luxurious fitting is much smaller than its regular stores. It is a community and service centre, Broken – And What Can Be Done To Fix It is available in paperback from
sophisticated themes. rooms and free refreshments, and less space devoted to dead stock. offering a café-bar, personal shopping, dressing rooms, a clothing-alteration Bloomsbury Business, at all good bookshops and at Bloomsbury.com

REBECCA MINKOFF SELFRIDGES NORDSTROM LOCAL
New York, US London, UK New York, US