The retail industry is in a tremendous state of flux with consumers driving an unprecedented pace of change. Though store closings and openings are constantly making headlines, more stores opened in 2018 than in 2017, and both new and established retailers have evolved and adapted to changing consumer preferences. Retail expert James Mullan, formerly head of U.S. business at U.K. consulting firm GDR Creative Intelligence, joins this episode of Retail Gets Real to discuss trends he is seeing that will have the biggest impact in the future and how today’s retailers can prepare to meet the changes head-on.
Mullan sees a rapid fragmentation in the concept of “traditional” retail — where consumers walk into a store and walk out with a product — with ecommerce being just one contributor. In the United States, ecommerce only accounts for 10 percent of the retail market, while the share is 20 percent in Europe and much higher in Asia. “Stores will always be important,” he says, “but there's a whole proliferation of ways you can now interact with a brand, social media being an obvious one.” How consumers interact with brands is also evolving rapidly: “The way you have retail moments with the brands you care about is completely diversifying and changing,” Mullan says, “every day probably.”
Consumers are also differentiating between “shopping” and “buying,” the latter being employed more for low-involvement, necessary items like toothbrushes. Convenience is a major factor in such a transaction. “Shopping” is more relaxed and deliberate, where the customer is immersed in a retail experience. Mullan points to New York City’s Eataly and Everlane as examples where the emphasis is on the overall interaction — though he stresses that convenience is still a major factor in getting people to consider the brand. “The point is, the same shopper on different days can be completely different in the way they interact,” Mullan says. “So, one day, I'm prepared to have the really slow experience, and other days, I'm like, ‘Just get me in and get me out of here.’”
Listen to the episode to hear more examples of retailers that have successfully created value for customers and what trends businesses should focus on when planning for the future.