“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” – Steve Jobs “These businesses are wholly aware that Amazon is eyeing what’s theirs and that what worked yesterday probably won’t work tomorrow. They are motivated to embrace change and their customers
omers are certainly changing.”
– Beck
Besecker, Forbes
As Besecker goes on to say, consumers today have constant access to entertainment and communication through smartphones and the internet, while real estate development trends are leaning away from bedroom communities and towards new urbanism and gentrification.
And so
adaptation remains far more relevant than innovation. To adapt we must have:
visionbravery skill risk appetite insights and an insatiable ability to question the why.
Businesses
that meet this criteria will be hugely successful in this retail landscape both
now and into the future because they will be best placed to meet three
inescapable trends emerging quickly:
In-store retail is naturally becoming less about inventory and more about providing intermediary and indispensable, location-based services that result in sales, craft relationships with customers and capture new data. Advances in fulfilment and same-day delivery services will dictate largely the role of retail shops as points of sheer fulfilment As this blends into the landscape, physical space in shops will start to decrease, and digitally integrated experiences will become more common, and sales will occur in different ways.
Bricks-and-mortar
retail has always been about the fantasy of what is possible, and that
inspirational experience remains at the heart of retail.
Emerging
retail formats will further blur the line between shopping and entertainment –
so much so that the customer may lose sight of the fact that they are in a
store.
Take the
Ikea shopping experience, which is designed to help people imagine Ikea
products as part of their day-to-day lives. Ikea doesn’t just sell furniture,
it sells a lifestyle, and its stores are set up to entice customers to adopt
the Ikea way of thinking.
But while
the global retailer traditionally has built huge lifestyle outlets, now the
brand is adapting its store format to global consumer trends around
urbanisation.
Last
year, the Swedish furniture brand announced it would open 30 new store concepts
in urban centres, from stores of the future, to sub-100sqm shops, to pop-ups,
to standalone cafes and singular category shops.
Ikea Australia country manager, Jan Gardberg, in the retailer’s small-format store in Sydney.
The
stores are backed up by the most advanced technology, providing everything Ikea
has to offer, but in a virtual environment. The goal is to make every
interaction between the customer and the brand more seamless, allowing
consumers to have fun while shopping and learning about the brand along the
way.
Looking
at Ikea’s urban store in Madrid, there are three very important reasons for the
success of this concept:
servicesproximityentertainment.
The new
store offers much more than a standard Ikea store. There is a high level of
entertainment available, with the main goal being to engage customers. And
since the store is located in the city centre, customers can easily shop on
their way to work, or while they spend their time in the city.
Customer
can learn how to customise their products, try different furniture concepts and
styles, receive expert decoration and design advice, enjoy various projections
and visual merchandising of products, and so much more.
Other
retailers can learn from Ikea’s example. Aside from delivering the highest
level of brand engagement, inspiration, and entertainment, it also uses digital
to make its services and products fully customer-centric.
Ikea is
also continuing to explore new store methods and formats that will allow it to
get even closer to its customers and deliver world’s best omnichannel offer,
while remaining a leading brand in furniture retail, and potentially
revolutionising the way people buy products.
Brian Walker is founder and CEO of Retail Doctor Group, a retail advisory and consultancy group and the Australian elected partner member of the global retail expert’s alliance Ebeltoft Group.