Ken Nisch, chairman of JGA, has designed brick-and-mortar retail stores for nearly 40 years. He said digital is and will continue to transform the retail experience during the next three years as smart phone sales are expected to top three billion sold annually.
Gartner reports 1.8 billion smart phones were sold last year, with Apple and Samsung controlling half of the market.
Nisch said now it takes three year’s income for most Indian consumers to afford a smart phone. But with smart phone prices expected to fall to $35 in the next two or three years because of Chinese or low-end manufacturers, he said smart phone usage is expected to double.
Nisch was one of the featured speakers at the annual SHOP Retail Conference held at the University of Arkansas on Wednesday (May 14). The spring conference was presented by the Center for Retailing Excellence at the university in cooperation with this year’s sponsors, The Mars Agency, Walmart and Shopper Events.
CREATIVE RESPONSES NEEDED
The conference theme was “Growth through Creativity,” and Nisch said digital is prompting creative thinking among retailers and brands who want to move from being stuck in the middle out to the edges, where people are connected through high tech and “multiple touch points.”
“Digital is altering everything we do. Even jean makers have had to redesign pockets to allow for bigger smart phones. It’s where people go for information, scout for locations to shop, task their shopping lists. ... Consumers use phones to fill their idle time, engage in pre-shopping and social shopping,” Nisch said.
He said retailers must figure out how to engage a generation quite comfortable living on stage.
“By the time they get to your store they have already decided what they want to buy and they expect you to help them find it quickly. They don’t want to browse, but there is an opportunity to sell up, for those who can engage these shoppers,” Nisch said.
David Shing, a “digital prophet” for AOL, and a speaker at Wednesday’s conference, said today’s shoppers have a “show me” culture as 85% of consumers watch videos from six-second Vine posts to YouTube. Shing said brands have to win over digital shoppers differently. They don’t conform to the traditional shopping patterns of past generations.
“Consumers are creators, curators and critics rolled into one. They will recommend only 5 to 9 brands to their friends and family, so making that list is important,” he added.
Shing said the smart phone is the first screen in people’s lives. It’s not their big screen television or tablet. But he said mobile is often the last place brands get creative with their messages, content and advertising.
“You should start with mobile, but for some reason it’s being treated as an infant when it comes to content marketing. I also believe that experimentation is absolutely necessary,” Shing said.
Digital shoppers often want customization and edited choices, and this does not fit the traditional shopping warehouse model build around variety and one-stop shopping.
“The shopping ecosystem has to be rethought. There is really only two reasons to have a physical store, for the shopping experience or for the last mile logistics and instant gratification. Many retailers have built their models on embellished warehouses but that’s not the future,” Nisch said.
He recently attended a fashion retail conference in Spain and said the talk among several retailers from American Eagle to Aeropostale was to close underperforming stores and focus on fewer, more connected and experiential venues.
Nisch challenged those at the conference to think about ways they might make a physical presence an interesting experience. He said the Hershey store in Las Vegas has been a big hit as the brand seeks to engage shoppers with custom products they can create using a 3-D printer.
Before and after the shopping experience in the physical he said brands should also use digital to reinforce and engage those customers, like GAP and its experiment with Piperlime to start conversations with shoppers who are enroute to the store.
THE BRA STORY
Nisch said the new retail ecosystem is one that moves seamlessly between digital and physical. He said the physical may be a showroom, with various experience zones within it. The Jockey Bra store at the Woodfield Mall in Schaumburg, Ill., was one example he gave for a brand that has married digital and physical on a global scale with limited real estate.
He said Jockey focuses on the everyday bra, with just three colors and five styles that come in 55 sizes that are based on their own standard fitting guidelines. Shoppers can get the sizing kit and fit themselves at home with online assistance or come into the store for a personal fitting. But the store itself is designed like a showroom, with a spa feel.
Jockey’s objective with their physical store was to create an innovative new bra shopping experience store. They accomplished this through direct consumer contact, online and brick & mortar. The store design allowed for individualized consultations and retail. It also provided a solution to the frustration associated with traditional bra shopping.
Nisch said Jockey’s willingness to move toward to the edge with its store concept helped it create a “breakthrough moment” for the consumer. He said Jockey is able to expand its reach with a hub-and-spoke concept with pop-up stores that facilitate the one flagship store.
One observation by Jockey after opening the store last summer, was that many woman want to do the fitting in the privacy of their home, but then they talk a friend into coming to the store for a fitting and they tag along providing opportunities for another sale.