Matthew Brown: “Retailers need to rethink what customer loyalty really means in the future”

Written by Flame

Matthew Brown, Retail Futurist & Trend Speaker, is optimistic and thinks that retail isn’t going anywhere, nor bars restaurants or cinemas. For them, Covid is going to be another shock to the system. “Many businesses won’t survive but we are also going to see a huge amount of innovation coming out of all of this”.

What do you think the post-COVID retail landscape will look like?

The simple answer is that I don’t know! It is still too early to tell how much damage has been done to the economy and how much social distancing will need to continue into the near and medium term.

There are some obvious long-term trends in retail that have been put on hold because of Covid – most specifically, the trend towards community, hospitality and tactile experiences – In a world where we cannot touch and try product in the same way, then clearly retail is not going to look the same as pre-Covid.

The future also for bars, restaurants and food courts looks bleak at the moment because the very core of their appeal; people in large numbers, may not be possible again for a long while. Some businesses may just not survive the wait. This is a real pity.

However, innovation always thrives in crisis and you can expect a summer of outdoor hospitality, possibly drive-in cinemas, drive-in restaurants and maybe even drive-in festivals – to fill the gap!

Looking through this uncertainty, it seems to me that Covid is really accelerating existing trends and that post Covid retail will look like retail five or 10 years down the line would have looked if Covid hadn’t happened….

Some High Street and malls will die, whilst other, more community and purpose-driven retail ecosystems will develop – hybrid lifestyle malls, carefully sculpted high street ‘villages’ etc – where landlords, councils and local businesses work together to build and market locations as a total destination.

My favourite example of this, which already exists, is ‘Chelsea in Bloom’ in London. Every year 80 local retailers and restaurants create the most amazing floral blooms during the week of the Chelsea Flower Show. Thousands of people travel to the area to visit the show and admire the displays. This is a great way of driving footfall and dwelltime to an area that otherwise wouldn’t get it.

In a world where we cannot touch and try product in the same way, then clearly retail is not going to look the same as pre-Covid

What will be the biggest problem or weakness that the physical store have to deal with?

The future is particularly uncertain for fast fashion, pre-covid success stories, such as Primark, ehivh has no online presence. They have been losing £650 million worth of sales per month during lockdown. Their strategy of huge retail flagships packed with tactile experiences (disney and street food restaurants, nail bars, barbers and coffee bars) driven by crowds of customers queueing to get in and to try clothes on, now looks very different in a social distancing world – in spite of the queues we have seen when their stores reopened in places like Berlin!

This is a pity because this type of retail may die through no ‘fault’ of its own – online for Primark may just never be possible given its business model.

In the near term future, any physical store that depends on high customer volumes and has no online presence, is seriously at risk with both social distancing measures and any downtown in the economy. Any brand that is not incredibly competitive on price in the circumstances will probably not survive.

In the near term future, any physical store that depends on high customer volumes and has no online presence, is seriously at risk

What role will technology play? How can the post-Covid retailer help?

From a technology standpoint, the mobile phone will become increasingly important as a way of connecting customers and brands. From the ‘magic‘ check out free shopping technology of Amazon go, which is now becoming scaled to full-size supermarkets, to simple contactless payment and digital loyalty, retail is increasingly going to be phasing out labour and contact-intensive check out and counters.

We will also see the rise of augmented reality as a way of connecting the digital and physical for enhanced storytelling and brand entertainment. Samsung and Hipanda in Toyko, have both done some great examples of amazing interactive augmented experiences in retail spaces.

Post Covid, no new brand will exist without a truly symbiotic online and off-line structure. Post Covid will probably be the birth of a host of new digital native brands that reinvent the physical space in new and interesting ways and treat their stores as media spaces. Neighbourhood Goods is a really interesting example of a possible future Department store model, which combines curated pop up physical retail with a dedicated storytelling and shopping app, which customers can use to order, browse and pay, either in store or at home. An independent business, which launched in Plano Texas last year, Neighborhood Goods has already expanded to a second location, in New York’s cool meatpacking district.

Online powered personal shopping is also likely to thrive. Matches Fashion already have their 5 Carlos Place flagship in London, which offers brand events and exhibitions, and personal shopping in dedicated fitting rooms, all powered by online and broadcast globally.

Department store chain Nordstrom have the same omnichannel approach with their trunk club online personal shopping service, which features in their new Nordstrom Local small store format. These locations offer curbside pick up, online returns, in-store tailors and personal shopping appointments.

The mobile phone will become increasingly important as a way of connecting customers and brands

How will customer loyalty be achieved?

Retailers need to rethink what customer loyalty really means in the future. It’s not about collecting points on cards in your wallet or sending tokens through the post. True customer loyalty will be a two-way relationship with responsibilities, benefits and rewards for both customer and brand. The mechanism of loyalty, except for the smallest independent stores, who should do something much more personal real and authentic, should be digital global and seamless. Nike give the best example of this with their Nike+ app which you can use anywhere around the world online or off-line.

Are you optimistic about the future of retail?

Retail isn’t going anywhere! Nor our bars restaurants or cinemas. Society and community are what make life worth living!

I think Covid is going to be even more of a shock to the system than the 2008 global financial crisis. Unfortunately just like then, many businesses won’t survive – The entire global Department store sector for example is teetering on the edge of catastrophe and this may be the end of that particular business model except for a few very select examples. This crisis will certainly kill off many ‘zombie’ retailers and zombie malls – who probably should have gone years ago.

There is a real opportunity to surprise and delight with amazing, exhibition-style visual displays, which customers can’t touch but still look amazing and inspiring!

However we are also going to see a huge amount of innovation coming out of all of this. I’m particularly optimistic about the future of visual merchandising, which has taken a battering over the past few years.

In a post Covid world, customers will not be able to touch product in the same way. They may have to queue longer to get into stores, and to follow a race track path through stores when they are in. This means there is a real opportunity to surprise and delight with amazing, exhibition-style visual displays, which customers can’t touch but still look amazing and inspiring! Stores will have to do better visual storytelling, curation and eventing which can become media for the brand and even broadcast globally.

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