When innovation is a recession-beater: trends in retail

A brief account of the meeting that illustrated the culture of innovation in shop design.

Imola, 25 July 2011. Keeping faith with its philosophy, Cefla Arredamenti is responsive to every aspect of innovation, from product to shop design, from advertising to marketing; this broad vision has originated the highly innovative products presented during the last year. Carrying forward this approach, Cefla arranged a stimulating speech by Fabrizio Valente - founder of specialist Retail monitoring firm Kiki Lab and the Ebeltoft business alliance - which, together with an overview of the key international cases, provided a snapshot of the general context and main current trends in retail innovation. “The ongoing economic crisis is accentuating the polarisation between the many businesses that have stopped investing in innovation and the courageous, far-sighted few who are still assigning resources and ideas to innovation, combining revamping and efficiency projects if necessary,” Fabrizio Valente stated. “So in this scenario, investing in innovative projects represents an even greater opportunity.”

Context and trends: an overview
The international survey into innovation in the retail industry, undertaken in association with the Ebeltoft group partners, will be presented in Milan on 16 November 2011, at the annual Retail Senza Frontiere congress organised by Kiki Lab (www.kikilab.it).

Smart Pricing
Pricing is a hot topic at present, and generally this approach is considered as the antithesis of innovation. Yet customers are proving more and more responsive to strategies that combine cheap pricing with innovative, appealing projects. Groupon is achieving great success within a short time, thanks to a Price 2.0 project. The basic idea is not new: a product or service is offered on-line at a discounted price each day, but the offer only takes effect if a minimum number of customers buy. This condition pushes customers who want the product or service to persuade friends to purchase it too.

Generous care
Customer service is an intrinsic retail sales strategy. At times of indiscriminate cuts, standards tend to drop, just at a time when customers’ expectations are rising. Zappos sells on-line and its main product category is one in which the sensory relationship with the product is crucial: shoes, offered without discounts. This problem has been overcome thanks to a level of service that has become legendary. If the customer changes his mind he has no less than 365 days to return the shoes, carriage-free, and all customer care services are based on cordiality, empathy and policies always weighted in the customer’s favour. The secret of this success? A carefully chosen team, motivated on a daily basis.

Anti-elitist qualities
In the past, luxury generated sales through ostentation. Today, this concept and its positioning are being blown to shreds. The growing trend is for quality products that do not have the undesirable connotations of elitist contexts and positioning. Jamie Oliver, one of the world’s most popular chefs thanks to his success and growing media exposure, recently launched a chain of convenience stores in London called Recipease. These stores have an experiential dimension: as well as purchasing, customers can learn to cook good, quick, healthy recipes in an informal, friendly environment..

Socialtailing
We are witnessing the continual growth of a social, community dimension in which retailing becomes a platform enabling customers to share and exchange experiences, leading through to actual co-design in some cases. MyDeco operates on line and offers customers the chance to create the interior design of their homes using anything from the most exclusive designer items to the most basic products, with the aid of other members and their advice. If the original interior design solutions generated prove popular and are used, fees may even be paid.

I trust you
Customer trust is one of the most precious values for a retail brand and is tangibly reflected in companies’ earnings. The area Danone has opened in Barcelona reinforces the bond of trust the brand has built up with consumers over its 90 years in business. Apart from offering product tastings, the area’s main task is to share the brand’s history, values and projects with visitors by means of a series of interactive totems and a busy schedule of meetings on the principles of healthy eating.

Efficiency for customers
Time continues to be a new luxury for people in general, and thus a strategic factor of differentiation for the retailers capable of offering efficient, simple, well organised, quick shopping procedures.
Apo.take is a small German pharmacy chain that has revolutionised the information gathering and purchasing process: the shelves accessible to customers carry not the products but only the product information, in simple terms enabling customers to acquire guideline data independently and then ask the pharmacist for advice if necessary. 

Glocalism
Trade has local souls: even multinationals are becoming increasingly aware of this and the most astute retailers are combining strong global identities with localised nuances. Havaianas has become a global brand, but its first flagship store in Sao Paulo emphasises its Brazilian roots with a tropical layout, and it also proudly displays the humble origins of its first sandals. 

Affordable dreams
The crisis is fuelling the need to dream and for a shopping experience that is gratifying yet affordable in terms of levels of expenditure and compatibility of experiences. Swarovski has become synonymous with stimulating, sparkling consumption, and the London flagship store emphasises this. Since the crystals are sold loose, the customer is strongly involved in the visit, purchase and personalisation process that enables her to apply Swarovski stones to her clothes and possessions, making the decoration procedure affordable and gratifying. 

Greentailing
Green retailing is expanding due to both social awareness of environmental problems and economic considerations, since financial benefits can be generated for businesses in the shorter and shorter term. Kbane is the first DIY concept store, launched by the Leroy Merlin group, offering only green products and solutions for building, decorating and energy generation.

Fluid Retail
The boundaries between purchase decison-making processes and visiting models are blurring and one interesting opportunity for the retail sector is to offer the customer multiple modes of use, adapting to different customers and situations, by creating fluid, flexible contexts. The latest concept from the Tous jewellery chain is to mix self-service areas, designed for fast use and direct interaction with products, with more sophisticated, luxurious areas, where the priority interaction is with staff and the purchase process is totally different.