From Nordstrom and Rent the Runway, to The Iconic and General Pants, retailers all over the world are starting to collaborate with other businesses and forming mutually beneficial relationships with one another.
According to US Shop Association executive director Todd Dittman, these strategic alliances are the future of modern retail, and, at Euroshop this week, he shared the insights he gathered during a recent hackathon between supplier members and US brands such as Coca-Cola, Home Depot, Marriott, Carnival Cruise lines and Chick-Fil-A.
During the event, which ran over the course of eight hours, participants were split into 10 different teams, comprising one or two retailers and several suppliers. The groups were each given a challenge to create a hypothetical physical retail experience, utilising their various cross-disciplinary expertise. At the end of the day, the teams also created three-minute videos which were judged by a panel of Shop members, based on the creativity of their ideas and whether they were able to stick to budget.
“A lot of the time, a retailer deals with one or two people and they get locked into a narrow supply chain,” Dittmann told Inside Retail.
“[The hackathon] really opened retailers up to things like using visual merchandising in a way they hadn’t thought of, or using point-of-purchase stands or temporary store fixtures. It broadened their way of thinking…there are a lot of different ways to address the customer experience in-store.”
The Marriott team won the challenge for their fictional health and wellness hub in Times Square targeting gen Z customers. The luxury space began at customised juicery, where guests could create bespoke beverages by selecting supplements from a hydroponic wall. Guests could also take part in a hypothetical immersive fitness experience, featuring LED carpets and display systems to create real-life 360 degree landscapes, such as mountain biking trails and the shores of Oahu in Hawaii.
Several participants also got business out of the exercise, after gaining a better understanding of each other’s expertise, Dittman said.
“Abraham Lincoln said the best way to predict the future is to create it, so my feeling is the best way to predict the future is to co-create it – to get the suppliers and retailers to come up with the answers together,” he said.
Here are other examples of the hypothetical in-store experiences that brands created during the hackathon.
Retail trends in 2020
During his presentation, Dittman also shared some of the main trends that came out of a recent survey of 200 Shop members:
1. Continuous adaptation: “It’s important for retailers to continuously test new products, concepts, inventories and methods and communications while not interrupting their everyday business,” said Dittman.
2. Purpose:Modern retail is now an intersection between a brand’s purpose and customers’ own personal values and beliefs.
3. AI and big data:“Retailers are using AI to define retail store assortments and inventories. We’re seeing two phases of technology,” Dittman said. “The first is how to be more efficient with operations and inventory control. The second phase is more about robotics and the manless checkouts and voice activations. Right now, we’re mainly in the middle of the first phase.”
4. The wow in-store factor:When people can easily shop online, you need to give them a great experience to leave home and come into your store.
Outdoor brand Yeti has recently started opening physical stores, which feature a stage for live concerts during open hours as well as a bar offering customers food and drink, Dittman described.
He also used Disney as another excellent retail experience. “If you’ve ever been to a Disney theme park, you know it’s a lot of money, heat and waiting in lines – people don’t pay to do all that,” he said. “What they pay for is to see the look on their five-year-old daughter’s face when she gets a photo with a princess. It’s all about the experience and it’s what keeps them coming back.”
5. Co-creation and personalisation: Consumers are now taking an active part in creating their own products or in-store experience – it’s almost like a partnership between themselves and the retailer.
At Neiman Marcus in New York City, customers can book in one-on-one style consultations and use digitally-enabled fitting rooms, which allow them to view themselves under five different sets of lighting as well as customise their own playlists during the whole experience, Dittman said.
Jo-Anne Hui-Miller is visiting Euroshop as a guest of Messe Reps.