The reinvention of retailAs shopping evolves, forward-thinking retailers are making the most of new trends and technology to give customers the rich, personalised experiences they crave.

PA G E 1

What comes to mind most when you think of retail? Buying something from a brick-and-mortar store, or ordering products online? Until recently, retail was synonymous with physical places – high-street stores or shopping malls – but the rapid rise of ecommerce, new technology and changing consumer habits have reinvented the way we buy. Now you can shop in physical stores, online, via chatbot or through a combination of them all. Let’s take a quick look at where retail has been so that we can prepare for where it’s going in the future.

A brief history of buying and sellingRetail has been around almost as long as people have. In earlier times, it was the barter system, where we traded goods and services for other goods and services. When currency later emerged, people began purchasing items from local merchants. From here bigger shops were born: London’s famous Fortnum & Mason opened its doors in 17071; across the Atlantic the first U.S. clothing retailer, Brooks Brothers, began trading in 18182, and Paris gave us what’s widely regarded as the first ever department store, Le Bon Marché in 18523. Mall culture emerged in the 1950s4, and then the birth of the internet and online shopping in the 1990s turned everything on its head again.

And, of course, this reinvention doesn’t stop there. Here we take a look at some of the trends currently playing a starring role in the ever-changing retail landscape.

Today’s biggest retail trendsOmnichannel is a sales and marketing model that provides the customer with an integrated shopping experience. With omnichannel, customers can shop seamlessly from a variety of channels, including social media, websites, stores, and messaging apps. And fast, frictionless, cross-channel shopping is exactly what today’s buyers are looking for.

Recent research indicates that businesses using three or more channels in marketing campaigns enjoy a 250% higher purchase and engagement rate than those using single channel campaigns.5 And 84% of consumers believe retailers should be doing more to integrate their online and offline channels.5

The reinvention of retail

of consumers say retailers should do more to integrate online and offline channels5

84%

PA G E 2

The power of personalisation:

A closer look at retail’s biggest trendOf all the trends at the moment, personalisation is taking centre stage. From drinks labels bearing the tartans of Scottish clans to magazine covers adorned with individual messages for its top subscribers, personalised and customised products are highly prized by today’s consumers — and they’re willing to pay a premium for them. Putting it simply, the era of “one size fits all” products is over.

According to the Deloitte Consumer Review, 36% of consumers want personalised products and 22% are willing to share some personal data to get it. For millennials and Gen Z, those numbers are even higher8.

A study by sparks & honey broke down the desire for personalisation by generation, revealing that 45% of

millennials want customised products. That number is expected to climb to 53% for Gen Z., but it’s not just the newest generation of consumers expecting customised products. Some 27% of baby boomers and 32% of Gen Xers also want products that speak directly to them. And

consumers are willing to splash out to get them. In some sectors, such as fashion and home goods, more than 3 out of 4 would pay at least 10% above list price for personalised products.9

The reinvention of retail

“ Personalised products are highly prized by today’s consumers. The era of ‘one size fits all’ products is over.”

In-store experiences are brick-and-mortar stores’ secret weapon. Because physical interactions still matter. Customers still want to be able to touch things or try them on, to get a feel for the physical product before they make a purchase.

So while it’s true that in the UK alone retailers closed 2,700 stores in the first half of 20186, the stores that thrive have switched from a transactional ethos to an experiential one. They have innovated to provide their customers with one-of-a-kind experiences that they can only get in person. A recent survey found 80% of customers believe that the experience a store offers is as important as its products and services7.

Companies have also been transforming their retail spaces into meeting places with internal cafes and restaurants, but this is now evolving into stores becoming mini destinations. For example, the Reebok store in Paris has dedicated most of its store surface to allowing customers to play sports. DJs, gaming corners, hairdressers, mobile chefs, coffee

“ Businesses using three or more channels in campaigns enjoy a 250% higher purchase and engagement rate than those using single-channel campaigns.”5

PA G E 3

The reinvention of retail

80%of customers believe the experience a store offers is as important as its products and servicesSource: Salesforce, State of the Connected Customer (Second Edition) report, 2018

tastings… all sorts of extras are appearing in forward-thinking stores looking to enrich their customer experience.

VR and robots are also staking their claims to positions in the retail sector. Much has been made about robots taking over simpler jobs such as product delivery or warehouse operations, but that may not be a bad thing if it frees up humans for other more meaningful projects.

And VR is breaking away from gaming to find its retail sweet spot. Walmart announced in September its plan for employee training to incorporate virtual reality. According to a Bloomberg report, Walmart’s vision for VR goes beyond employee training: the retailer applied for patents for technologies supporting a virtual showroom where shoppers could grab items off the virtual shelves that would then be sent to their real homes.

Nordstrom has also been trialling an innovative blend of the digital and physical to enhance shopping experiences. Customers can use an app to find products they like on the internet and send them to personal stylists, who will then create customised digital style boards for them. Customers can mark any items they like and then go to the nearest store, where they will already be laid out for them in a dressing room and a tablet will be available so they can purchase via mobile pay.

Retailers are responding to changing needs

From practical to experiential, retailers are seeing these trends and responding. Starbucks’ Mobile Order & Pay app is an example of off- and online retail integration. Using the app, customers can order their drinks, tip the barista and skip the line.

Amazon’s Just Walk Out technology detects when consumers enter the store with the Amazon Go app and place items in a virtual cart. When consumers complete their shopping, they simply walk out of the store with the purchases charged on their Amazon account, avoiding checkout lines altogether.

“ Much has been made about robots taking over simpler jobs... but that may not be a bad thing if it frees up humans for other more meaningful projects.”

PA G E 4

97%of businesses plan to increase, or maintain, their personalisation budgets this yearSource: Everage, 2018 trends in personalization

98%of marketers think that personalisation helps advance customer relationshipsSource: Everage, 2018 trends in personalization

The evolution of retail In these changing times, new retail point-of-sale technology is playing a huge role in helping retailers to enhance the present and prepare for the future. Mobile POS solutions, for example, allow sales associates to scan barcodes and undertake credit card transactions. The result is a fast and frictionless buying experience, with employees empowered to check inventory and complete transactions from the sales floor.

“ New point-of-sale technology is helping retailers to enhance the present and prepare for the future.”

Mobile technology—in the form of both self-service mobile tools and mobile tools used by sales associates—helps provide a faster shopping experience.

The reinvention of retail

Personalisation has also been a hot topic in recent digital design meet-ups and trade shows. HP brand owner for digital print in EMEA, Jose Gorbea, unveiled a new “personalization framework” for brands at this year’s Digital Design Days. Backed by the new research from sparks & honey, it included a host of proof points to show how brands could grow through personalised digital print.

According to Gorbea, brands can grow sales and loyalty by targeting their customers in a meaningful, personalised approach using the latest print technology. “Humanising technology is the thing that really helps your business grow,” Gorbea says. “It’s all about inspiring thoughtful consumption… If I’m going to spend extra money or buy more bottles of a product, what is that brand doing for the planet?”

As an example, the South African cream liqueur brand, Amarula, printed 400,000 labels picturing an elephant logo with a

unique graphic design and an elephant’s name. This created a connection between the consumer and the estimated 400,000 African elephants, all of which are under threat from poaching and habitat loss. In an earlier phase of its “Name them, save them” campaign, for every bottle sold, $1 was donated to the Kenyan-based conservation group WildlifeDirect.

Personalisation in practice

“ Humanising technology is the thing that helps your business grow.”J O S E G O R B E AHP brand owner for digital print

PA G E 5

Customisation also goes beyond packaging and the shopping experience to the products themselves. For example, Olay Skin Advisor from Olay, a skincare brand of Procter & Gamble, can analyse a shopper’s selfie and make a personalised recommendation for products, says Gemma Andreu, Communications Director at Procter & Gamble’s hair care division. Because consumers see themselves as individuals, brands have to be as targeted as possible. “What used to be a delight is now an expectation,” she says.

In the past when products were mass-produced, customers could find some customisation through specialised stores or through engraving and monogramming, explains retail analyst Nicole Leinbach Reyhle. Now, in our digital world, where consumers want exciting products that are fun and accessible, brands and retailers have new opportunities to connect with shoppers. “Customers don’t need to go to one store to make something personalised, their favourite brand can deliver on that now,” she says.

For Gorbea, technology is helping bridge the gap between product and people. “It’s not about what the technology can do,” he says, “it’s what the benefit is for the human being interacting with what you print.”

Consumer choices, personal needs

The reinvention of retail

Retail point-of-sale systems also enable retailers to integrate in-store and online channels by tracking and maintaining inventory simultaneously.

New business models are emerging as the accelerated digitisation of processes combines with megatrends such as rapid urbanisation. More space and resource constrained cities are creating opportunities to shift from business models built on delivering physical products to service and experience-driven value propositions. A good illustration of these propositions is the notion of the ‘sharing economy’, where instead of purchasing and owning it’s more efficient for people to experience the benefits of something delivered ‘as-a-service’.

A great example in the retail industry is the advent of clothing rentals or try-before-you-buy services. Rent the Runway offers one such service. Having been started to fill a need for women who wanted a formal outfit for a special event, Rent the Runway now offers a variety of women’s fashions, with a wardrobe refresh available monthly with a subscription fee. With the sharing economy continuing to grow at a significant rate, it’s expected that business models that we haven’t yet imagined will disrupt the way we shop in the future.

One step ahead Fitstation powered by HP, delivers custom-fitted and individualised footwear through 3D scanning, dynamic gait analysis and additive manufacturing technologies. Users can have their feet 3D scanned and their gait analysed to determine the most ideal fit. Personalised shoe recommendations and custom 3D printed insoles ensure users have the perfect shoe every time.

PA G E 6

The reinvention of retail

In conclusion, we may not know where retail will end up, but we can be prepared for the transformation. Businesses with bricks-and-mortar stores have the opportunity to disrupt their industry, and change the way we all think about shopping. And companies that invest in technology and innovation will be leading the way.

PA G E 7

The reinvention of retail

Sources:

1 Fortnum & Mason, Fortnum’s History, 2019: https://www.fortnumandmason.com/information/our-history

2 magazine.brooksbrothers.com, Brooks Brothers History, 2016: https://magazine.brooksbrothers.com/tag/brooks-brothers-history/

3 Global Blue, The oldest stores in Paris , 2017: https://www.globalblue.com/destinations/france/paris/oldest-stores-in-paris

4 WSJ, A Brief History of Retail, 2017: https://www.wsj.com/video/series/a-brief-history-of/a-brief-history-of-retail/F1AE7DC6-BB25-499C-9A2A-D120C18C3798

5 CMO, Omnichannel Is The Only Channel, 2018: https://www.cmo.com/interviews/articles/2018/1/26/hp-alex-craddock-interview-.html

6 BBC, Retailers shut 2,700 shops in first half of the year, 2018: https://www.bbc.co.uk/news/business-46142025

7 Salesforce.com blog, New Research Uncovers Big Shifts in Customer Expectations and Trust, 2018: https://www.salesforce.com/blog/2018/06/digital-customers-research.html

8 Deloitte, Made to order: The rise of mass personalisation, 2019: https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/consumer-business/ch-en-consumer-business-made-to-order-consumer-review.pdf

9 The Garage, The power of personalization: When a product on the shelf calls your name, 2019: https://garage.ext.hp.com/us/en/business/HP-personalization-pinwheel-digital-design.html

© Copyright 2019 HP Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

c06352199, June 2019