Retail Future, the annual trade fair on digitalisation and trends in the retail industry, held its 6th edition this October at the Caixa Forum building in Valencia. With a full programme of round tables, experts discussed topics ranging from the economic perspectives of retail, new forms of sales and business management, as well as examples of successful and innovative projects.
As in previous editions, we attended the Retail Future fair to learn about new trends in the retail sector and network with speakers and attendees. After the day, we have reflected and synthesised what we consider to be the 8 essential keys that will mark the path of the Future of Retail, both for small retailers and for large fashion brands:
Knowing our customer well
The first and most valuable lesson for successful retailing is to learn everything about our customer. Rosa Pilar López, business director of the Fashion & Beauty section at Kantar, presented her conclusions on current customer behaviour. In a post-pandemic context of rising inflation, consumers are buying less but spending more, especially in the food sector, simply because of price increases. “Consumers have become more rational when it comes to shopping,” he added.
On the other hand, according to Enric Ezquerra, from Realfooding, despite the context of difficulties and headwinds, the ‘value’ factor is increasingly more important than the ‘money’ factor in users’ purchasing decisions. “Customers can behave differently depending on their interest in your product and go for what pleases them and matches their lifestyle,” he said. Therefore, this situation opens a window of opportunity for brands. If we are relevant, we will have a better chance to compete successfully.
Opening up to uncertainty
Today’s world is characterised by being difficult to predict and to understand, both for organisations and retailers. In this scenario of uncertainty, visionary and expert Jaime García Cantero shared his thoughts on the trends that are going to be crucial for Retail companies, starting with understanding the “WOW effect”, the idea that customers’ decisions are made quickly and emotionally. As companies, it is necessary to generate this opportunity to surprise customers, but also to resist the actions of the competitors. According to García Cantero, one of the current and most significant “wows” is the emergence of Generative Artificial Intelligence, the branch of Artificial Intelligence that focuses on generating original content from existing data.
Another challenge for companies, according to the expert, is the way we organise and function as a group. “Organisations have a fundamental objective which is to change our solid, rigid structures and make them open to change. Roles are changing, repetition is not enough and the ability to improvise is much more important,” he said.
Use the technology that best suits our business
Uncertainty and this concept of “liquid society”, introduced by sociologist Zygmunt Bauman, also relocates to retail businesses. In recent years we have seen how the integration of online and offline retail has given way to a Figital Retail experience (physical and digital), which we have already discussed in depth in the Es Design monograph “Retail Figital, the renaissance of commerce”, as well as other trends such as the incursion of the Metaverse, the use of smart fitting rooms or RFID tags on clothing, among other examples. In this new scenario, it is essential for brands to analyse and understand what each channel brings to the customer and how they should adapt the trends to their own business.
In this sense, humanist and lecturer Xavier Marcet defended the idea of listening well to customers and being consistent with them. “How can we be consistent? We should not speed up with technology but serve the future only half a step ahead”, he said. While technology will be important, so will proximity. For Marcet, retailers need to be aware of putting technology to their advantage and think about how technology can make us better: “Think about customers and how you want to evolve with them”.
Generating trust with the customer and the community
In line with offering a closer and more personalised service, the visionary and expert Jaime García Cantero stressed during his speech the importance of building trust. “The centre of retail is once again the physical shop. We want a quick shopping experience but we also like a place where we can share and empathise”, he explained. In his own words, a shop should be understood as a safe space for the community. This is why there are retail projects such as bookshops that organise workshops or book presentations in their spaces.
Pepa Casado, founder and researcher at Futurea, reflected along the same lines. “Physical retail has the capacity to curate, to select products with more care, thinking about the customer’s experience and the brand”, she said. This ‘curation’ also has to do, according to Casado, with the concept of ‘selection’: supporting and helping the customer when deciding between millions of options in the market with the product that truly connects with him or her.
“Moreover, when a brand appeals to us, it not only appeals to us in one product category but can appeal to us in many categories because we are talking about how we connect and how we vibrate in the same tune”, she added. For this reason, multi-category brands are beginning to appear that offer fashion and habitat, as is the case of Sessun, which sells women’s fashion while offering an exhibition of selected handicrafts in its shop.
Humanising retail
In order to create community and build trust, physical shop workers are the best brand ambassadors. In this sense, the retailer Marcos Álvarez insisted during his talk on the importance of attracting workers to the brand they represent.
“We retailers are not aware that our salespeople are our first customers. If we are not able to sell our product to our shop assistants, they will not be able to sell it to our customers”, he explained. In other words, Alvarez said retailers must learn to empathise with their salespeople, ensure that they are comfortable in their position and that their aspirations and desires are accommodated in their professional experience. “The people who work with us are talent and capital within the organisation. Let’s do everything we can to keep talent with us,” he said.
Understanding the changes in the system
At the round table “Lab Retail: Discover the shop of the future in key sectors” we had the opportunity to learn how shops are evolving from the point of view of several experts and consultants. Pepa Casado, expert in the habitat sector at Futurea, spoke about “furniture as a service”, a trend that consists of selling not only the equipment or furniture but also the after-sales services, throughout the useful life of the product. An example of this is Nornorn, a company that offers a subscription to fully circular office furniture. According to Casado, this “servitisation” has to do with changing lifestyles and new ways for customers to purchase products.
On the other hand, another trend that responds to the new way in which customers approach products is the creation of “shoppable spaces”. According to Casado, these spaces are the result of users’ need to interact in a more natural and organic way with the product. A great example is shoppable hotels, where users can buy any product in their hotel room by reading a QR. Another example is showrooms such as the Bernadí Hub in Barcelona, where the professional prescriber is encouraged to go not only to buy but also to experience the product, exchange knowledge and enjoy a community space.
Embracing sustainability in all its dimensions
Sustainability and environmental care is a radical and urgent issue in order to align with the wishes and expectations of our customers and to avoid environmental and economic impact. According to Bloomberg data, 9.7 million tons of furniture were discarded in 2018, an amount equivalent to 80% of the furniture that was manufactured that same year. As we have seen above, many reference projects have a business model that has at its core the concept of circularity. “Increasingly, we see how conditioned furniture has become a valuable product: we are abandoning the ‘pre-used’ label to talk about ‘pre-loved’, which says a lot about how the perception of users has changed over time”, reflected Pepa Casado from Futurea.
Another very present topic at Retail Future was the idea of considering sustainability in all its dimensions and especially considering people. In this line, the visionary and expert Jaime García Cantero made the following reflection: “When we talk about sustainability, everyone thinks about the environment, but there are 17 Sustainable Development Goals (SDGs) and only 5 are related to the environment”, he said. The fight against poverty, diversity, democratic quality and equal opportunities are also SDGs and, in García Cantero’s opinion, this is a huge opportunity for retail, especially small retail.
Finding our competitive edge and competing successfully
As we have seen, Retail Futire has taught us some great lessons. If we can get to know our customers well, build trust in our business, be resilient in the face of change and use technology to our advantage as well as understand the changes in the system and embrace sustainability in all its dimensions, we will be able to compete successfully.
In the scenario that opens up in 2024, physical shops, particularly the own shop, have regained their weight against the online channel as the most important channel for fashion. This is confirmed by the latest edition of the Veepee-Modaes Barometer of Fashion Companies in Spain. The physical store is the visible face of the brand, a unique space where we can show what makes us unique and connect with the consumer.
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