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RETAIL TRENDS / 2010/11
SPECIAL REPORTS
In partnership with
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retail trends / 02/03
01 / pages 04 - 06INTRODUCTION / THE CHANGINGLANDSCAPE OF RETAIL
02 /pages 08 - 13
CURATED CONSUMERISM /INTEGRATING ONLINE AND IN-STORE /
03 / pages 14 - 19
IN-STORE TECH / CAPITALISING ON
CONVERGENT LIFESTYLES /
04 / pages 20 - 25
DEMOCRATIC CONSUMERISM /RE-THINKING THE SUPPLY CHAIN /
05 / pages 26 - 32
SALON RETAIL / SPACES FORCOMMUNITY AND PERSONALDEVELOPMENT /
06 / pages 33 - 40
RETAIL WITH A CAUSE /THE NEW SOCIAL CONSCIOUSNESS /
07 / pages 41 - 42SERVICE-CENTRED TECH / PEOPLEDRIVE TECHNOLOGY IN-STORE /By John Jones, R/GA Retail /
08 / pages 43 - 47
S-COMMERCE / WHERE SOCIAL MEDIAMEETS ONLINE RETAIL
09 / pages 48 - 50
M-COMMERCE / THE BRIDGE BETWEENAT-HOME AND IN-STORE
10 / page 51
V-COMMERCE / USING VIDEO CONTENT TODRIVE SALES / Q&A with Nick Timon, Adjust Your Set /
11 / pages 52 - 53
FUTURE VIEW / By Nick Parish, Contagious /
12 / page 55CREDITS /
INDEX /
RETAIL TRENDS / 2010/11
CHAPTERS /
01 /
INTRO
02 /
CURATED
03 /
TECH
04 /
DEMOCRATIC
05 /SALON
06 /
CAUSE
07 /
SERVICE
08 /
S-COMMERCE
09 /
M-COMMERCE
10 /
V-COMMERCE
11 /
FUTURE VIEW
12 /
CREDITS
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retail trends / introduction /
The global retail scene has been fraught with tales of shop closures,vacant malls, skittish consumers and an overall sense of economicdoom and gloom. Many retailers have been forced to cease oper-ations or downscale. However, others have weathered the stormand even seen growth in revenues and store numbers. Survivalhas centred on speedy adaptation to changing and unforeseencircumstances, investment in customer service delivery across alltouchpoints, experimentation with different store formats and a focuson enhancing the shopping experience, both in-store and online.
Growth & expansion /
US consumer electronics chain Best Buy, for example, sawrevenues grow last year from $45bn to $49.7bn despite overall
declines in the sector. As well as new large-format stores, thecompany opened a number of smaller mobile stores and expandedinto the UK in partnership with Carphone Warehouse. Thecompany has been lauded for its Twitter-based customer serviceteam, Twelpforce, and has introduced other customer incentivessuch as free nancing for full shopping carts, as opposed to oneitem at a time, and a recycling initiative for old electronic goods.
Meanwhile, UK fashion chain Topshop, known for its affordablebut stylish clothing and high prole celebrity partnerships mostrecently with model Kate Moss continues to create compellingand buzzworthy brand developments and expand its enthusiastic
fan base. The retailer successfully launched its rst US conceptstore in SoHo, New York, during the worst of the US economiccrisis. The store, which mirrors the London agship and makesa feature of its British design heritage, spans four oors andincludes a Style Studio, a Shoe Lounge and even a DJ boothto add to the entertainment experience. It has done so well (withsales reputed to be running at 30-40% ahead of expectation) thatowner Philip Green has recently announced plans for a secondstore on Chicagos Michigan Avenue.
Apple, of course, continues to underpin its product successwith shiny new often award-winning stores that offer a wealthof in-store experience from workshops to creative talks and youth
programmes to now even business briengs. The highest proleopening this year was in Londons Covent Garden Apples300th and largest store to date and it opened seven stores inone weekend this September, bringing the tally of new openingsin 2010 to 43. Apple stores around the world have been host
01 / pages 04 - 06
INTRODUCTION / THE CHANGINGLANDSCAPE OF RETAIL
CHAPTERS /
01 /
INTRO
02 /
CURATED
03 /
TECH
04 /
DEMOCRATIC
05 /SALON
06 /
CAUSE
07 /
SERVICE
08 /
S-COMMERCE
09 /
M-COMMERCE
10 /
V-COMMERCE
11 /
FUTURE VIEW
12 /
CREDITS
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retail trends / in-store tech /
Orange Multimedia Centre /
Keds+Whitney@Bloomingdales /
03 /pages 14 - 19
IN-STORE TECH / CAPITALISINGON CONVERGENT LIFESTYLES /
There has never been a better time for retailers to get tech-savvy. Smartphone penetration continues to grow exponentially:
McKinsey estimates that out of the worlds four billion mobile
phone-owners, 450 million are connected to the mobile web.
Added to which, ever-more sophisticated devices such as the
iPad are evolving; meaning that consumers are increasingly more
switched on for more hours of the day.
This has enabled retail stores to become multi-layered
experiences where shoppers can use their mobile devices as
cursors to access digital content about the store, the brand, and
specic products including reviews and price comparisons.
Post Digital /
Retailers have an incredible opportunity to use digital interfaces
to enrich tangible goods (a trend that has been termed post-
digital or more commonly the Internet of Things see feature
in Contagious issue 23). Along these lines, charity shop Oxfam
and research organisation TOTEM recently attached QR codes
to the price-tags of selected products in-store. When scanned
with a smartphone, the codes enabled consumers to access
an audio narrative about the items, recorded by their previous
owners. Meanwhile, the World of Whiskies store at Londons
Heathrow Airport allows users to scan RFID-tagged products
over touchscreen table tops to reveal blend and tasting notes;
and theLAB
range of cosmetics for men saw a 300% uplift insales at its concession in London department store Selfridges as
a result of implementing a similar technology in-store.
QR codes, RFID tags and stickybits (an app that allows users
to tag bits of video, or images or messages, to the barcodes
displayed on physical objects) are providing greater opportunities
for conversation both online and in-store, and they can also have
a very practical application. In Switzerland, RFID technology
was used to advance the self-service store concept seen in
the case study Touch & Pay (p. 17) which details how shoppers
entered a closed store and shopped for items using smartphones
and RFID). Meanwhile Barclays Banks contactless technology
system, in the UK, enables consumers to make fast and securepayments by simply holding their bank card up to a reader.
CHAPTERS /
01 /
INTRO
02 /
CURATED
03 /
TECH
04 /
DEMOCRATIC
05 /SALON
06 /
CAUSE
07 /
SERVICE
08 /
S-COMMERCE
09 /
M-COMMERCE
10 /
V-COMMERCE
11 /
FUTURE VIEW
12 /
CREDITS
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retail trends / democratic consumerism /
02 /MODCLOTH / BE THE BUYER / ONLINE
San Francisco-based online womens fashionretailer ModCloths Be the Buyer invites the publicto vote on which potential clothing designs shouldgo into production.
This effectively eliminates the problem ofproducing large orders of new garments withoutknowing how successfully they will sell. Whilstbrowsing through the clothing, shoes andaccessories designs, users can select the PickIt or Skip It options to vote for or reject eachitem. Only the most well-received pieces are thenmanufactured and retailed online.
Participants can share favourite designs viaFacebook and Twitter, while feedback is usedby the creators to improve unpopular styles. Thequantity of items produced is dependent on the
number of votes received and the productioncapacity of the designer, and users who voted fora winning design are notied by email as soon as itbecomes available. Users are also given the chanceto win new clothing items by entering Name It andWin It contests, where they can submit names fordesigns, with the best ideas being put to an onlinevote. Prices range between $4.99 for accessoriesand $249 for coats.
Since Be the Buyers launch in October 2009,the company has posted 300 samples online andproduced 50. Each item has had an average of
3,625 votes and 114 comments. ModCloth hasseen a higher sell-through rate for Be the Buyeritems, and customers participating in the schemetend to spend more time and money on the site.
www.modcloth.com
01 /WOLF & BADGER /LONDON
Providing an affordable platform for emergingdesigners, Wolf & Badger is a concept store inLondons Notting Hill that showcases designtalent from across fashion, accessories, jewelleryand product design. Designers apply online for
space within the store and, if chosen, can rent adedicated unit for as little as 55 ($86) a week.
Units come in the form of individually illuminatedblack and white veneer boxes, each with a metalplaque embossed with the designers name. Thereare currently over 50 designers with work on display.Wolf & Badger allocates a page to each one on itswebsite, where they can upload a biography andlinks to their own site. They are offered mentoringfrom the owners and co-founders husband andwife team Samir Ceric and Zoe Knight. The storealso provides insurance and stock management.
The shop interior was designed by an architectgraduate from the Royal College of Art reectingthe stores support for young design talent. Unlikemore common wholesale arrangements, designersselling through Wolf & Badger are given completecontrol of pricing, products and prots. Designersalso keep 90% of prot.
Since the launch of the agship store, Wolf &Badger has opened a pop-up concession in Britishdepartment store Selfridges. The space deliversan exclusive edit of Wolf & Badgers most exciting
new season nds as well as a programme of liveart, video, music events and screenings.
www.wolfandbadger.comDesign / Gus BrownGraphics & website / www.ishothim.com
03 /QUIRKY / NEW YORK / ONLINE
Quirky is a New York-based social productdevelopment company connecting would-beinventors to knowledgeable potential collaboratorsand customers.
Inventors pay $99 and hand over intellectualproperty rights to contribute their idea to theQuirky community. The top voted-on idea movesinto the development phase, where Quirkydesigners work on the specs and gure outhow it would work. Then, if it gets 500 pre-ordercommitments, a factory begins production, andthe inventor shares revenues from online sales andat bricks-and-mortar resellers. If the idea doesntmake the cut at any stage, the inventor gets all thedata on who was interested and what they said.Products developed so far include DigiDudes,expandable keyring tripods; Cloak, an iPad cover;
Scratch-n-scroll, a notepad/mousepad combo;and Powercurl, a cord organiser.
The interesting bit about Quirky is the inuencerfunding. If you drive the conversation around aninvention and engage in its development, youreeligible for a cut of revenue, be it 0.01% forcommenting or a bigger slice for voting and rating.
The site is growing consistently at 20-25% amonth, according to founder 24-year-old BenKaufman, and passed the 25,000 memberthreshold in June, when Contagious proled the
company in our regular Small but perfectly formedfeature (see Contagious issue 23).
www.quirky.com
CHAPTERS /
01 /
INTRO
02 /
CURATED
03 /
TECH
04 /
DEMOCRATIC
05 /SALON
06 /
CAUSE
07 /
SERVICE
08 /
S-COMMERCE
09 /
M-COMMERCE
10 /
V-COMMERCE
11 /
FUTURE VIEW
12 /
CREDITS
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40/41retail trends / service-centred tech /
R/GA Retail, part of New York-based agency R/GA, works withclients such as Nike, Nokia, and Zain to enhance their customers
in-store experience using innovative mobile, signage, and
touchscreen technologies. Here, R/GA Retails VP and executive
creative director John Jones argues that the best innovations
come from asking the most basic questions.
People have become used to getting user reviews, comparisons
and the best prices online. So what would make them want to go
into a store? Often solitary online shopping and virtual interaction
with products isnt enough to help customers gure out what they
want. People like to get out, pick up and examine products, try on
things, ask questions, and talk to people who know something.
They dont want to lose the pressure-free experience that comesfrom guring it out on their own, but good service is important to
them. And, simply put, people go back to the stores where they
get the best service.
The best innovations in retail are based on answering fundamental
customer needs. They provide experiences that combine the tactile
interaction of retail with the power of sales reps, often integrating
customers mobile devices to deliver information where and when
its needed.
How do I nd things?
In larger stores or venues, customers can often have difculty
nding what they what. From this simple observation camethe idea to use GPS or mapping. Some of the mobile location
mapping in places like the American Museum of Natural History
in New York gives us clues into the way we can guide people
through large spaces. Visitors to the museum can download on
their mobile device an application that guides them through the
massive halls and gives information on all the exhibits.
Is this product any good?
Online customer reviews have become a key part of shopping.
Bringing dynamic user reviews and product ratings into a store is a
good way to build loyalty. US beauty chain Sephora incorporated
the use of customer reviews in-store when they introduced amobile application that lets customers compare products and
reviews as they shop. Customers can browse products by SKU
(Stock Keeping Unit), category, or keyword or refer to the best-
selling items when making their purchasing decisions.
AmericanEagleOutfitt
ers/77kids/
07 /pages 41 - 42
SERVICE-CENTRED TECH /By John Jones, R/GA Retail /
CHAPTERS /
01 /
INTRO
02 /
CURATED
03 /
TECH
04 /
DEMOCRATIC
05 /SALON
06 /
CAUSE
07 /
SERVICE
08 /
S-COMMERCE
09 /
M-COMMERCE
10 /
V-COMMERCE
11 /
FUTURE VIEW
12 /
CREDITS
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retail trends / m-commerce /
By 2015, there will be a staggering 1.5 billionmobile broadband users across the globe,according to ABI Research, and for theseincreasingly connected consumers, mobileprovides a bridge between at-home and in-store.
Theyre using their phones for researchingproducts, comparing prices, checking in to stores,and increasingly buying products and services.Indeed, global spending via mobile phones is setto reach $119bn by 2015 (ABI Research). Japanis leading the way, but mobile shopping more thantripled in the US last year, and Europe is expected
to outpace North America by the end of 2010.
As ahead-of-the-curve retailers have been quickto realise, mobile benets from being a direct andinstant link to customers, while GPS trackingallows messages to be targeted to a speciclocation. Yet many retailers still havent takenadvantages of the opportunities: while ForresterResearch suggests 74% of online retailers areworking on a mobile strategy, a report fromMultichannel Merchant in February 2010 revealedthat nearly four in ve multi-channel retailers in theUS were not yet using any m-commerce features.
Apps and sites /
Among those retailers that have implementedclear strategies, mobile optimised e-commercesites or mobile apps are popular. The last yearhas seen a 91% increase in the number of onlineretail mobile apps accessed by consumers, andmobile web use for shopping has also increasedby 47% in the same period, according to researchby comScore.
eBay, for one, is seeing the benets. Thecompany has emerged as a leader in mobilecommerce and predicts that it will move $1.5bnworth of goods through its mobile channels in2010, more than double last year.
Part of the companys success can be attributedto its broad and inclusive approach: its currentrange of apps is compatible with iPhone, iPad,Android and BlackBerry. It has also been quick offthe mark: with 14 mobile apps already under itsbelt, it aims to produce another every ve weeks,according to eBays vice president for platformbusiness solutions and mobile, Steve Yankovich.We pick and choose what will move the needle, Yankovich told Bloomberg Businessweek in aninterview, and then we do it fast.
Whats more, as the majority of eBays sales
are by auction, the immediacy and accessibilityof mobile allows users to receive alerts if they areoutbid, or when a sale is about to end.
This sense of urgency is making mobile a primaryfocus for New York-based ash sales site GiltGroupe too. Since the launch of Gilts iPhoneapp in October last year, it has been downloadedover 280,000 times and on 4 April, a day after theiPad debuted, 2.4% of Gilts sales came from thedevice. Sales from both apps so far account foraround 7% of overall sales.
Following the introduction of the iPad, retailershave rushed to develop apps for the device,particularly luxury brands targeting a specicdemographic such as Mercedes-Benz with itsSLS AMG app. This was loaded onto an iPad andsent to the top 220 French footballers invitingthem to book a test drive - all of them did, say theagency Proximity BBDO, Paris.
Fashion retailer Gap beneted from rst moveradvantage with the launch of its 1969 Stream an app that makes use of the iPads excitingdisplay and pinch, tap and drag functionality
while allowing users to browse, share and buyfrom the latest Gap product range. Exclusivecontent included a music video, Twitter streamsfrom Gap designers, and contributions frommusicians and fashion insiders. Although Gap
wouldnt report any actual results,AKQA, San
Francisco, the agency responsible for thecampaign, commented that womens jeanssales exceeded expectations.
Location-based /
Location-based mobile services are a morechallenging proposition. Despite the obviousadvantages (relevant messaging, up-to-the-minute product and retail information), the fearof alienating an already over-targeted consumer
on such a personal device has rendered on-the-spot activity mainly the preserve of gaming andmapping applications.
However, the new wave of location based appsfacilitated by the iPhone and becoming widelyavailable on Android and BlackBerry allowsmobile users to opt in to receive messages,neatly side-stepping the risk of bombardment.48% of Britons would be interested in an app thatdetected their location and sent promotions fromnearby shops, according to Matt Taylor, head ofquantitative analysis at London-based researchconsultancy the Future Foundation, speaking atthe nVision conference in September 2010.
Layar, an augmented reality (AR) browser,allows developers to create bespoke content
M-COMMERCE /THE BRIDGE BETWEEN AT-HOME AND IN-STORE
09 /pages 48 - 50
CHAPTERS /
01 /
INTRO
02 /
CURATED
03 /
TECH
04 /
DEMOCRATIC
05 /SALON
06 /
CAUSE
07 /
SERVICE
08 /
S-COMMERCE
09 /
M-COMMERCE
10 /
V-COMMERCE
11 /
FUTURE VIEW
12 /
CREDITS
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54/55retail trends / credits
CREDITS
Editorial Director
Paul Kemp-Robertson
Series Editor
Georgia Malden
Edited by
Lucy Aitken, Georgia Malden, Mandy Saven
Additional writers
Stacey Jacobs, Nick Parish
Head Researcher
Gemma Ball
Additional research by
Joanne Allison, Katrina Dodd, Emily Hare, Nicky
Herbert, Stacey Jacobs, Alex Jenkins, Robin Leeburn,
Isolde Roche, Will Sansom
Additional insights by
Kate Ancketill, Samantha Clarke, Amy Hedger,
Jo Murphy
Contributors
John Jones / R/GA Retail / www.rga.com
Alastair Ray / Ray MediaNick Timon / Adjust Your Set /
www.adjustyourset.tv
Cover images
Victor Churchill Sydney / www.victorchurchill.com
Design / Dreamtime Australia Design
Photography / Paul Gosney
Illustrations by
Kuanth / www.kuanth.com
Production
Smita Mistry
Published November 2010
Contagious Communications is an intelligence
service focusing on future-facing marketing ideas
and emerging technologies across a diverse range of
media channels and product categories. It is a limited
company registered in England, registered number
6183878.
Contagious Communications
45 Fouberts Place
London, W1F 7QH, UK
T: +44 (0)20 7575 1995
www.contagiousmagazine.com
This report is part of a series of Special Reports
produced by Contagious.
The series also includes reports on Mobile Apps,
Brand Communities and Entertainment Marketing.
For more information, call +44 (0)20 7575 1998
or visit www.contagiousmagazine/shop
Entertainment Marketing /
Brand Communities /
12 /page 55
Produced by Contagious Communications in partnership with GDR Creative IntelligenceGDR Creative Intelligence is a London-
based trend analysis and future fore-
casting consultancy.
GDRs quarterly Global Innovation
Report highlights the latest develop-
ments from global brands in retail and
hospitality, with source material direct
from the worlds leading innovators in
design, architecture, digital media and
experiential marketing.
GDR works with global consumer
brands and retailers, including Pepsi,Starwood Hotels, Sony, Orange, Nokia,
P&G and Macys, providing them with
the thought leadership needed to gain
competitive advantage.
GDR Creative Intelligence
Dilke House, 1 Malet Street
London, WC1E 7JN, UK
T: +44 (0)20 7580 5589
www.gdruk.com
CHAPTERS /
01 /
INTRO
02 /
CURATED
03 /
TECH
04 /
DEMOCRATIC
05 /SALON
06 /
CAUSE
07 /
SERVICE
08 /
S-COMMERCE
09 /
M-COMMERCE
10 /
V-COMMERCE
11 /
FUTURE VIEW
12 /
CREDITS