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RELEVANCE FACTORS - New Retail Report 2019

The retail apocalypse was announced for years. Meanwhile it became evident that all negative predictions were overdramatic: Retail is not dying – irrelevant retailers are. While many stores had to be closed, overall retail is growing. In today’s world, consumers are getting better curated experiences in digital than in physical retail space. To stay relevant in the eyes of consumers, retail and brands need to consistently address the four identified key drivers: Newness and Discovery, Context, Local Community and Proximity.

Physical retail is suffering but it’s not due to lack of space. Instead, it’s due to lack of inspirational experiences, which makes it difficult to compete against Instagram feeds that are more interesting than physical stores people walk into. As digital spaces like Instagram are always giving consumers something new and curated, the aim of retail must be to create an inspiring space for discovery and one that introduces shoppers to the brands and their story in an engaging setting. Empowered by broad digital commerce data, retailers and brands can deliver the same level of curation offline as online.

Putting retail into the right context for shoppers in physical spaces
is easier said than done. Key is to meet consumers’ desires and expectations within a given situation and moment. Context-based product offerings, customization and personalization are the topics to be addressed. Advanced technologies like AR and VR enriched by AI can be leveraged to achieve this efficiently while the omnipresent smartphones are the key to frictionless customer experience across various touchpoints. Cross-industry collaborations will help to put retail into a broader context to create an even higher relevance to shoppers.

People seek a sense of belonging, interpersonal interaction and services beyond shopping. Retail spaces should, therefore, become places enriched by positive experiences, inspiration and social interaction instead of sole points of sale. Connecting to the local community goes along with localized assortments that address the respective community’s needs better and stimulate identification and belonging.

To make physical retail truly relevant within the efficiency-focused and convenience-driven lifestyles of urban populations, retailers need to be present where people live, work or commute. Urban small-format stores, easily accessible service hubs with or without inventory as well as short-term pop-up retail formats need to become an integral part of retail and brand formats.

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Publication date:: 18.07.2019
Pictures: Diconium