Categories
business e-commerce Retail sustainability technology

From holograms to responsible packaging: 10 must-read retail innovation lists

This year has seen continued breakthroughs in retail innovation, with brands exploring new ways to interact with consumers, whether that’s through the physical store, virtual spaces, or new touchpoints like vending machines. 

2019 has also been an impressive year for sustainable innovations, with everything from creative store design and technological transparency, to responsible packaging solutions and the rise of rentals.

Here, we reflect on 10 of our must-read retail innovation articles from the year.

8 brands deploying vending machines as smart retail solutions
Mulberry x Current Global Vending Machine

Artificial intelligence, social media buzz and customer acquisition tools are just a few of the strategies behind vending machines being used as a key part of today’s retail experience. In this story we explore how the technology has been applied to brands including Mulberry and Adidas.

4 technologies aiding in-store navigation
Gatwick’s in-app navigation

Big box retailers including Walmart’s Sam’s Club, Home Depot, Lowe’s and Target are using a variety of interesting wayfinding technologies to improve customer navigation inside the physical store. This piece dives into the role of innovation for more efficient customer journeys.

5 brands pushing conversions through virtual storefronts
Lego’s AR-activated experience

Brands including Macy’s and Lego are using virtual experiences in physical locations to provide shoppers with the benefit of an interactive in-person experience without needing to carry inventory. Here, we look at how these “invisible” or augmented reality storefronts are driving sales, collecting data and boosting branding efforts.

7 ways fashion brands are harnessing hologram technology
Alexander McQueen’s hologram show

The fashion industry has been experimenting with holograms for some time, using them as both elaborate marketing techniques, as well as more immersive in-store opportunities aiming to drive brand engagement. In this piece, we take a look back at some of the best use cases from the likes of Alexander McQueen and Ralph Lauren.

9 brands pushing sustainable store design
Ganni’s sustainably designed store

With sustainability an increasing priority on the agenda for fashion and retail businesses around the globe today, attention is also turning to their brick-and-mortar stores – how they’re resourced, designed and constructed. Here we explore how the likes of Stella McCartney through to Ikea are approaching it.

4 innovative retail fulfilment methods to know
Ford’s delivery robot

With the on-demand economy continuing to fuel consumer desire for instant gratification, innovation in delivery continues to rise, from crowdsourcing to the latest in robotics. Explore how tech solutions are shaping efficiency in the last mile, here.

7 brands regaining consumer trust through transparency
‘I made you clothes’ campaign

Enabling transparency is a key focus for fashion businesses today, but with rising concerns of greenwashing – from misleading PR-led campaigns to the increase of fake news – consumer trust is at an all-time low. As a result, brands are having to work harder than ever to prove their authenticity in the matter.

5 brands using gamification to drive shopping
Nike’s React Land game

Brands and retailers are jumping on the growth of the gaming market and increasingly using ‘play’ mechanics as a way to encourage shopping. Here we dive into why gamification is estimated to be a $40bn market by 2024 and explore those making the most of it already.

4 effective ways brands are tapping into the rental market
Ba&sh’s NY store

The rental market boom is sending a clear signal to brands struggling to survive in the current retail climate: it is time to adapt to changing purchase behaviors, or risk losing market share. In this piece we look at the varying benefits of stepping into this space, from sustainability to data capturing.

8 brands turning to responsible packaging solutions
Toad&Co partnered with LimeLoop

The rapid rise of the e-commerce era has seen an equally colossal increase in plastic packaging used by brands around the world, something those at the forefront of sustainability are now looking to change. Check out some of the best alternatives introduced by the likes of PVH to MatchesFashion.com.

How are you thinking about innovation? The Current Global is a transformation consultancy driving growth within fashion, luxury and retail. Our mission is to solve challenges and facilitate change. We are thinkers and builders delivering innovative solutions and experiences. Get in touch to learn more.

Categories
business data Podcast product Retail Startups

Neighborhood Goods: Making retail relevant

Physical retail traditionally exists in a vortex of information, which doesn’t make sense for brands these days, says Matt Alexander, co-founder and CEO of new department store Neighborhood Goods, on the latest episode of the Innovators podcast. 

The company’s inaugural space, which launched in Plano, Texas, in late 2018, carries a selection of new and established brands in an environment that is hyper relevant to both its location, and its customer, through the use of data. 

Alexander’s view? Success lies in information. “If you’re a direct-to-consumer, digital-native brand, you’re going to look at this world, and you’re going to say: ‘We should be able to capture a certain amount of informative data to dictate how we should run that store, and how we should merchandise [it]’.” he explains. “That’s what they do on the web all day long. The moment you land on any of their websites, they know a huge amount about you, and exactly how you’re interacting with that site. And they optimize around it.”

His brilliant phrase: it’s all about operating in an economy of relevance. 

It’s for this reason many legacy retailers are otherwise struggling, he explains. In a basic sense it comes down to them not creating the goods, services and experiences that they know for fact the consumer wants. There is therefore a lot for them to learn from D2C incumbents – from Everlane to Casper – who have placed this front and centre in their strategies. 

Join us for this episode as we also explore why experiential retail needs to go beyond just putting a ball pit in the store, how modern brands are using the physical space for entirely new reasons, and why Alexander believes legacy retailers may still have the ability to play catch up after years of ignoring consumer needs after all.

Listen here: Entale | Spotify |  Apple Podcasts | Android Google Podcasts | Stitcher | RSS

Catch up with all of our episodes of the Innovators podcast by the Current Global here. The series is a weekly conversation with visionaries, executives and entrepreneurs. It’s backed by the Current Global, a consultancy transforming how consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more. 

Categories
data Editor's pick mobile Retail technology

5 ways 5G will impact retail

Last month, mobile phone network Three ‘switched on’ its 5G service in London through an immersive experience with fashion designer Henry Holland.   

The “Living Room of the Future” initiative saw visitors able to try on mixed reality headsets from Magic Leap, to enter into a world consisting of everything from a mindfulness moment, to a gaming experience and the delivery of (virtual) House of Holland shoes by drone to your door. 

5G is expected to ramp up in 2020 on a global level. Further cities in Switzerland, Spain, Germany and Italy have already begun adopting it. Meanwhile, in the US, although four cities have turned on the signal, the technology is tied up in a trade war, since China’s Huawei is the dominant 5G supplier. Regardless, the latest Ericsson Mobility Report predicts there will be more than 10 million 5G subscriptions globally by the end of this year, and that 5G population coverage is forecast to reach 45% by 2024.

In it simplest sense, 5G is just a faster version of 4G – about 20x the speed in fact. That coupled with almost no latency, means the new networks will nearly eliminate lag time. This is big news for mobile of course – opening up paths to purchase in even the busiest of crowds for everyday shoppers. 

But its existence will also help power other tech advances, from machine learning to digital realities. Add in features like low energy consumption and higher reliability, and it brings an opportunity for the retail industry to enhance the consumer experience in the physical store with a number of seamless real-time functionalities, leading to increased engagement and conversions. 

As a result, now is the ideal time for retailers to start planning how their stores and interfaces will look when 5G becomes widely available. Here are 5 ways we see it having an impact… 

Connected Spaces

Connectivity in our physical stores, means devices that can constantly exchange data with each other – also known as those under the header of the Internet of Things (IoT). To do so, they need a fast, reliable network that doesn’t require too much power. 5G networks will achieve a 90% reduction in power consumption, guaranteeing up to 10 years of battery life for low power IoT devices. This means, for example, that more retailers will have access to smart shelves like the ones Amazon implemented in its Amazon Go stores. This technology uses dozens of sensors to provide real-time inventory visibility and update pricing according to demand. 

Key tech we’re tracking: dynamic pricing, automated checkouts, connected fitting rooms, automatic replenishment

Amazon Go Store
Immersive Experiences

Augmented and virtual realities use a lot of processing power and cellular data. With the increased capacity of 5G networks, retailers will be able to create richer, more detailed experiences when integrating their physical and digital worlds. This will make technologies that we’re already experimenting with, and seeing consumer adoption of, only more of a possibility. The result will mean shoppers are able to immediately check product materials or ingredients through the use of smart glasses or their smartphones, for instance. Those same apps will also guide customers to the products they want by projecting directions into their field of view in real-time as they navigate the store space.

Key tech we’re tracking: immersive interfaces, gamification, wayfinding

Puma’s new flagship store with gamification
Higher Efficiencies

Artificial intelligence will also thrive on IoT devices via 5G. That’s not to say the AI algorithms themselves will change, but that the higher network will enable more accurate real-time data to flow, ultimately facilitating smarter systems. In retail, for instance, managers will be able to delegate more operational and inventory decisions to automation. This means greater efficiencies as well as accuracies on things like forecasting inventory quantities so as to optimize stock levels, leaving sales associates to spend more time on customer care. Having stock in the right place at the right time will also decrease the risk of losing customers to competitors, as product availability will be more accurate. 

Key tech we’re tracking: retail analytics, inventory visibility, demand forecasting, endless aisle  

Walmart’s endless aisle
Personalization

With lower latency, retailers will also be able to respond to purchasing patterns and behaviors with immersive, tailored content in real-time. Implementing 5G in-store will allow for greater interactions and data collections between sales associates and customers. Real time data could be tracked to create personalized adverts or offers based on the preferences of individual customers, helping to increase the incentive to buy. 

Key tech we’re tracking: marketing automation, personalized promotions, AI recommendations, product search tools, clienteling

Nike’s Melrose store
Fulfilment

The implementation of 5G will also revolutionize logistics by improving  efficiency in fulfilment tasks and increasing the speed of transportation. Greater connectivity and improved reliability will help communications between brands, couriers and consumers. The full capacity of 5G will eventually also enable the roll out of automation in transport and warehouses, thanks to improved processing of the vast amounts of data required in real-time. 

Key tech we’re tracking: smart warehousing, robotics, automated vehicles

Lowebot assisting a consumer

Additional reporting by Larissa Gomes.

How are you thinking about retail innovation? The Current Global is a transformation consultancy driving growth within fashion, luxury and retail. Our mission is to solve challenges and facilitate change. We are thinkers and builders delivering innovative solutions and experiences. Get in touch to learn more.

Categories
Campaigns Retail

Hollister hosts Twitch live stream in-store to celebrate video game launch

Hollister is taking to live streaming video gaming platform Twitch to celebrate the launch of a new videogame in its Los Cerritos store in California tomorrow.

The teen fashion brand is inviting two Twitch streamers called Fuslie and J.D. Witherspoon, to play the new Crash™ Team Racing Nitro-Fueled (or CTR for short) video game live in-store at 5pm. The game comes from Activision, which also created popular titles such as Call of Duty.

Shoppers will be able to watch them online via Twitch or in real-life at the Los Ceritos store. A series of activations are also taking place across three Hollister locations including Los Angeles, Chicago and New York, all of which will host gaming lounges and PS4 systems connected to video screens to create a more immersive experience for customers.

The last part of the activation has Hollister influencers, including Adelaine Morin, supporting the launch of the video game by appearing at one of the three stores to host a friendly game competition and interact with shoppers.

“We’re constantly seeking opportunities to provide authentic engagement with our customers that align with their interests. We’re looking forward to bringing this unique experience to our customers,” said Michael Scheiner, SVP of marketing at Hollister. “These events will create a collaborative, inclusive group activity for all customers to connect with our brand, and each other.”

For those that can’t make it to any of the locations, Hollister will make the the CTR game available to download in an additional 100 US-based stores, as well as online.

As the boundaries between physical and digital spaces are blurring, the world of gaming is becoming increasingly important to the fashion industry. The video game Fortnite, for example, made headlines in February when 10 million people tuned in for a live stream from DJ Marshmello. Meanwhile, in April, fashion label Moschino partnered with The Sims for a digitally-inspired capsule collection.

Are you thinking innovatively enough in your brand messaging? We’re all about finding you the perfect partners to do so. Current Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

Categories
Editor's pick Retail

Neiman Marcus blends retail and tech at Hudson Yards megastore

Department store Neiman Marcus is claiming a stake of the $25bn Hudson Yards development opening in lower Manhattan in NYC this week with a megastore that merges traditional and omnichannel retail.

The space, which takes up five out of seven floors of the retail complex, is the retailer’s latest play at engaging with a new luxury consumer that is not only seeking products, but experiences and education alongside.

On the lower floor, for example, the retailer is hosting a kitchen for live demonstrations, while Neiman Marcus Live is a space on the middle floor that can hold up to 100 people for events like talks and Q&As with fashion designers and industry pioneers. The store also features a bar, named Stanley, which overlooks the Thomas Heatherwick-designed Vessel structure, a larger-than-life center piece for the Hudson Yards complex.

Technology is being blended into the space in order to give the luxury customer a one-to-one, tailored interaction with sales staff.

The Current Global’s CTO, Scott Emmons, who is the former head of the Neiman Marcus iLab, and was responsible for the technology execution in the new store before his departure, said: “We applied creative approaches and partnerships so that the consumer-facing technology was both useful to the shopper, and fit naturally into a very luxurious retail environment.”

A smart fitting room at Neiman Marcus

This includes a smart fitting room where customers can ‘check in’ upon entering, which will then act as a communication tool between shopper and sales associate. The customer can request new items, different sizing and even signal they are ready to check out through a personal screen, which is then communicated to the associate’s mobile POS system.

The fitting room experience was designed to easily be updated with new capabilities in the future, such as self-checkout or recommendation technologies, as well as enhance the ever-important role of the associate.

“Technology in this instance, is being used to not only deliver an optimal customer experience but act as a digital exoskeleton to supercharge the capabilities of the sales associates,” Emmons added.

It’s for this reason he believes this store is an example of what retail needs to look like in the future. “New York is one of the toughest places in the world to be a retailer and stand out from very capable competitors. Technology is not the only answer but when combined with the visual aspects, the right merchandise, experiential aspects and so forth, it can put you over the top.”

“This is how we think about things at the Current Global – removing technology from its vacuum and into the wider context of creative innovation in order to meet pressing consumer demands. At the end of the day, traditional retail must be weaved together with modern tech to enable customers to be seen and treated like individuals, and not market segments. Technology for the sake of it will never respond to basic human needs of having emotional connections when purchasing luxury.

“At a time when so many department stores are failing, what Neiman Marcus has pulled off is an inspiring example of what luxury retail should be. It’s a combination of great experience, great staffing, great environment and the right tech.”

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so. The Current Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

Categories
Editor's pick Retail

3 key takeaways from NRF’s Big Show 2019

NRF’s Big Show landed in New York this week and featured innovations across the spectrum increasingly focusing on seamless and personalized experiences.

In this sense, technologies such as artificial intelligence and the use of data are becoming essential tools to serve the customer tomorrow. Conversations on stage echoed the tech on display on the startup floor, looking at how brands are striving to meet those needs.

Data needs to strike a balance

On an exhibition floor stacked with companies that are leveraging data to better serve the customer, conversations naturally turned to how brands can use it successfully but most importantly, responsibly. Following the Facebook and Cambridge Analytica scandal and the new GDPR regulations in Europe, it is incumbent on brands that want to deploy data to be transparent and clear with how they will use it.

From executives at Ralph Lauren, through to smaller names like LA-based accessories label Hammit, tracking behavior can bring enormous benefits, speakers said. From helping choose product assortment to how to better serve customers online, brands shouldn’t be shy about talking to their methods. If the consumer sees they are getting a service that is relevant and saves them time, they will appreciate it, they noted.

For Aaron Sanandres, co-founder and CEO of menswear label UNTUCK.it, the challenge is how to use that data to serve the customer in-store without sounding too intrusive or, in his own words, “creepy”. While online a “Welcome back, Aaron” greeting might seem like a pleasant surprise, in person, the customer might have an entirely adverse reaction, he said. Getting the balance right is tricky: “Doing that in a way that’s inviting and not off-putting is the challenge.”

Physical retail still rules

Retailers and brands are deploying physical retail in increasingly creative and flexible ways, showing naysayers that the channel is far from dead. Arguably one of its biggest cheerleaders is Story founder, and now Macy’s brand experience officer, Rachel Shechtman, who took to the stage with Macy’s CEO Jeff Gennette, to explain how she is thinking like a media company to deliver content – and merchandise – that is relevant to the consumer up-to-the-minute through retail.

For smaller brands, the brick and mortar experience is now an invaluable tool to allow them to become more granular in their approach. While a brand’s retail experience always has to have an overarching layer of consistency, it is by building small moments that are relevant to a specific demographic, at a specific location, that creates a stronger sense of community and loyalty.

For John Frierson, president at LA-based retailer Fred Segal, brands born digitally do this well because they have already worked out all of the kinks of providing a frictionless experience online. They can therefore take a fresh approach when venturing into physical. “When they come down to the real world they are not looking at traditional retail metrics, but rather at storytelling. It then becomes a much more interesting experience,” he said.

Customers and employees sit at equal measure

There is a lot of conversation on how to be customer-centric, but the employee satisfaction piece is more important than ever – both to attract the best talent in an increasingly competitive market, but also to create an internal environment that lives and breathes the company’s mission, speakers commented.

In a conversation about building leadership, Levi’s CEO Chip Bergh believes the company taking a stand is not only important for the consumer it serves, but also because it is what his employees expect of him. CEOs, he said, have the responsibility to themselves and to others to give back.

Brandless founder Tina Sharkey agreed, saying its DNA to be purposeful not only helps repeat customers – wherein those who understand their social mission shop 80% more frequently than those who don’t – but employee retention too. “Employees want to work at a place where they feel they have movement and meaning in their work,” she explained.

Patagonia CEO Rose Marcario noted that while the company’s mission statement is a hugely attractive sell to consumers, it has equal importance to its employees. “You have to inspire the people that work for you into a greater and bigger purpose than themselves, and for us it’s saving the planet.”

How are you thinking about retail innovation? We’re all about finding you the perfect partners for your innovation strategy. TheCurrent Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

Categories
data e-commerce Retail

Amazon’s latest retail location features 4-star rated product only

Amazon's 4-star store
Amazon’s 4-star store

Amazon is opening a new retail store in New York today featuring a selection of products that have a minimum of 4-stars in their customer reviews.

Unceremoniously dubbed “Amazon 4-Star”, the items sold are specifically selected on the precedent of being top sellers, or new and trending on the site. Collectively the items currently on display have 1.8 million 5-star customer reviews, with an average product rating of 4.4 stars.

“We created Amazon 4-star to be a place where customers can discover products they will love. Amazon 4-star’s selection is a direct reflection of our customers—what they’re buying and what they’re loving,” Amazon shared in a blog post.

The brick-and-mortar location will feature devices, consumer electronics, toys, books and games – as well as a range of items for the kitchen and home. Items that were particularly well received will also display quotes from online reviews on small paper cards.

Mirroring the structure of the Amazon website, the shop will also feature areas with product bundles,  such as “Trending Around NYC”, “Frequently Bought Together” and “Amazon Exclusives”.

Digital price tags in-store will ensure that the pricing will stay exactly the same as on the Amazon website, with Prime members getting a special membership discount.

Another clever integration by Amazon is that customers have the opportunity to trial its Alexa voice assistant while in store, thanks to the presence of the best-selling Echo Dot, which has an average customer review of 4.5 stars, with 5,600 customer reviews. This also follow the launch of a range of new Alexa-enabled devices last week, including a smart plug and a microwave.

Amazon's 4-star store
Amazon’s 4-star store

Amazon’s continued push into physical retail is a great example of how data from e-commerce can shape the product selection in-store. By further gather data specifically to the neighborhood, or in this case, city location, it is further personalizing the customer experience and incentivizing in-store visits.

How are you thinking about retail innovation? We’re all about helping you build innovative integrations and experiences. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology, powered by a network of top startups. Get in touch to learn more.

Categories
Retail social media

Revolve to launch branded suite and store at Vegas hotel

Revolve at Palms Casino Resort
Revolve at Palms Casino Resort

Online retailer Revolve has announced it will open a branded suite and retail store at the Palms Casino Resort in Las Vegas next year.

In the past, Revolve has done similar hospitality takeovers during Coachella Valley Music & Arts Festival, where it rebranded existing hotel properties into the Hotel Revolve and invited VIP guests to stay throughout the duration of the music festival. The permanent branded suite, however, aims to withstand time, versus “a moment in time”, co-CEO and co-founder Michael Mente told WWD.

The suite will become a way for the company’s roster of influencers, as well as the general public, to further experience the brand’s universe whenever in town.

Moreover the 1,000-square-foot store, which is only the second physical store by Revolve after its invite-only Social Club flagship in Los Angeles, will have merchandise that reflects the ritual of getting glammed up to go out in the city. Additionally it will also be an opportunity to grow the retailer’s booming swimwear category.

“Those are segments where we feel our brand really resonates with that female Millennial so I think that’s a perfect location,” Mente added. “Every aspect of the fun life that you would live in Vegas, Revolve is very strong in and has the right merchandising mix for the consumer.”

Since launching in 2012, Revolves strategy has centered around supporting the lifestyle of young women who travel and experience life to its fullest. Consequently, the brand’s approach to influencers, as well as popping up in timely events such as Coachella, has become an increasingly important tool for engagement.

“We think that with the Palms it’s the perfect partnership and perfect location for us because the clientele they are seeking to attract and develop and the clientele that the brand attracts are similar,” adds Mente. “That alignment on the same focus and the same consumer was a natural fit.”

Revolve will be joining Palms Casino Resort as it undergoes a $620m renovation, which includes the opening of many new retail and food establishments. For the hotel, the brand’s presence represents an opportunity to further tap into a new audience, and attract more of its top clientele, which hails from Los Angeles.

How are you thinking about retail innovation? We’re all about helping you build innovative integrations and experiences. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology, powered by a network of top startups. Get in touch to learn more.

Categories
Editor's pick Retail

Heist opens first physical store, inspired by e-commerce

Heist Studios
Heist Studios

Heist Studios is opening its first temporary brick and mortar space in London, and it’s taking its cues from how customers have shopped online to do so.

Since launching in 2015, the direct-to-consumer (DTC) hosiery brand has held its community at the heart of everything it does – from its R&D process to advertising campaigns. With the launch of its first ever physical space, called the DemoStudio, it is taking learnings from online into the real world. For example, store associates will be trained by Heist’s existing online customer service team, who has been interacting with shoppers since the beginning.

“Until now, Heist has only ever existed online,” said Joanna Bell, head of retail for the brand. “When we made the decision to open a store, we had to ask ourselves, what does Heist look like in person? How do our brand, values and offering translate?”

Excelling in customer service is an overarching characteristic many successful DTC brands have. For this store, customers will also be able to try-before-they-buy, which is a feature already offered on its site, and a hosiery industry first. Similarly most other DTC brands, from mattresses to luggage, offer a ‘100 day guarantee or your money back’ scheme to encourage customers to take the plunge and buy from a new player in the industry.

At the DemoStudio, unwanted tights from the try-before-you-buy experience will be donated to Smart Works, a charity that provides interview clothing and coaching to long-term unemployed women hoping to enter the workplace. Customers will also be able to drop off any interview-ready clothing donations in-store. The brand is encouraging the activity on its Instagram page, where it gives customers tips on what clothing is appropriate to donate.

Heist Studios
Heist Studios

The Heist DemoStudio will be open from September 8th until January 4th in the Seven Dials area of Covent Garden in London, which is also where luggage brand Away opened its first ever international store last week. As retail experts and the media declare the death of the high street, the opening of two DTC stores in the same neighborhood is an indication that reports may often be exaggerated.

“The highstreet is not dying. Brands that fail to evolve are,” adds Bell. “We see an exciting future on the high street for brands to grow stronger by bringing the best of both online and offline worlds together to improve customer experience.”

Earlier this summer, we also spoke to Jen Rubio, president and co-founder of Away, for TheCurrent Innovators podcast, where she talked about the industry’s radical shift in physical retail. As legacy brands and mega stores shutter, the real estate industry is increasingly opening up to the idea of new players who often enter the field by hosting pop-ups to measure demand – which is part of the strategy for both Away and Heist – to then launch permanent brick and mortar spaces thereafter.

Also previously featured on the podcast is Toby Darbyshire, CEO of Heist Studios, who spoke about the importance of community and inclusivity when innovating in tights.

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so.TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

Categories
Retail

The Future of Luxury: First Comes the App, Then Comes the Store

Red Home

Commerce is changing in China at rates unseen in any other market. Possibly the biggest change is in the attitudes and shopping behaviors of modern Chinese consumers. These shoppers demand the kind of convenience technology can provide, yet are increasingly seeking meaningful ways to engage with brands in the real world.

Despite China’s love of online shopping, e-commerce platforms have discovered that – to meet the needs of modern Chinese consumers – having an online presence is no longer enough.

Digital giant Alibaba’s “New Retail” strategy attests to this phenomenon. By investing in brick and mortar stores, Alibaba is pushing forward the integration of online and offline retail to create a seamless omnichannel consumer experience.

Their main competitor, JD.com, is embracing the trend too. The e-commerce company says it plans to open a total of one million smart convenience stores in the next four years, claiming that they will open an average of 1,000 a day in 2018. Many of these stores will be unmanned and allow customers to pay with facial recognition.

On June 16, China’s popular social e-commerce platform Xiaohongshu (RED)became one of the first of the smaller e-commerce players to join the giants in their journey into brick-and-mortar, by launching its first offline store RED Home in Shanghai. In just a couple of weeks, the store has proved popular with Xiaohongshu’s loyal online user base.

The store is a case study in the future of retail and how to create a space specifically designed for the young, modern Chinese consumer, incorporating the major trends of Chinese retail.

1. Socialization and community

Xiaohongshu representatives often emphasize that it is first and foremost a social platform; e-commerce is a secondary component added in response to the needs and requests of its community.

In an interview with Chinese tech media outlet 36KR, Xiaohongshu explained that the main goal of the offline store is not to increase sales but to be an experientialplace for its community to meet offline.

The store features a café and ice cream shop deliberately located adjacent to the home goods department, offering customers the chance to hang out and spend time with each other and the products.

The store’s inventory does not include all items available on the Xiaohongshu platform, instead featuring only the most highly ranked products from its app. In this way, Xiaohongshu is using the preferences of its online community to curate the offline store’s inventory.

2. Technological Integration

Augmented reality in store

Constant exposure to new technologies and innovative social media campaigns have become an everyday part of Chinese consumers’ lives. Physical shops need to adopt these technologies and integrate virtual activities into real life, in a way that is practical for the consumer.

For example, beauty retailers including the Yves Saint Laurent store in Shanghai have added augmented reality screens that use facial recognition to enable customers to virtually try on different makeup looks. Beauty and skincare are the most popular product categories on the Xiaohongshu platform, and so this technology was also added to the app’s new offline location.

The core feature of the Xiaohongshu app is product reviews, an aspect that has been seamlessly integrated into the offline experience. Instead of the customer pulling out their phone to search for reviews online, the offline location offers screens located throughout the store. Customers can bring any item in the store over to the screen, and the screen will then pull up review posts about that particular product on the Xiaohongshu app.

3. Experiential

RED Home Claw machine

For brands looking to foster a deeper connection with Chinese millennials, an experiential approach is the key. With nearly 80 percent of its users under the age of 35, this was extremely important for Xiaohongshu to keep in mind when creating its offline store.

In addition to the café and ice cream counter, the Xiaohongshu store also has a Lego building area. Following the vintage arcade game fad happening in China right now, the store has claw machines with prizes such as designer lipsticks.

The Xiaohongshu platform centers around a community who love to take photos of their lives and share them online. Because of this, the store aims to be a selfie-lovers paradise, having clearly been designed with social media in mind.

Interestingly, in an interview, Xiaohongshu shared that the staff responsible for designing the store had no previous offline retail experience. Instead, it was their years in online retail – especially in the fashion and beauty industries – that led them to think outside the box when it came to the store’s layout, décor and technological integration.

Xiaohongshu is not exclusively a luxury e-commerce platform and therefore its offline store cannot be completely comparable to that of a luxury brand. However, RED Home offers some key insights into the future of retail in China, showing how offline retail spaces can be designed in order to capture the attention of young Chinese consumers, integrating technology in a way that complements the behaviors of a brand’s target audience.

By Lauren Hallanan

This article was originally published on Jing Daily, a content partner of TheCurrentDaily: The Future of Luxury: First Comes the App, Then Comes the Store