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Spotlight on Gen Z
Want to know what Gen Z cares about? New survey research from NRF gives some interesting insight like the fact 3x of Gen Zers shop mostly in-store vs. online. So much for the death of physical retail.
Nike keeps the top spot in sportswear, although Adidas is making gains at #3. Vans overall is unusually popular, taking the #2 spot, as most popular in footwear. Apple loyalty is at an all-time high with an astounding 84% who say their next phone will be an iPhone. 47% are using their mobile phones to shop in-store, to price compare or ask for feedback from their friends.
When asked what retail technology they'd most welcome, more than half ( 55%) say they'd like to design unique products, 48% want in-store tools that allow them to customize products and 42% say they want to design unique products and create them on-site. 31% wanted interactive screens to help them shop in-store. That should be no surprise (here are 5 reasons are brains are wired for visual marketing).
Meanwhile two thirds of millennials shop in-store every week. Representing $200 billion in spending power, millennials are less influenced by ads, look to greater retail tech in-store and appreciate the role of customer service.
Retail Reinvention - Retail Gains and Losses
I’m seeing a lot more people abandon the “Retail Apocalypse” tag and am seeing new takes more representative like “Retail Reinvention.” Bloomberg argues that retail’s downside has been priced into the market, an article that included this take on retail jobs which show that category matters. For example, Kroger announced it is hiring 11,000 grocery store workers.
Nordstrom announced a new men’s store focused on retail tech integration. Best Buy opened its first store in 7 years. There’s definitely a lot of shifting going on, including in population densities and the migration to cities. Ikea is specially planning for increased urban consumer density.
Retail defaults continued in March and April, as retail executives believe 2018 will equal or outpace 2017. Recent hits include Sears, Claire’s, Nine West and Bon Ton. Bed, Bath and Beyond reported mediocre results and their stock took an 18% dive, even as the home goods category as a whole showed strength.
Walmart plans to remodel 500 stores and open 20 new locations as part of its $11 billion capital expenditure program, that in particular is focusing investment in Texas and Florida.
We recently wrote how Foot Locker’s store closures were a self-inflicted wound – in fact the sneaker industry grew 12% YoY! Upstart sneaker company Greats is investing in store expansion to take advantage.
Billionaire Mall Owner Rick Caruso, says that Amazon has been good for retail, paving the way for the future of retail and creating the competitive pressure necessary to innovate.
Spotlight Research: RIS Wake Up Call for Digital Transformation
A great white paper was released by RIS, discussing the need for digital transformation. There were several big takeaways which pointed to the future of retail. IT budgets are increasing on average over 4%, with 69% of budgets increasing overall.
“Retail leaders, according to study data, have three major distinguishing characteristics compared to laggards: By a wide margin, they are investing in advanced analytics, optimizing stores, and retiring legacy systems.”
88% of retailers still see brick and mortar as their primary source of revenue, so the implementation of technology is very much still focused on influencing their primary revenue stream.
Not surprisingly, the top three priorities for technology in-store are mobile assisted technology for sales associates, interactive retail displays and order online to pickup in-store.
Retailers Rush to Same Day Delivery
Walmart announced a partnership with Postmates, giving it the ability to deliver to 40% of the country by its estimates. $9.95 is pricey, but convenience seems to be more valuable than price these days.
Delivery networks and same day delivery were a big theme at Shoptalk 2018 with announcements from Target, Walmart and in the grocery industry.
Meanwhile, President Trump ordered an investigation into the US Postal Service economics, with a particular focus on Amazon package delivery. Analysts have concluded that the relationship is profitable and the shift to eCommerce should help the struggling USPS, which is laden with pension obligations.
Sounding Like a Superhero at the Retail Water Cooler
- Amazon spends more money on R&D than Google, Microsoft or anyone else. R&D spending rose 41% YoY as they attack voice, physical retail and other new markets.
- Here’s a fun take about Q1 2018 marketing winners and losers and what we can learn in marketing trends.
- A good interview of Olivia Kim, VP of Creative Projects from Nordstrom, which talks about pop ups, collaborations and the role of design.
- B8ta announced it was offering a “store-as-a-service” offering to use their full tech stack to help companies open flagship stores, starting with Netgear. Will its foray into enablement technology work?
- We hope you’re hungry. The number of food halls is set to triple by 2020. This is part of the overall transformation to more experiences in retail.
- Dyson launched a cool showroom store in NYC. It’s worth looking at just for the pics.
- Nike acquired Invertex, a Tel Aviv based computer vision firm. Retailers are continuing to acquire companies to build advanced retailing skillsets and technology (see Nordstrom). Should retailers license or acquire technology?