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Trade is constantly on the move. This is how the trends lead from fast fashion to fair fashion. But which orientation has future potential? And how can stationary retailers hold their own against online retailing? Theresa Schleicher, trade expert at the Zukunftsinstitut and management of VORN Strategy Consulting, knows the answer to these questions and many others.
For the fourth time in a row you have published the Retail Report. What major changes has retail undergone during this period?
Theresa Schleicher, trade expert at Zukunftsinstitut and VORN Strategy Consulting management: “The retail landscape is under constant pressure. In the last years the handling of new technologies, the cooperation with big platforms like Zalando or Amazon and the confrontation with the values and wishes of the following Fridays-for-Future generation have been added. Retailers therefore have a lot to do and this has made the retail landscape more cooperative and collaborative in general – because few of them are able to face the number of challenges profitably on their own.
The Retail Report 2020 deals with topics such as instant shopping and playful stores. What innovative concept do you recommend for stationary retailers?
The current movement is quite exciting. According to current figures from the HDE (Handelsverband Deutschland), we can see that although retail space in stationary retail has not increased, the productivity per square metre has. This means that the experience per area is becoming more decisive. This creates new innovative strength and opportunities for the retail trade. Small, smart and playful retail formats are increasingly being added to large flagship stores. The trend of playful stores sketches the playful worlds of experience per square metre. One example is the Concept Store Showfields in New York, which presents various brands like in a department store. But instead of having a shelf for toothpaste, an entire bathroom was built for the show. The development of instant shopping, on the other hand, shows how retailers can secure their place in the customer’s everyday life with mobile shop space (in the form of autonomous supermarket cars or floating food retailers).
Who determines tomorrow’s trends?
That is increasingly difficult to say today. Ultimately, it is an interaction between society and the economy. Social trends are the cornerstone and determine the long-term success of new developments and trends. In the Zukunftsinstitut, these trends are called megatrends. By these we mean, for example, the search for individualization, new work or demographic change as well as increasing globalization. They lay the foundation for our sense of values and our innovative strength. This results in new trends as we know them today – in other words, the first innovative examples of companies. Fashion as well as product and zeitgeist trends are also increasingly influenced by the pressure of large disruptors such as Alibaba, JD or Amazon.
How do you advise stationary retailers to hold their own against online retailing?
The greatest success is currently achieved by those who do not see themselves as either-or and as competitors. By this I mean both online trading and stationary trading. In the future, it will be more and more important to work together to meet the challenges of logistics, experience, service, emotional closeness and uniqueness. Stationary retailers are therefore well advised to see themselves as part of a large retail experience ecosystem and to consider which retailers, service partners or gastronomy providers can be collaborated with in the future – online and offline.
What are the interests of Generation Z when it comes to the shopping experience? How can stationary retailers win Generation Z as customers?
Generation Z has clear ideas about retailers and new shopping experiences. For them, what counts most is transparency and the social and sustainable behaviour of the retailer. This means: I prefer less, but sustainable and quality-conscious collections and products.
Generation Z also attaches great importance to availability and service quality – both in the expansion of digital communication and delivery options and in on-site advice.
In fashion, the issue of sustainability is becoming increasingly important. Many companies want to reduce their ecological footprint in the future. In your opinion, what exactly makes fashion sustainable?
Sustainability has little to do with a collection made of organic cotton. Sustainability is either impossible or impossible, which means that retailers have to think about their values and philosophy. This starts with the scarcity of collections and the selection of materials, continues with store design and the use of energy-saving or alternative energy sources, the selection of sellers and employees and ends with social commitment as a responsible company.
How will consumer behavior change in the future? Fast Fashion vs. Fair Fashion – Which orientation has future potential?
Fair fashion must become fast. At the moment we are talking about two different trends, but they will harmonise in the near future to meet both requirements in part.
How would you describe the current state of textile production?
Especially in the textile sector there is a great upheaval taking place. Large retail chains are finding it increasingly difficult to be successful on the market. These include, for example, groups such as H&M and Primark, which speak of current crises. At the moment, many customers are still buying from the big brands, but the more intransparent they become, the greater their displeasure will be. It is precisely with these customers that a stronger desire for authenticity, fairness and sustainability is growing – this is slowly showing its consequences for retailers who do not do this or do it inconsistently.
What advice would you give to companies planning to become more sustainable?
The most important thing is transparency and openness towards customers and partners. It is not about making everything 100% sustainable, but about acting openly and honestly and becoming aware of one’s responsibility. This is what customers are interested in, not just “vegan leather shoes”.
What future do events like Black Friday and Cyber Monday have? How do you explain the growing success of these events?
Today’s customers are shaped by a phenomenon that the trade has made good use of: FOMO – fear of missing out. An artificial shortage at an exclusive price therefore attracts many people and has made Cyberweek and Black Friday successful.
The two campaign times are not the only ones – in Asia they celebrate Singles Day, which is even more successful than Cyberweek. Nevertheless, signs of fatigue will also become visible here, because the customer knows the principle and will no longer feel any special exclusivity at some point – especially if more and more such event days are created. The art will therefore be to offer special collections, products and promotions on such days instead of a pure discount.
How will artificial intelligence change trade in the future?
Artificial intelligence has long since become a buzzword in retailing. Myths, great promises of salvation and horror scenarios entwine around this term. One thing is clear: systems that learn and make decisions independently will turn trade upside down in the next few years. Existing trends such as the personalisation of products and services, the “personal” support in dialogue form by bots and the individual approach in marketing will be further strengthened by AI. The boom in artificial intelligence ultimately leads to a new level of personalization that puts people (whether as customers, users or guests) back in the spotlight.
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Link: The Retail Report 2020 provides answers to the questions of the future that retail entrepreneurs are asking themselves.
Image: Future Institute