- Jackie Mallon |
The WGSN Futures 2017 Summit New York is over for another year leaving us much to reflect upon. Futures is an annual day-long event held in seven cities worldwide during which experts in global trend analysis take the stage to address the overarching shifts in technology, culture, and the marketplace which they have determined will shape tomorrow. In the audience are designers, brand leaders, and business strategists united on their permanent quest to stay relevant, grow, and anticipate the needs of future consumers. In assessing where we stand currently we can position ourselves for what’s next. So for easy digestion FashionUnited has decided to separate the day’s insights into a three-part review.
We’ve been told we’re living through a sort of ‘retail apocalypse’ but is it just a buzz phrase or a reality check? It turns out it’s a bit of both although the reality is biting. Retail is undergoing such drastic shifts at such an exponential speed that statistics like the following barely make us bat an eye: over 3137 specialty apparel retailers will close this year. And half of that number are 16 major companies that once seemed too big to fail.
Cue that reality check. Planned store openings outnumber the closings. The mood, while not yet bullish, is not gloomy. New challenges raise new questions leading to a more creative retail landscape. As malls across the US lie empty, they are now leasing rotating retail and ‘permanent pop-up’ space to smaller businesses. Although most can credit Amazon to some extent for their demise, they are also looking to the online giant for rebirth with many of them among the slew of bidders nationwide vying to house Amazon’s second US headquarters.
If the size fits
Media negativity around down-sizing is misleading as the new responsible approach to retail is ‘rightsizing’ which asks retailers to find the right balance for their business. For example, where once car dealerships occupied huge lots on the outskirts of town, Tesla set up a small sales plant, which it calls a ‘retail kiosk,’ in the center of town, perfectly in keeping with the ethos behind their size and energy-efficient product. A treasure hunt mentality appeals to consumers as it gives them the sensation they are stumbling upon a special discovery, a one-off, which is an experience impossible to execute in big box merchandise-heavy stores.
Advanced retail therapy
’We no longer operate in a straight transactional market,’ says WGSN’s Sydney Morgan-Petro, and this could not be demonstrated any clearer than by looking at Nordstrom’s latest store opening of just three weeks ago. In the cosy 3000 foot West Hollywood location no clothes are sold, but experience is. Customers are invited to visit and hang out with friends, drink wine, beer, sip espresso, squeeze in a manicure as well as get purchases hemmed, make returns or speak to a stylist. “Shopping today may not always mean going to a store and looking at a vast amount of inventory,” Nordstrom’s senior vice president of customer experience, Shea Jensen, told the Wall Street Journal. It’s an advancement of the Bonobos modern success story which started with brick and mortar allowing customers to try on clothing they would then order online. Following the success of Rent The Runway, more stores will follow the temporary ownership model, with DSW not only set to roll out shoe rental, but shoe repair, and storage within the next year.
Consumer and retailer in lockstep
Henry Davis, COO and President of beauty brand, Glossier, which has enjoyed a remarkable 300 percent annual growth, and operates a penthouse ‘showroom’ in Soho (’it’s always full!’) where customers can come and chill with the brand, says, ‘Everyone has lost the e-commerce game. Amazon has that won and attempting to play their game, you will lose.’ This offers rightsized companies the opportunity to reconsider what they can provide for their consumer. Davis calls third party sellers ‘a sinking ship’ and cites Estée Lauder as headed for trouble with 46 percent of its revenue coming from department stores which are already some of the most hard-hit of the retail apocalypse.
New rules of engagement
‘There are still a lot of companies following the old school paradigm from the 80s and 90s,’ agrees Marc Schumacher, Managing Director of Liganova, ‘the BrandRetail company’ who is happy to be freed from an arena which had ‘wholesalers working against retailers working against e-tailers working against consumers.' Tomorrow’s rightsized brands are unencumbered by any of this convoluted co-dependent, what’s-in-it-for-me mode of doing business. A retailer’s offline and online presences are two sides of the same coin and must co-exist seamlessly for the future omnichannel shopper. ‘The customer of the future will never want to be separated from the brand,’ says Davis. ‘There can be no distance between.’
So step forward, retailers, and mind the gap.
By contributing guest editor Jackie Mallon, who is on the teaching faculty of several NYC fashion programmes and is the author of Silk for the Feed Dogs, a novel set in the international fashion industry.
All photos author’s own for FashionUnited.