Connect with us

Blogs & Perspectives

The World is Getting Flatter

Forty million new travelers every year will demand local, bespoke goods and services. Are we prepared to deliver?

Published

on

Seemingly happenchance choices can nudge your life in completely new and unexpected directions. I can still remember, vividly, sitting in my London flat with my mates, we were probably watching repeats of Black Adder. Partway through an episode one of my mates says, “Who wants a free trip to New York?” Fast forward 9 months, and I was starting my new life in New York working for Nine West. (Of course, I planned to eat bacon and eggs with beans every morning, washed down with a milky cup of tea and head back to Blighty in about a year.)

Fast forward 17 years later, I have a family in New York, and family in London. A cup of milky tea, pancakes and eggs over easy, the sounds and smells of New York City, while watching a soccer game. These things now feel like my idea of home.

Another fork in my life happened about a decade ago when I joined a design firm in New York and quickly over the ensuing years became something of a department store design expert working on projects spanning four continents.

Which lead me to last month heading to the Global Department Store Summit. I have attended the event many times, and it is one of my favorite events because of the attendees. Ceos of department stores and ceos of global brands gather to talk about trends in the industry, and each year it is in a different location and local experts and cultural ambassadors are drafted to entertain and educate the crowd. This year, the event was held in the picturesque city of Zürich – the financial powerhouse and cultural capital was top-ranked in 2006 by Monocle as the world’s greatest quality of life – nestled at the foot of the Alps on the tip of Lake Zürich.

Each summit has a different theme; this year, it was titled “Delighting Global Travelers at Home & Away.” The summit centered around shifting travel patterns created by varying factors, such as currency devaluation, slowing economies, oil price swings, the U.S. presidential election, Brexit and the Zika virus.

THE WORLD IS GETTING FLATTER

Advertisement

We heard the amazing statistic that there will be an estimated 43 million new travelers every year through 2030 from the United Nations World Tourism Organization. We also heard, “The consumer has perfect information relative to the pricing of goods,” from Steve Sadove, former ceo of Saks Fifth Avenue (New York). He continued, “I guarantee you that with all of this cross-border shopping, if we’re not cognizant of cross-border pricing, we are dead.”

TECHNOLOGY: IN THE SERVICE OF SERVICE

Panelists detailed solutions for capturing highly mobile, channel-hopping consumers in the digital age. “One client needs to be reached out to by the same brand on different devices and with different contents,” said Frédéric de Narp, ceo of Caslano, Swistzerland-based shoemaker Bally. “Anytime, anywhere, any device – and that’s a revolution in the way we think in luxury goods.”

Richard Umbers, ceo of Myer Holdings (Bendigo, Australia), said, “Don’t talk omnichannel, don’t talk physical retail – think about a mashup of physical and digital. It’s called ‘new retail.’ ” He described combining the physical and digital to create new in-store products, such as the Myer Hub, which groups traditional services such as gift registry and personal shopping with new options such as online ordering and click-and-collect. “It’s not technology for its own sake. It’s technology in the service of service, technology to bring customer service to life, technology to reinforce the competitive advantage of what department stores are all about,” he explained.

GLOBAL RETAIL HAS BECOME BORING

“In recent years, the global retail landscape has become boring. There is very little to discover or explore in another country that you’ve not already seen online or in a store near you,” argued Anne Pitcher, managing director of Selfridges (London). “Our point of view is our point of difference,” she said. “This local point of view is particularly significant at the moment. We know that people are beginning to prefer to buy from brands in the country in which they originate. Over 60 percent of global shoppers now prefer to buy British brands in Britain, for example.”

Advertisement

André Maeder, ceo of KaDeWe (Berlin) premium department store group, agreed: “I’m very happy to hear that local is the key, because for us, that’s absolutely the pièce de résistance. We want to be a local store to attract visitors from around the world, absolutely, but we want our stores to be something special for our customers who live in our cities.”

What we’re seeing are the fundamentals of good retailing being twisted and evolved by changing customer patterns and technology facilitation. Local is important to customers. It provides authenticity, a level of trust in the provenance of the product, as well as uniqueness. It also provides a reason to visit or travel to participate in the experience, creating an emotional connection and loyalty that can be almost impossible to replicate.

But “local” no longer only means the product that was manufactured in the region you are physically in, but rather, products that you have encountered and connected with on your journey, be it virtual or real. Local has become layers of authentic experiences and products that are meaningful to you. Technology has removed time, manufacturing and geographic limitations. While curating these authentic local products and experiences, the retailer must also empower the customer to choose when and how to connect with them. Brands must find new ways to enable the customer to create their own personal recipe of goods and services, and empowering them to choose what and when, and reinventing the formats that were developed due to now-obsolete operational requirements. Personalized is now a forward-driven process curated by the customer, and retailers need to build new tools to be able to react quickly and with authenticity.

REFORMAT: LOCATION SHIFTING

Other participants of the conference said retailers need to be open to new destinations and formats. Georges Kern, ceo, IWC Schaffhausen, Switzerland, noted that 65 percent of sales in the luxury industry are non-domestic. “Duty-free travel will be a huge element of growth,” he predicted. “Travel increases, but flows are changing rapidly, so we need also mobile concepts which are following the customers in malls, or in hotels, or in exhibition areas.”

In many ways, the contrast between travel retail/hospitality and the department stores couldn’t greater. One is transient, a fleeting moment on your journey. And in travel, we see rapid development, innovative uses of technology, new ground breaking formats, constant renewal, as well as the melding of service, hospitality and retail. Customer data is actively used to shape and tailor the experience, and even price it. Local product and services must stand alongside international product – one without the other isn’t interesting.

Advertisement

The other hope is to be a destination, a familiar and trusted place, but it could be argued that the department store is a category in perennial decline. When was the last time we really saw format and product innovation? It seems we just don’t connect to brands in same way as the previous generations.

I think, in many ways, travel retail was better prepared for the speed and boundary-less lifestyle of the new connected consumer, but I think department stores have a unique opportunity to curate an authentic experience, but it will take courage to view the format from a new vantage point. For example, why is a department store a box of goods, and why isn’t it, instead, a capsule of curated bespoke services and goods? Or multiple capsules that your customer has shaped. Customers do not want to be told to slow down and dwell, they want to be in control at their own pace and place.

A decade ago, I used to work very hard to feel at home, now I choose which type of home I want to connect with at any given moment, or perhaps both at the same time. Maybe I’ll escape to one of my other memories, or plan to be in my next.

As a new creative director for retail at dash design, Peter Burgoyne has built a reputation for elevating retail design by combining disparate elements into a cohesive, strategic vision. His passion for technology and drive to make the retail experience powerful, memorable and results-driven has allowed him to work with clients such as Saks Fifth Avenue, Tumi, Kenneth Cole, Lord & Taylor, Duane Reade, Printemps, Shinsegae and Holt Renfrew, to name a few. Peter’s background in industrial design also allows him to take a holistic approach to design and view opportunities through “different lenses.” It also keeps him laser-focused in his journey to answer the question: “Is there a better way of doing this?” Burgoyne is a member of VMSD’s Editorial Advisory Board.

This year, Peter will be a presenting speaker at VMSD's International Retail Design Conference (IRDC), Sept. 13-15, in Montreal. Don't miss his session, “Design Diary: Bringing Kenneth Cole's Brand Message to Life,” Tuesday, Sept. 13, at 2:45 p.m, wherein he will share his firm's design process working with the legendary fashion brand to blur the lines between the sales store and the stock room to create a streamlined omnichannel experience. For more information about his session and others, visit irdconline.com.

 

Advertisement

SPONSORED HEADLINE

7 design trends to drive customer behavior in 2024

7 design trends to drive customer behavior in 2024

In-store marketing and design trends to watch in 2024 (+how to execute them!). Learn More.

Promoted Headlines

Most Popular