Three retail trends to watch in 2018

Nike's Moscow flagship with sneaker dry-cleaning and engraving services

Physical retail is facing unparalleled challenges in the era of e-commerce. Innovation research and advisory company Stylus has identified three trends that will drive the sector through 2018 and beyond.

Brick-and-mortar retail is far from dead, but retailers have to take risks and become adventurous to give consumers good reasons not to do all their shopping online.

As such, a new breed of agile, future-proof brand spaces are on the way. Brands need to think beyond pure product and provide new-generation levels of service.

Here are three opportunities to mull over as the new year approaches.

Service-driven retail

The chance to sell product to the consumer is becoming a spin-off, rather than the driving force, of adventurous retail. Nordstrom Local, opened in Los Angeles in November 2017, sets the pace, with no merchandise stocked. Services include click-and-collect, returns and curbside pick-ups, as well as product personalisation, tailoring and alterations – even for non-Nordstrom products. Sub-spaces include a nail salon and a wine bar and coffee shop.

Looking ahead, we’re excited by the new flagship store of Nike, scheduled to open in early 2019 on New York’s Fifth Avenue. The fifth floor of the 69,000 sq ft store will sell no product. Instead, it will treat members of the NikePlus customer club to an exceptional level of service, providing access to “unique products, experiences and customization opportunities”, Nike said. Members will have access to Nike Expert sessions ­– one-on-one appointments with an expert for personal shopping and advice.

We also like Japanese sports footwear brand Asics’ latest concept store in Berlin, which opened in July 2017 and focuses on delivering “sound mind and body performance” services. Consumers can consult with personal trainers, athletes and physicians not necessarily associated with the brand.

The service-driven and even service-only store is no longer a concept – it’s a key way of connecting with the consumer beyond the digital space.

Care commerce

We foresee a rising demand for services that extend the life span of products.

Stores will help consumers to preserve their purchases, known as care commerce – complementing a fast-growing resales market that depends on product perfection. This trend will encourage repeat custom and extend lines of communication between brand and consumer.

This is particularly relevant for Gen Z and millennials, who like to customise their purchases and preserve their ‘assets’ beyond their normal shelf life. For the more entrepreneurially inclined, shopping can be as much about investment – purchasing to resell – as personal desire.

Brands are beginning to capitalise on this trend. Nike has installed sneaker dry-cleaning and engraving services in its Moscow flagship and French luxury brand Hermès has popped-up around the globe with colour specialists staffed laundrettes offering a free dry cleaning and dyeing service for owners of its iconic silk scarves.

The soft sell

In 2018, the hard sell will feel dated. Today’s shoppers, having researched their planned purchases through their smartphones, can often be better informed than sales associates. It’s time for retail to take a softer approach rather than simply directing consumers to product.

The softer sell resonates particularly well with teens and the young, who prefer to shop communally in stores (as well as online). Expect more brand spaces that become after-school/weekend hangouts.

These spaces will allow consumers to learn or test, defining who they can connect with or influence. Whether used as a long-term strategy or pop-up tactic, such concepts can really produce great consumer traction.

UK young fashion retailer Topshop’s VR water slide, from the summer of 2017, was a great example of a softer sell approach. The VR headset visuals didn’t display product, nor any mode of linking to e-commerce, but consumers queued up to participate.

Waterslide props, micro pop-ups, an ice-cream stall and summer-themed hair and nail bars all helped the retailer to create a great buzz in-store.

Another strong example of this ‘unconsumption’ strategy is Virgin Megastore’s Abu Dhabi flagship, a hangout where visitors (most in their mid-20s or younger) can perform on stage or control a DJ booth. It’s about creating a ‘third space’ between home and school.

The end goal may still be a sale – but not necessarily on the day or from the same physical space. Brands should explore selling tactics that build loyalty and deliver experiences, giving consumers reasons to stay with them for the long haul.

Stefanie Dorfer is a specialist in retail, visual communication and brand strategy. She monitors innovation and analyses disruptive shifts within the retail landscape for Stylus clients, reporting on everything from new store and digital concepts to consumer engagement strategies.

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