Insights from Shoptalk Europe
During his keynote, Westfield CEO Steve Lowy discussed the new open-air, design-led Westfield Century City in Los Angeles, which he described as a “wonderful shopping experience”.
“[Retail] has to have a physical platform that wows the consumer and evokes their senses in a way that online can’t do. There are 50 new retailers, there’s a heavy focus on food, tech, automotive and leisure. People are spending their dollars in different ways than before, so you need to provide services, health and fitness in a beautiful environment,” he said.
“On top of that, you need to provide people with the ability to shop when and how they want to shop with who they want to shop and create an opportunity to have a digital platform that excites them.”
Lowy championed the need for retailers to offer both great physical and digital experiences for their customers.
“You must have a digital approach today and use the most modern technology to do that. If you’re thinking about AR using proximity natural language processing, VR, those are the technologies consumers are expecting today that will create a beautiful experience for them. People are humans, they like to interact, eat, socialise in beautiful environments so it’s incumbent on us to focus on a dual strategy.”
It’s not all about digital
Hudson Bay Company CEO Gerald Storch also emphasised the importance of physical stores, despite their over saturation in the US.
“Stores have to be better, it has to be like going to the Great Exhibition in the 19th century for people to see the latest and greatest,” he said, adding that rather than pulling back on their physical presence, the department store is investing in building more around the world.
In the last year, Hudson Bay Company has modernised 20 additional Galeria Kaufhof stores in Germany, opened 10 Hudson Bay stores in the Netherlands all built from scratch and introduced Saks Off 5th to Europe.
Savannah Sachs, UK managing director from Birchbox outlined the process that the subscription beauty online retailer undertook when it decided to launch a physical store.
According to Sachs, bricks-and-mortar was not part of the plan when Birchbox was first launched, but 90 per cent of beauty is still sold offline, so the brand launched roadshows and pop-up stores to test the market.
Most beauty stores are aimed at ‘beauty junkies’ – customers who are more than willing to try out new products, follow beauty influencers and are already aware of the hottest brands.
However, Birchbox is aimed at what Savannah described as ‘the beauty majority’: “She’s not an expert, she doesn’t know a lot but is willing to learn and has been under served by the industry.”
So when it came to opening a bricks-and-mortar store, rather than creating a space divided up by different brands, Birchbox pushed the boundaries by creating a store categorised by product type, based on their target customer’s shopping behaviour.
“We have a small curated assortment and it’s all merchandised by category and product type. Instead of shopping for Bobbi Brown products, the beauty majority walks into a store and thinks, ‘I need a new mascara’ or ‘I’d like to try a highlighter’ and she can go to the section with all the mascaras and try them all side by side. It’s simple but something not a lot of people are doing,” Sachs explained.
The Birchbox stores also offer customers services such as educational classes and ‘build your own birchbox’, a personalised ‘pick and mix’ beauty box that customers can create.
Being a pureplay retailer to start, Sachs admitted that there were some difficulties at first when the brand ventured into offline territory.
“We’re e-commerce and digital experts, but because we were so naive, it enabled us to be more disruptive. Less experience has been an asset, but we had some funny bumps along the road. Our biggest challenge was finding the right talent – we went through [a few] store managers, we were looking for someone with retail expertise but acts as a general manager for the store, too It’s been challenging to find.”
Keep an eye out for Inside Retail’s coverage of Shoptalk Europe, which brings together over 2,000 individuals, including 225+ speakers, from across Europe and the world.