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The New GMM panel discussion at Retail's BIG Show
Merchandising

The new rules of retail merchandising

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It’s not just about products and presentation anymore; chief merchants are focused on creating remarkable experiences for customers with increasingly high expectations.

Retail merchandising roles are evolving. A chief merchant used to be concerned mostly with product selection and presentation; now the top merchandising position in a retail company has broader accountability and is heavily involved in talent development, change management and customer experience.

In a panel discussion at Retail’s BIG Show, Nordstrom Rack’s Paige Thomas and LVMH North America’s Gena Smith told HSN’s Sandy Soto that technology is table stakes and visionary thinking is a baseline requirement now. Consumers are savvier than ever, and it’s increasingly challenging for retailers to bring newness and inspiration to the shopping experience.

That may explain why PSFK’s “Future of Retail” session was standing-room only. The company’s annual report on industry trends focused heavily on creating remarkable customer experiences. In an effort to stay ahead of consumer expectations, innovative retailers are experimenting with these ideas:

Twitter "buy" button

Twitter’s “buy” button

Letting customers shop on their own terms

“We’ve seen that customers want to shop on their own terms nowadays, and as a retailer or brand you need to respect that,” PSFK Labs’ Scott Lachut said. That’s the thinking behind a push to bring shopping cart functionality to every online experience, from “buy” buttons on Twitter, image recognition features within apps and streamlined purchasing from social media and mobile. The option to reserve products online for in-store or curbside pickup helps stores like Gap and Walmart give customers more control over delivery, too.

ModiFace’s Beautiful Me app

ModiFace’s Beautiful Me app

Encouraging digital discovery, in-store and online

Smart multichannel retailers not only encourage customers to look up product information on mobile devices, but find thoughtful ways to bring digital features to the retail environment, adding a useful layer of information over the “real world” shopping experience. House of Fraser is testing beacons inside mannequins that let shoppers access information and special offers for the products on display. ModiFace’s app generates personalized skincare recommendations by analyzing hundreds of photos from a shopper’s linked Facebook account. And Neiman Marcus’ memory mirror helps “shoppers short-circuit the process of trying on, and re-trying on, clothes.”

Warby Parker’s Frame Studio in Chicago

Warby Parker’s Frame Studio in Chicago

Designing destinations and communities

What does the store do, beyond just selling things? PSFK Founder and President Piers Fawkes says the future belongs to retailers that transact in culture, experiences and relationships. Stores become hubs for communities of like-minded consumers, with services and experiences beyond products. Club Monaco’s Manhattan flagship store is home to a bookstore and coffee shop; Urban Outfitters’ Herald Square concept store offers salon services, bike repairs and Instagram photo printing. Warby Parker takes it a step further with a unique theme at each new location — retro classroom décor in Dallas, a photo studio in Chicago and a reading nook in San Francisco.

PSFK’s Retail Tour

In New York City? See the trends in action with PSFK’s self-guided retail tours, exploring innovative retail concepts in five different neighborhoods.

Thomas noted that forecasting data drives decisions at Nordstrom Rack, but every time the company spot-checks a forecast, they realize customers are evolving even faster than they thought. “Even when we’re being aggressive, it’s not fast enough.”

To stay ahead of consumers, Smith says general merchandising managers and their teams need to understand and appreciate how quickly technology is changing and channels are converging. What’s more, Smith says, cultural sensitivity and an awareness of what’s going on around the world — not just in selected markets — is also critical in retail. It takes more than tech skills to bring “Future of Retail” ideas to life; merchandising teams must also have a deep understanding of how customers are living their lives.

comments

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Lyon K.
There have to be consumer limits. Such as buying new furniture for a party, having the party, and then returning everything being "not satisfied". Similarly consumers will visit our store and shop on the internet for product we carry while in the store and taking pictures of our products. They then go any buy on the internet. We have adopted a policy that if it is not bought in our store, we will not service it. If they come to inquire about how to use the product, we will refer them back to where they bought it, or charge on an hourly basis. We have found, that by offering to support the product, only encourages them further, knowing they can always get service from us. Once they have to start returning product and get into the expense of postage or freight, it becomes more expensive. One recent experience was that a woman came in before Christmas for a train set, and took an hour of our time while we explained it to her. She said she would think about it, but we knew when we saw her take a picture she was going shopping on the internet. Sure enough, right after Christmas she came in with it in her hand. We looked, asked for the receipt, which she promptly produced. We told her,sorry, it was not bought here and she should take it back where she bought it. Her eyes opened wide as her jaw dropped to her toes. Her husband turned and glared at her, and we just walked away to serve another customer, leaving her standing there. Word of mouth is the best advertising, and we are hoping these instances get around, because eventually all trains require service. Anything mechanical requires service. Technology is changing, and so are buying habits. As merchants, we also have to teach the consumer good buying habits, because if everyone was to use the brick and mortar stores as showrooms, the brick and mortar stores will disappear as they are already, and then where will the showrooms be. Who will provide the services needed? I would also like to say, that service is not a money making affair. It takes time, training, and parts. Parts that go obsolete if you stock them. Time to repair them. Time to find the parts and order them (which is difficult to charge for). L.H.Kunin