A few months ago, TFR commented on how a few companies are redefining the way we shop. I meant the “What” but also the “How” and feel it’s totally aligned to the shift from a product-centric approach to a customer-centric one.
In the first case, the “What” is not only brand-new products but second hand items that facilitate the circular economy, respond to the demand for sustainability items and make quality clothing more affordable. Companies in this segment or business model, including renting, are Thred up, Rent The Runway, Vestiaire Collective or The Realreal.
In the second case, the “How”, we see companies investing in their point of sales willing to redefine the customer experience at different levels: product, visual display, technology and customer service. Vestiaire Collective, for example, announced that will open its first permanent store in Womens Designer Studio at Selfridges, Oxford Street London.
Gap is the latest retailer to plug into the second hand apparel market. Gap partnered with Thred Up program to help customers “clean out” their closets, or in other words, , increasing the stock turn of customers closets. More stock turn, more cash flow. This is the pillar of fast fashion. Thred Up customers can exchange their used clothing for credits to be used at Gap brands (e.g. Banana Republic, Gap, Old Navy). I see this as a way to increase traffic (sales) as the automotive industry promotes trading your old car to buy a new one.
Department stores need reinvention as Millennials are running away from them. New York is one of the cities where we can see more innovations in regards retail and this is what was illustrated in best stores to visit in NY. The brands and stores included are going beyond their core selling product and are presenting their value proposition as an ecosystem.
For example, Lululemon store is not displaying only its yoga garments but the customer can seat and watch mindfulness courses thru individual tablets, in a relaxed ambient. Sonos store in NYC doesn’t limit its offer to displaying its speakers and customers can listen to music as would at home. The objetive is going beyond the tangible to offer the best experience within the brand ecosystem.
Another trend in retail is local, neighborhood, curated stores (H&M Mitte Garten, Nike Live stores) Nordstrom Local are convenient hubs for online order pickup, onsite alterations, fast and easy returns, free Personal Stylists, and much more. Nordstrom provides services including tailoring, personal stylists, tuxedo rentals, haircuts, repair and cleaning shoes or bags and manicures.
Recently, Nordstrom opened its new flagship store in New York city with a bunch of services including restaurants, beauty services and events. From a customer point of view, brands and product catalogue is quite unique. See for example the picture above with Nordstrom x Nike. Nike’s product portfolio, curated by Nordstrom/for Norstrom, its display and experience reminds me of a luxury store.
Customers are looking to unique experiences, like feeling part of a tribe or selected group that will benefit from a curated “event”. The aspirational behavior or desire increases the higher you go in the customer segmentation (socioeconomic status) pyramid. Customers from the high-end segment are demanding what Lululemon or Sonos are offering: “entertainment” around the core product . The experience of visiting the new Nordstrom store tries reminds me to visiting the Moma Museum. It’s a unique museum with temporary exhibitions. You will enjoy the “exhibition” (special collaborations & capsules) in that store, available only for a limited period of time.