In 2015 on the theme of the "shop of the future" I had captured several ideas from the main American consultants Jason Goldberg VP of Razorfish and Brian solis Evangelist from Altimeter (now from Prophet CO.) and from blogs Retail Customer Experience  LuxuryDaily  e Business of Fashion (BoF).

This year has brought me back to updating my previous ideas a

The State Of Fashion Report 2017 McKinsey
The State Of Fashion Report 2017 McKinsey

interesting and visionary McKinsey & Company Reports published together with BoF on the innovations that 2016 introduced and that will be the protagonists in 2017 in the Retail sector, in the world.

Let's start from the main assumption, the shop of the future is already a reality and it is “always open, with hyper-connected relationships and tailor-made services for customers”.

 

Customers shop online from home
Customers shop online from home

This has made the store the most discussed place of digital transformation in recent years together with the change in consumer purchasing behavior, leading us Digital Transformation Strategies consultants to study new models of Innovation, Marketing and Communication based on customer-centric analysis ( the customer at the center).

What does "always open" mean? our customer is "always on" i.e. he is always connected, buys at any time and has little time. As a result, brands and retailers have embraced omnichannel. The store physically lives on the street and online on ecommerce, offering increasingly broad experiences and purchasing methods. What's new compared to 2016? customers buy at any time and are getting used to Customer Care services available 24 hours a day and Social networks are no longer enough. The era of Chat-Bots, Virtual Assistants and Lead Nurturing begins with Marketing Automation and the era of see-now-buy-now "instant gratification" continues. The physical shop still remains an important place for the consumer but, in cases where loyalty is at the highest level of trust and satisfaction, it is the customer himself who claims to be able to buy online during the year. And this, as reported in the McKinsey & Company Reports, confirms key themes for Brands and Retailers, i.e. cost containment, new organizational structures (reduction, training and change), stock reduction (fast-shopping in-store), purchase of in-store technologies that control the showrooming effect (VR) , strengthening and continuous renewal of ecommerce.

In Store Chat-Bot in Facebook Messenger
In Store Chat-Bot in Facebook Messenger

This Christmas 2016 Nordstrom via a Chat-Bot on Kik and Facebook Messenger offered free advice on Christmas gifts, giving recommendations and original ideas (L2 article). Brands such as Burberry, Jaeger-LeCoultre, Tommy Hilfiger and Macy's have already done the same.

And “hyperconnected relationships”? We are still in full growth of smartphones and always-connected devices and Social Networks that are increasingly present and protagonists of our social and work habits. But that wasn't enough! in 2016 also begins the moment of truth of virtual reality, which entered the homes of Italians thanks to Sony Playstation, Oculus Rift, Vive, Samsung Gear… “more ways to shop” is how Brands respond courageously to customers. Amazon from online opens and virtualizes its stores in the USA by calling them Amazon Go, accompanying the opening with a beautiful campaign to advertise an advanced anti-steal system.

Coop The supermarket of the future
Coop The supermarket of the future

Coop in Italy inaugurated in December the Supermarket of the future in Milan investing over 4,5 million euros and equipping it with immersive technologies to improve the customer experience. It is a Concept Store, whose experience will be the driver for the renewal of the entire supermarket chain.

And after virtual visits with Google and Oculus, Brands and Retailers are trying to increase interaction with smartphones at home, in the office, in the car by exploiting IoT devices

Amazon Dash Button Scottex Scholl
Amazon Dash Button Scottex Scholl

as the Amazon Dash button or by bringing even more advanced interactive Digital Signage installations into fashion in store and in shop windows with automatic profiling. The theme becomes more and more the hyperconnection between consumer and retailer remaining within the cloud of simplification of the purchase. What about the apps? Yes, if they simplify my purchase and offer me a service that improves my well-being, my lifestyle and does not disturb my free time. We need to start from the base, the purchasing experience must integrate with existing processes and not create new ones.

And finally “tailor-made services for customers”? Let's start from a still very traditional but effective extreme of approaching customer needs,

Dolce&Gabbana Hijab
Dolce&Gabbana Hijab

Dolce&Gabbana in 2016 started the production of Collections of Hijabs and Abayas to open up to new markets which, although still very limited today, are considered by analysts to have absolute potential for 2020. Let's talk about other extremes, the Else Corp, A Virtual Retail Company of his friend Andrey Golub, is developing a mass customization system (Exclusive Luxury Shopping Experience), a "virtual retail" Cloud / SaaS software platform, for the presentation and sale in 3D simulation to the public of made-to-order, personalized and bespoke quality footwear and clothing to individual customers at affordable prices. But the tailor-made services will not only be about virtual reality and 3D printing. We are talking about contaminating the needs of customers ever more closely, offering services that integrate with their needs and lifestyles. An important return to taylor made and product loyalty dynamics is foreseen, which start from a contact and a greater proximity between Brand, Retailer and Customer. And from another point of view we talk about Experiences and how to transform them into a moment of unconscious purchase guided by unplanned impulses. Stores have to get out of their territory, their physicality and immobility to live both online but also the lives of their customers. Contact points must increase.

Returning to visionary McKinsey & Company Reports 7 of the 10 outlooks have turned me on.

Let's start from the first, in 2016 the theme was the slowdown in Chinese economic growth which in 2017, while remaining topical, leaves room for economies of cities defined as "urban engines". The evolution of the strategies of the Brands and Retailers increasingly depends on the local policies of the cities. It is no longer a reflection of central politics! local politics and the economy are now considered strategic decision-making areas capable of increasingly influencing the fate of online and offline commerce. Healthy cities have a modern economy that creates space for innovation and finds loyal and virtuous international consumers. In the Report you will already find some international rankings with Hong Kong as the capital of jewelery and bags, New York of footwear and sportswear.

The second theme concerns the evolution of customers, returning to the change in consumer behavior. The Report devotes a chapter to it. We are talking about “always on” consumers, always connected, more informed, more demanding, technology-driven and difficult to predict. In particular, this type of consumer loves to make very different purchases, changing Brands and Stores. Brands and Retailers will have to review the architecture of their shops and their internal processes. It will mean abandoning checkout areas in favor of more mobile payment points. It will mean mixing products between brands or grouping them by user experience. Highlight best-selling products. Create relaxation areas (bars, cafés, lounges) and obviously equip the shop with the main technological comforts required, from Wifi to battery charging systems, up to digital magazines. Online means simplifying ecommerce (no more homepage, category, brand, product and shopping cart schemes), adopting quick sales and payment techniques (see Amazon Payments, Google Wallet charged to the telephone operator) and purchase processes via Chat- bots. But also broaden the product categories by mixing combinations (shoes, books and perfumes / jewels, wines and technology).

In-store Bike Purchase Experience
In-store Bike Purchase Experience

Proximity techniques will become more and more pervasive, for example Alibaba intends to introduce a purchase VR system. Stores that will sell products purchased from Alibaba will be able to allow their customers to connect and make their purchases in stores via virtual reality.

The third theme is represented by the correlation of targets and genres. In 2016 the "genderless" category entered the world of fashion (see theGucci ad) i.e. clothes for both women and men. The genres are now contaminated, they want to do it and exchange their experiences and it will become increasingly inappropriate and difficult to bring them back to the order of things. The same will belong to the theme of products by age groups.

Iris apple
Iris apple

Taking inspiration from a phrase by a Fashion icon Iris Apfel “I think a woman has her own style and knows who she is; she does n't have to dress for being 60 or 20 or 90 ”the products will find their customers by themselves and she will no longer be a question of target. Also in this case we are faced with a general contamination. For Brands and Stores, above all, communication and its methods will change. You have to be current and modern, abandon the obvious formalities and live on instincts, letting yourself be guided by style. The advice: be more instinctive and abandon personal data, it's no longer for anyone. The report calls this “Generation Correlation”.

The fourth theme concerns “feeling good is looking good”. Since the creativity crisis that was already mentioned in 2016 due to the need to speed up production cycles for fast-shopping, the opportunity to use sales levers related to other contemporary phenomena has increased. For example, wellness becomes one of these, a real industry within the industry. Feeling good in the car, wearing that bag, that shoe, practicing that sport with that clothing, taking care of one's diet, changing one's lifestyle all become emblems of a society that is increasingly screwing itself into a chain of hedonistic values and individualists.

The fifth theme is about “see-now-buy-now”. We've already talked about this before. Consumers want to buy now but accept not having the product instantly if what they are buying represents their instantaneous desire at the highest level. They are willing to wait a few days.

See Now and Buy Now
See Now and Buy Now

Nonetheless, the sales models of many commercial activities still massize the sale of the stock with the policy of persuasion to purchase instead of learning from the Online that it costs much less to indulge the customer and offer him instant gratification. For example, by expanding the online catalog we can still make a sale in the store if when we are unable to deliver it at the moment we can assure the consumer that he will still receive it comfortably at home in a few days.

The sixth theme is almost cyclical but today it represents the gospel in my work, we talk about organic growth. 2017 is considered by many analysts to be the year of organic growth in the Retail sector. It means that the geographical and globalized development made by large investments will be opposed by a local growth model which will aim to invest resources in local consolidation. It is a less expensive model financially but more demanding and risky. It means aiming at the relationship with existing customers, at one's own territory, at the chain of values ​​on which one has invested and built one's success. Here dynamics will come into play that will fight the increasingly steep spiral of promotions, sales and discounts by promoting a dynamic of nurturing of one's customers, returning to the old store-customer value chain but this time analyzing data, lots of data, from in-store tracking to online visits (so-called BigData). But don't forget that this is the same consumer who recently changed their buying habits. Confidence must return together with a better ability to focus on his needs and to predict them. Analysts foresee in this a strategic role for technologies that will be able to direct customers to ad hoc, limited edition, special edition products and more personalized, tailor-made products (BigData, Data Intelligence and Data Management Platform, In Store Tracking). This will reduce stock and its obsolescence and will also improve the in-store experience.

Tamsyn Lewis, an Olympic runner
Tamsyn Lewis an Olympic runner tests a sports eyewear in the wind tunnel

Think of a store that goes from 400 glasses on display to just 50 models, which can be customized using iPads in showrooming areas, with a look expert at your disposal who in the meantime, between a chat, accompanies you for a tea with a particular aroma and which offers you to take your measurements and make a mold of your perfect eyewear which after a few moments will become the basis for over 200 possible customizations based on your face, the color of your eyes and the length of your hair. Why shouldn't I go into such a shop? Why? once purchased, wouldn't you try to continue the experience at home, modifying the model and creating your own version calmly in front of your Macbook thinking about the occasions in which to use it? special evenings in which to amaze friends? at work for an important appointment? The emails you will receive will finally be personalized and will only talk about everything related to your in-store experience, the products you have purchased and the improvements that will be promised to you. Even the website of this company will no longer be the same, it will change according to your in-store shopping experience and will notice the product you are wearing. Well yes! crazy but not impossible at all, it's just the future!

The last theme, the seventh, obviously concerns technologies. Almost all the other six points talk about it, but in this case the Report defines it as "Upstream technology", i.e. the passage of technology from the protagonist to behind the scenes. We are talking about a new era where innovation will be perceived but it will not be technology that pervades its importance. We will perceive a general improvement. We will imagine that it is due to new technologies but we will not have direct physical contact with them. These "upstream technologies" will concern in particular some key processes of the Retail trade, in particular from payments to shipments.

Now it's my turn and before saying goodbye to the next appointment with "the shop of the future 2018" I wanted to leave you with my personal consideration:

“You will still make the difference but be careful, trade is becoming increasingly sophisticated, a blend of skills, technologies, capabilities and courage that go beyond our business. Get ready, indeed never stop learning and wanting to grow!” Cit. Luca Zambrelli

 

And finally, to this link find a video that resumes the main steps of the event this July organized by BoF's VOICES at the Sydney Opera House where the future of retail and commerce is discussed with important international guests.