It’s a fascinating time for retail in the UK. Retailers are learning how to adapt to this new world we’re in now. Shopping habits have changed, supply chains face emerging challenges, and whispers from the metaverse speak of brands positioning themselves in ways that would’ve seemed like science fiction less than a decade ago.
The industry is resetting. That was definitely the vibe I got from Retail Week 2021, which was recently held over two days in London. It was the first time many of these retailers had got together for more than 18 months.
I always turn up at these events a bit like a detective, curious to learn what the new tribes are up to in retail. Who’s creating the new groups, where they’re coming from, and how that’s all weaving together to create the future of retail.
There were some big, important themes that came through this year around sustainability and the circular economy, accessibility, inclusion and diversity. And there was also some cool stuff on the metaverse and the emerging role of gaming and eSports as drivers of growth in retail. Here, I’m going to share some of my thoughts on these and other things that caught my eye at Retail Week.
A new way of looking at consumers
A theme that really stood out for me this year was communities. The keynote on the first day of the event was from the Co-op’s CEO and the big takeaway for me was looking at the future of retail as consisting of communities.
It’s a theme that you can see in the changing way we view consumers. Traditional segmentation has revolved around personas. So a beauty provider might aim an anti-wrinkle cream at women aged 34-45, and they would create a whole persona for these women. That was fine in the old days. But in today’s market, that persona isn’t going to work. The anti-wrinkle cream buyer might be a 15-year-old guy who wants to take preventative measures. And so the personas that got brands where they are now, aren’t going to get them where they want to go.
We need to start collapsing stereotypes. When we think about being digitally native, for example, everyone immediately thinks of millennials. But that’s not always true. You’ve got lots of ‘silver surfers’ that are more digital than kids. So our whole concept of how we think about segmentation in general, whether that’s segmentation from a marketing perspective or from a behaviour and patterns perspective, is now moving into tribes and communities.
The question is: how do retailers tap into that intelligence now that cookies are becoming a thing of the past? The only way they can do that is by being able to process all the signals we as consumers are leaving out there in our communities.
The rising importance of gaming for retail
One of the communities represented for the first time at this year’s Retail Week was gaming. There are 2.6 billion gamers across the world. That’s a huge group of people with tribes within that are built around particular mobile platforms, consoles and games. These are the consumer tribes of tomorrow.
When you ask any parent how their child consumes content these days, 99 percent will say via YouTube or digital channels. That consumption of digital data, digital information and entertainment means that the shopper of tomorrow is going to be digitally-minded in a way that’ll make most of us now look pre-historic.
When you look at Louis Vuitton, Balenciaga, Gucci and other luxury fashion brands, you can see them responding to this. They understand that to stay relevant, they need to shift and come to where the shoppers of tomorrow are today. Last year, Balenciaga did a gaming version of one of their collection releases. And Louis Vuitton did the virtual clothing for the game League of Legends. So there’s already this blurring between the metaverse and established ways of doing things in retail.
Retail Week acknowledged this change by having Twitch lead a session on gaming activations and there were other metaverse-related talks too. There was only an hour or two allocated to the topic, but it was significant. It was a first, and it spoke of things to come, of that crossover between retail and gaming.
Again, it links back to the idea of these communities that are being built out there – and gaming is just one example – which offer huge potential if retailers can tap into them.
Technology as a driver of meaningful change
The other topic everyone was talking about was sustainability. There was a great talk from Carly Thomas, Head of Sustainability at Superdry about everything they are doing across their supply chain to make a real impact and do so much more than just greenwashing.
We had a brief chat after and I asked her: “Is technology important in sustainability?” I was genuinely curious about how important it is. And her response was that she saw sustainability as becoming an audit-esque function within the business, where they’re literally asking themselves: ‘Are we compliant to this? Are we compliant to that?’
And the key to answering these questions is data. Data is at the heart of sustainability, because you can’t claim to have any impact at all without the data to support the claim. You need to be able to say how many bottles you’ve saved from going to landfill by creating a new plastic recycled jacket.
What we’ll also begin to see, I believe, is product information leading down to the carbon footprint of individual items, so we can see transparently what the carbon numbers are for a jumper or jacket. It’ll be an expectation from consumers and it’ll all be powered by data.
Aside from the big names, there were two startups there that focused on taking secondhand items, cleaning them, listing them and sending them to you. So there’s a whole circular economy movement that’s just in its infancy and we’re going to see more and more of that as people become more comfortable with the concept. Because we’re a nation of charity shoppers, and now you can get those items presented really beautifully, really well maintained and cleaned.
The key to success for tomorrow’s retailers
The startups brought a lot of excitement to Retail Week and it was really lovely to see a few them that have built their technology on Microsoft’s technology stack. There were several companies who had built on Azure, using our AI for this and our cognitive vision services for that. That was really nice to see.
It was also encouraging to see some of the discussion leaning towards themes we’ve been promoting for a while now. I definitely felt that people now understand that if they’re going to be a successful retailer, they need to think about the business from a platform perspective and that data is going to drive all of that.
You can’t be successful if you don’t have a true single view of your customer, or move where your customer is on their customer journey or shopping mission. And that’s where our Cloud for Retail comes in. We understand that there’s a shopping mission and a customer journey. We understand that there are data points and signals throughout that shopping mission and journey. And we provide the platform and intelligence and technology for you to extract value from that.
That’s the big challenge retailers face now. They’ve spent a lifetime on point solutions, a lifetime on trying to solve one thing at a time. But the world has shifted a little bit. And to stay relevant, retailers need to shift a little bit too.
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About the author
Ali is a highly successful industry and business leader, with a successful career spanning 25 years working in the retail and technology sectors including Executive Director of Retail at Verizon. He collaborates with Microsoft’s retail customers and partners as the UK Retail Industry Executive creating visionary, business and technology outcomes.
Outside of Microsoft Ali is currently finishing his book, The Future of Retail, Now and hosts The Retail Podcast, Ali is also an advocate for Andy’s Man Club a leading movement against male suicide.