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Brick is the new black

Feeling the winds of change

With .99 sponsoring Retail NZ’s Top Shop Awards, I was privileged to be part of the judging process and get the opportunity to see what so many retailers were doing to build their businesses. What was particularly interesting from many entrants, large and small, was a genuine focus on changes being engendered as a result of technological developments in society. Basically, the machines are changing how we shop and reshaping consumer expectations of how these brands behave and engage with them. Therefore, retailers are having to react to that to maximise their opportunities.

We’ve identified three key trends that we believe will make a difference to how retailers in New Zealand compete in this environment.

Mobile

Mobile is where a lot of people’s shopping journeys are now starting. Whether they’re researching, browsing, selecting or indeed buying, smartphones are making it a lot easier – 60 percent of Amazon’s sales at Christmas in the US were made via smartphone, and Argos in the UK just reported that 38 percent of their sales involve a mobile in the process.

This means that having mobile-optimised websites, communicating well via mobile through things like personalised loyalty programmes and taking into account the upcoming impact of mobile payments are just some of the opportunities for retailers.

Internationalisation

We’re seeing an influx of international retailers come into New Zealand, some of whom may be starting small but will likely grow. Topshop has made a big impact on Queen St. In fact, it’s helping rebuild it as a destination and repositioning other retailers in the vicinity. Arguably, Queen St is becoming cool again and if your audience is a good fit, it’s a great place to open a store.

David Jones is about to land in Wellington to take over and invest in Kirkcaldie & Stains, and presumably they have growth plans beyond Wellington.  An outlet selling Zara opened on the North Shore, Victoria’s Secret is coming to the airport, and at some stage maybe Ikea will finally make it over the ditch. And that’s just some of the headlines.

This means that local brands need to be investing in their own strong, distinctive identities. They can do this by developing a compelling customer value proposition, building a sustainable competitive advantage over competitors who benefit from international scale, brands, ranging and visual merchandising that has a clear sense of the company’s own value and design integrity, and ready to compete not just promotionally, but on product, price and place.

Which leads me to the third trend…

Brick is the new black

Yes, the physical store is back. Retailers here and abroad are investing in making shopping experiences wonderful, stores beautiful and the process simple. I’ve had the good fortune to be in the USA twice in the last few months and I’ve seen how many retailers are investing in sensational customer service, whether it’s greeting, assisting, fitting, or simply selling at a professional level. Many are successfully getting the fine line between attentiveness and intrusion right. Apple is the most obvious example of an amazing instore experience and a lot of their learnings are being translated into a wide range of store environments. Notably, apparel seems to be raising its game.

The investment being made by The Warehouse Group, Retail NZ and others in supporting the growth of retail as a profession can only support the ongoing improvement of these skills in New Zealand alongside retailers’ own investment.

What else did we see as Top Shop judges? Well, a lot of the best entrants are focused on omnichannel (i.e. online and offline) and making that effective, as well as using channels like social media and email really effectively. And perhaps most surprising was the amount of retailers saying they were looking at loyalty ideas. It wasn’t that long ago that the role of loyalty programmes was being seriously questioned in New Zealand, but clearly the market has spoken and the New Zealand shopper really responds to the right balance where loyalty is a component of a wider shopping experience.

So, with the winds of change blowing through retail, there is lots of potential and opportunity out there and it’s great to see so much is being done.

This copy originally appeared in NZ Retail magazine issue 740 October / November 2015.

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