Luxury brands have long fostered close ties with the art world, but now mass-market brands are also seeking the cool points generated by aligning with cutting-edge creatives. Gap teamed with Frieze in London and New York to create concept stores with themed products, and H&M collaborated with Jeff Koons in 2014.
Fast-fashion brands can no longer rely on simply being stylish and cheap; they now have to be smart too, reflecting a general rise in consumer sophistication and expectations from brands.
Amazon has signed the lease on its first physical store in New York City, a 470,000-square-foot space near Herald Square—are we ready for the Amazon mega-store to be imagined as a physical space?
A slew of online retailers have opened physical spaces, so Amazon is late to the game in launching a brick-and-mortar presence. Its move is telling, though: While consumers increasingly shop online and via mobile, they also seek compelling in-store experiences.
Mass-market global brands are creating hip boutique sub-brands to appeal to discerning Millennials. PepsiCo has launched “craft soda” Caleb’s Kola, made with cane sugar and kola nuts. Lidl, after a marketing stunt in which it presented its food at a gourmet farmers market, launched a pop-up restaurant, Deluxe, in the groovy east London neighborhood Shoreditch. Fruit of the Loom, the T-shirt brand that was a huge seller in the 1980s, recently created the separately branded premium line Seek No Further. Starbucks is introducing a higher-end chain, Starbucks Reserve Roastery and Tasting Room. And Cinnabon’s Bon Bake Shop, a new concept in Houston, sells smaller rolls with more flavor twists.
Consumers are increasingly seeking niche, independent brands with artisan credentials and slick branding.
The new iteration of bespoke in retail experiences occupies BuzzFeed survey territory (“What NYC neighborhood should I actually live in?”). Using a seemingly abstract series of questions, retailers are selecting the perfect product for consumers, who engage in an immersive journey as they progress from abstract questionnaire to object selection.
Selfridges, Campaign Design and The Future Laboratory collaborated on Fragrance Lab, an in-store project that took customers through a series of stages—selecting objects, answering personality questions and visiting several sensory rooms—before their ideal fragrance was presented to them. Interestingly, customers paid a ticket price for the experience and the scent was included, rather than the price being attached to the scent. (Participants were presented with their prescribed scent at the end and could opt in or out as they wished.)
NYCxDesign collaborated with Bentley in a similar New York pop-up project that was designed to make the personalization of Bentley cars more accessible and experiential. Customers were invited to engage in an interactive process, selecting the colors and finishes ideal for them. The process included a “mood station” where people were asked to gauge their response to a series of images; this was then interpreted for paint-color preferences and presented back to participants in a visual display.
Perhaps this trend says something about customization. Customers have been given access to millions of options and color combinations, but while they may not know what to choose or may not even like what they’re creating, they still want the personalization option. The techniques detailed above are a fresh way to reinstate brand authority while making the consumer the center of the show. They’re also a great engagement platform.
Internet-enabled televisions, Internet-first networks like Netflix and Amazon, and the migration of both commerce and content to mobile platforms will help drive a merger of shopping and entertainment. Shoppable videos are the first wave and getting more sophisticated—for instance, Mr Porter’s suave “The Gentleman’s Wager,” produced with Johnnie Walker Blue Label, which stars Jude Law and Giancarlo Giannini. Online retailer Ssense features music videos on its site, with links below to shop the menswear and/or womenswear featured.
Entertainment, retail, gaming, content and advertising are continuing to converge as entertainment becomes internet-first (and therefore more easily connected to commerce.) With Amazon producing original entertainment series, will shopping its shows be the next addition?
To improve security, businesses are starting to adopt systems that identify and authenticate people from physical or behavioral characteristics: iris scans, digital fingerprints, voice prints, vein or facial maps, and so on. The method is also more convenient for users than typing passwords, although privacy will be a concern for some.
Fingerprint recognition, the most widely used biometric system thus far, will become increasingly common now that it’s baked in to Apple’s Pay system. The Samsung Galaxy S5 enables fingerprint payment via PayPal’s app; PayPal has started experimenting with facial recognition; and Biyo, a new payment technology, reads the vein pattern in your palm. It is expected that there will be 471 million global biometric smartphone users by 2017, up from 43 million in 2013.
Technology is evolving, making traditional forms of payment obsolete. Soon, our physical selves will be all we need to complete transactions.
Zappos and OrderWithMe set up a 24/7 pop-up this holiday season in a 20,000-square-foot retail space in Las Vegas. OrderWithMe CEO Jonathan Jenkins explained the long hours by noting, “You don’t go to Zappos.com at 3 a.m. and they say, ‘We’re closed.’” As the world becomes more global, more businesses become global operations and Internet connectivity proliferates, we’re waving goodbye to working-hours conventions, expecting to shop 24/7—but also being expected to work 24/7.
Bloomberg Businessweek journalist Brad Stone highlighted the impact of 24/7 global companies on work in the article “Work-Life Balance and the New Night Shift,” citing late-night working hours as a direct result of communicating with multiple businesses in multiple time zones.
Globalization and the Internet are collapsing the traditional boundaries that once kept retail and working hours in check.
A combination of climate change, social media, gender equality, brand fatigue and global travel are starting to erode longstanding boundaries and constructs in fashion. Brands are rethinking the traditional seasonal drops of winter and summer fashion. Sneakerboy, a sneaker store in Melbourne, is seasonless, reasoning that tourists from any number of markets and climates come to the store regardless of Australian seasons. Tamara Mellon, Stefano Pilati (for Agnona) and Donna Karan have launched seasonless concepts recently, and affordable, seasonless luxury basics are appearing from Tomas Maier, the new Kit and Ace and Everlane, among others.
Meanwhile, Acne founder Jonny Johansson has spoken of increasing gender blur, or neutrality, in contemporary fashion. Hip streetwear brand Hood By Air is gender neutral. Miuccia Prada has also talked about the rise of genderless fashion: “More and more, it feels instinctively right to translate the same idea for both genders.”
Globalization is blurring weather-related seasons, and there’s a sense of confident hyper-individualism among consumers, who are increasingly reluctant to follow either trends or seasons—they want to dress for themselves and expect brands to work outward from this.
Two Internet giants are rapidly expanding into each other’s home turfs. Chinese e-commerce company Alibaba is staking its claim in the U.S., staging an IPO in September (the biggest in Wall Street history at $21.8 billion) and has started selling to Americans through mobile boutique app 11 Main. Meanwhile, a group of U.S. retailers including Saks Fifth Avenue, Macy’s and Neiman Marcus has started using Alipay, Alibaba’s payment service. Amazon is expanding in China, where Amazon China enables consumers to buy American goods, and staged a two-day campaign to introduce the Black Friday sales frenzy to China.
Two juggernauts, each with deep take-up in their own territory, are moving into the other’s grounds. The issue, of course, will be whether Alibaba can win American trust and whether the Chinese will migrate to Amazon’s offer. Will they also need to differentiate their offers?
Singles’ Day is shaping up as a global shopping phenomenon. It began as a novelty in China to mark the supposed loneliest day of the year (Nov. 11, as 11/11 stacks up to a pile of ones) and has become the largest online shopping day in the world after being appropriated by Alibaba, the largest e-retailer in China—even trumping Black Friday. In 2014 Alibaba made $1 billion in the first 17 minutes of Singles’ Day.
Now the concept is expanding globally. Alibaba’s CEO believes Singles’ Day deals will reach consumers in 220 countries in the next year, and if global shifts are anything to go by, he’s probably right. Single living is certainly a global trend. According to the U.S. Census Bureau, the proportion of single-person households in the U.S. alone increased from 17% to 27.5% between 1970 and 2012.
Globalization means that from Black Friday to Singles’ Day, “shopping holidays” are quickly being introduced to new markets. Although the U.K. doesn’t celebrate Thanksgiving, shoppers there embraced Black Friday with enthusiasm in 2014.
Established retailers and brands are tapping the glamour of the concept store format to impress savvy, global-shopping Millennials with local, artisanal, curated and niche products. Pop-In @ Nordstrom is a series of themed pop-ups curated by Olivia Kim, director of creative projects and former vice president of creative at Opening Ceremony. Lord & Taylor’s Birdcage, in its New York store, is a concept shop-in-shop selling carefully curated pieces from New York-based creatives. Diesel’s 101, a pop-up boutique in Brooklyn, sells carefully curated goods including pieces from Brooklyn Candle Studio, T-shirts by photographers Inez van Lamsweerde and Vinoodh Matadin, and nail polish by Deborah Lippmann.
Concept store formats cater to the consumer desire for curation, as well as the sense of “magazine format” in retail, where formats are regularly switched, updated and refreshed.
Luxury brands are enhancing their entry-point categories; Burberry, Dior and Chanel all recently launched beauty and fragrance “temples” that emphasize their product offer, and incorporate luxurious interiors and digital technology. The next phase? Eyewear. In a telling move, luxury group Kering has bought back its eyewear licences. Next stop, perhaps, luxury eyewear flagships akin to those of Warby Parker.
Having focused on hard luxury, many luxury brands are zeroing in on their aspirational entry-point categories, celebrating them in theatrical flagships.
A new wave of app platforms offers streamlined, consolidated ways to store bank cards and shop efficiently. Lyst’s universal shopping cart allows consumers to shop from multiple online retailers and pay in a single transaction. Apple Pay and Coin let customers digitally store their cards, loyalty points and coupons in one place.
More retailers and brands are embracing e- and m-commerce, but this means the number of apps in consumers’ lives has exploded. In the future, consumers will look for one-stop shops.