Tom Goodwin: what matters in retail in 2018
I’m not sure when our industry became so obsessed with what’s shiny over what’s profound. I’m not sure when we became so keen to use buzzwords that we didn’t check what they mean – or that they even have any meaning at all. As we look to the year ahead it’s my personal belief we’re not thinking straight.
Amazon Go store
With this mindset, some thoughts for retail in the year ahead.
Beware of the distractions
Voice is a perfectly nice niche UI, a sort of new right mouse click, that I believe will end up full circle having essentially no true effect on marketing and brands whatsoever. AI is indeed the future, but it’s about seven entirely different forks of technology, most of which have been around for ages. To gather it as one thing and to say, “it’s here” is laughable.
Blockchain won’t change our industry because it’s solves a problem inelegantly that we can solve in better more simple ways, but that most people don’t want to. Augmented reality (AR) is only a device to get noticed in trade presses, not sell more sofas. If it was useful, it would kill our phone batteries so fast people would complain and all while warming our hands with overstrained processors.
The middle is dead
Luxury stores and brands continue to thrive as the rich get richer and the middle get more keen to pretend they are. Off price retail will continue to thrive because most people have less disposable cash. It is mid-priced retailers in any sector that will continue (this isn’t new news) to struggle.
Be fun or slick
Retail will also bifurcate into easy and fast and the other extreme fun and fancy. From Amazon to Argos, to Iceland to Ulta, we see the continued rise of stores that make shopping a surgically fast experience. A previously male version of shopping, the cavemen like hunting down things that are unmemorable and easy. Procurement more than delight.
At the other end, stores like Tiger, Sephora, Lululemon or Nike TechBook, that are fun, content rich, experiential shopping experiences where you spend time and enjoy the moment will also do well, but this is harder.
It’s just selling stuff
We’ve had online and offline and through the line and omnichannel, and now finally retail executives understand what every single normal human being has known for years: It’s just buying stuff how we want to. It’s not mobile commerce, or direct or ecommerce, it’s just the thing I want in the best way possible. Consumer journeys now straddle these made up lines so much, we need to abandon any idea that it’s about our processes, logistics supply chain and cost centers, and instead work around people.
We keep thinking voice or e-commerce or avocado toast means the death of brands and advertising but this is total nonsense. In fact, much like our relationship with music is with singles and not albums, our relationship with news is with articles and TV with TV shows, not publishers and TV channels. The role of retailers as a bundler is now hugely under threat. Likewise the role of the end brand is more vital than ever.
Choice architecture means people increasingly have the mentality of, “I want some UGG boots and I don’t care where they are from, find me a Samsonite suitcase, a Sonos Play One, a Frette BathRobe, a iHome smartplug fast and cheap and I don’t care how.” The entire role of stores is diminished, but the trust and meaning in the product brand is stronger than ever. If you are a retailer, you need to rebuild what your place in the world is and fast.
You’re the first to know, but I have a dream to make t-shirts that offer slightly subversive commentary on the general madness of social media in 2018. “It’s not Art unless you Instagram it” is the best slogan I’ve come up with so far. If I wanted to do this in 1990, I’d need to find a local t-shirt maker, rent some store in NYC, spend a fortune on supplies, buy a till, staff the store – it would be a $100,000 of investment before I found out it was a terrible idea. Today I can outsource the slogan development and t-shirt design on Upwork, use Alibaba to find someone in China to make them and then use a drop shipper to deliver them direct to customers. I could use Shoppify and Squarespace to make a ecommerce site. I could get customers with some Facebook ads and some Instagram hacking. I could likely automate most of the work and give the manual bits to someone I find via Fiverr.
Automated subscription retail
There are quite a few things we need to buy regularly, but that are not the most interesting things to think about in life: Cat food, laundry detergent, batteries, coffee pods, toilet bleach…We don’t really like thinking about these things. Everyone keeps thinking the dream is that every time you want some deodorant, all you have to do is press some large plastic button in your cupboard, and magically a single pack of deodorant arrives in the mail, for a reasonable price you were comfortable not confirming in advance. Many people think the future will be saying, “Alexa, order me some laundry detergent,” and after a mere two minutes of Alexa sharing how big it is (which can’t be visualized), what smell it has, how much it costs, and maybe some serving suggestions, and you’ll say “order.” Then three days later, a single pack of detergent will arrive in such an inefficient way that nobody has actually made any money. In an improved world, I’d soon expect to see subscription commerce dominate, wherein you determine groups of four to ten items you need each month and four to ten items you need every six months, choose your preferred brands and away you go – set it and forget it, if you will.
Because of all the time we’ve saved not thinking about dishwasher salts, or about what our shampoo brand choice will convey about us to our friends, we have a bit more time and energy to think about the things we care a more about. As a result, I think it’s highly likely that tiny brands, authentic brands, companies with something to say, will start to thrive. The candle that comes from a man with a wooden leg, the leather cushion from the company that helps support local schools by offering llama rides. We’ve seen the rise of Shinola and the way they’re changing Detroit, Allbirds and a New Zealanders legal love affair with sheep…from Haeckels to P.F Candles to Aesop to Le Labo, we can expect to see more brands try to give us meaning to our sometimes called empty, soulless, futile consumerist lives.
Soon you will be able to buy everything you see that is coming to you on a screen with one click, or one press of your thumb, or a scan of your Face, or shouting “I want” in a Californian accent at the same time… or something like this.
Smart companies like Care/Of, Sons of a Tailor and Function of Beauty are all doing a great job of using the most personal data we have to make as close to custom made products as possible. This is all very smart and predictively a bit exciting, but I’m interested to see if perhaps we could similarly make jeans and shoes that fit? Maybe one “XL” label could be a little bit more like “XL” in other stores? Essentially the entire profit margin of online fashion is destroyed by $351bn lost sales every year due to clothing not fitting properly. It will be interesting to see companies like http://mysizeid.com/ address that.
I’m not sure how many more ads of hot people holding things we can take before we feel like maybe these people are not authentic brand lovers, but people being paid money to hawk tea and bikinis to those who love to nonchalantly swipe their social feeds. Influencer marketing can work amazingly – I mean, have you heard about my hypothetical t-shirt line? This style of marketing won’t die fast or soon, but in 2018 and 2019 it runs the risk of being a golden goose that gets killed.
This all seems very complex and dynamic, but above all else remember one thing: Please make retail simple. I want to be able to buy a duvet cover without using an AR lens and buying with TouchID. I’d quite like to shout at my TV to buy the dishwasher fluid I see advertised, I’d like to be able to reorder the same Rag and Bone t-shirt by scanning its sewn in label. I’d quite like Jeans as a subscription. I’m not your everyday consumer, but I’m not unhelpful to think about, because I spend most days thinking about what those consumers actually want out of brands.
Tom Goodwin is Zenith Media's executive vice president and head of innovation and a regular columnist for The Drum.