Monday 14 August 2017
‘Blurring’, the mixing of functions and offerings, is both a major threat and a huge opportunity for traditional retail. Ikea sells food, Sissy-Boy has a cafe and even Dutch discount chain Action has a food range. You can also see functions mixing within the food and non-food sectors as well, such as a post office in a book store, or a cafe in a supermarket. And these lines will only continue to blur.
Blurring is booming! The result is that the appearance of the retail sector will have changed completely by 2020. Our minds quickly turn to classic examples: a coffee in a bookstore, or a beer at the record shop. But blurring goes much further - it often already has a more important place in the retail landscape than we realise. Food service in supermarkets is an example of blurring, a combination of hospitality and retail elements. Perfume or phone cases in a clothing store, buying coffee beans from the barista - all blurring.
A role reversal
Increasingly, the customer thinks less in terms of channels and formats, and instead bases their reasoning more on need. Aided by digital technology, consumers are rapidly reversing roles in the chain. While scrolling on their iPhones, they choose the provider making them the best offer at that time and place. Brands develop into lifestyle ambassadors and the physical store is given a new role. Take Zara, for example, which sells not only clothing, but also home products and accessories. This lifestyle approach suits a constantly expanding range of products, and brands understand that, in addition to non-food, food is also an increasingly important part of our lifestyle.
Food is the new fashion
The blurring of non-food and food didn't just appear out of thin air: food is part of our identity now more than ever. Younger generations in particular underline their lifestyle through their relationship with food. This means that what they consume, and where and how they consume it may vary from day to day, and even from moment to moment. You are what you eat and #powerfood, #yummy, #foodporn and #whatsfordinner are all trending. It’s therefore not so strange that more and more fashion and lifestyle concepts are embracing food.
The combination of food and non-food is nothing new. In the United States, larger shopping centres have long known that a food court results in more customers who, on average, stay longer and spend more. Blurring offers opportunities to transform retail locations into destination points. Good food and beverage options create a meeting place, a friendly and dynamic environment that enhances the experience. This results in a longer stay, more traffic and higher customer appreciation.
Competition from two sides
But as more and more brands and stores start to offer food, supermarkets, as well as the traditional food service sector, are losing their ‘share of stomach’. Competition is not only coming from the blurring of non-food entrepreneurs, also farmers’ markets, food halls and food trucks are popping up like mushrooms. These concepts are very popular with their inspiring range and fresh on-site preparation.
Traditional retailers therefore have to innovate if they don’t want to lose even more of the consumer’s ‘stomach share’. As things stand, today consumers buy more than half of their food and drink from somewhere other than traditional supermarkets.
The innovative retailer is the winning retailer
Blurring and function-mixing pose a threat, but also an opportunity! After all, blurring creates many new favourable circumstances. The old definitions of what a concept is, and should be, are breaking down. What can retailers do? First of all, they need to step even further into the shoes of the customer. What are his or her specific needs? Is it routine, convenience or enjoyment? And at what moments? At home, on the road or on location? Consumers are increasingly making choices based on changing needs. They don’t think in terms of traditional channels, but rather, ‘Who has the most suitable offering for me?' In doing so, customers don’t examine the core range of the concept. The choice is determined by brand loyalty, or if the brand offers the correct solution or experience at the right time.
The party that offers the most added value in the chain through its understanding of the consumer wins. Who those parties are mainly depends on their ability to innovate and renew. The creative input and vision of retail designers is essential to this aspect. Developing a concept is one thing; designing it so that the story behind it is clear and accessible, and meets the high expectations of today's customers, is another.
JosDeVries The Retail Company BV
3605 MA Maarssen, P.O. Box 1194
NL-3600 BD Maarssen
tel. : +31(0)346 - 563764
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