Backslash, the cultural intelligence unit of TBWA – The Disruption Company -, has published its report on the future of retail , in which it leverages the knowledge and experience of its global network of cultural “trackers” to discover opportunities for disruptive growth in the retail sector.
Accelerated by the global pandemic, the e-commerce revolution is about to explode: Nasdaq predicts that 95% of purchases will be made through e-commerce by 2040 . In fact, a study carried out by Astound Commerce estimates a 24% growth in ecommerce in Spain for this year 2021 .
However, 71% of consumers say they still prefer to shop in physical stores (source: ATKearney), so total eradication of retail in real life may not be the answer. Jesús Fuertes, Vice President of Strategy and Innovation at TBWAEspaña , points out: “The truth is that nothing will ever be the same again.
Post-pandemic consumption habits are different and it is time to reset, be fast and get ahead in Spain to a new chapter. Thanks to this intensive analysis, we have identified and unlocked 4 disruptive growth opportunities that target emerging sources of demand. ” “In addition, instead of avoiding the great difficulties, with this analysis we approach them head-on, offering a strategy to advance in line with the direction of culture,” he adds.
The new challenges to adapt to
To identify the trends and opportunities that will shape the future of retail, TBWA’s analysis looks at the challenges that the sector is currently facing, marked in large part by new post-pandemic habits. They are as follows:
- Consumers, increasingly aware of climate change and environmental issues, are demanding more transparency in the supply chain.
- The appearance of Direct to Consumer (D2C) brands – direct sales to the final consumer through online channels such as social networks – is driving them away from large stores.
- The growing number of existing shopping platforms increasingly complicates the brand-consumer relationship.
- The growing demand for products through online sales is forcing retail to digitally transform.
Thus, it is based on these challenges that four opportunities for disruptive growth in retail are revealed, describing concrete ways in which brands can act. Each of these four trends and opportunities respond to 4 questions posed around how to face these challenges.
How will the shift to ecommerce redefine and give new meaning to the role of physical stores?
A new age of retail requires physical spaces that serve more than just shopping. The stores of the future will revitalize cities, boost local communities and promote circularity, as the fast-paced model has its days numbered in this new context.
Some examples of brands that already offer consumers unusual experiences in their spaces are, for example, the seasonal pop-up stores that luxury brands carry out in exclusive tourist spots such as Ibiza or Marbella; commercial “anticentros” that offer experiences out of the ordinary in their spaces, such as X-Madrid; or spaces that are decoration shops, restaurants and gardens such as Salvador Bachiller. In addition to these experiential stores, it will be important that the physical store of the future is part of the solution to the environmental problem.
As the throwaway culture comes to an end, physical spaces will be transformed into centers of sustainability. Outside the Spanish market, brands like Adidas are already giving life to this model with vending machines that accept old plastic bottles in exchange for discounts; or H&M, which has designed the Looop machine, the world’s first in-store recycling system that turns old garments into new ones.
To what extent should technology be part of the shopping experience?
The pandemic has accelerated the adoption of digital media, causing up to 45% to buy more online than before (according to articles by Google and Deloitte). Consumers choose this type of purchase to avoid going to physical establishments and because they enjoy searching the internet more.
However, according to the report, the adoption of technology in retail can be applied in multiple ways to provide a seamless and seamless shopping experience. Examples of this in Spain are BitcoinPyme, a startup through which cars can be purchased with cryptocurrencies; the smart and unmanned Ghop supermarkets, which will arrive in Spain soon; or the implementation of augmented reality in large stores such as Ikea – where you can see the final result of the products in a certain space – or Sephora, which also has applications where you can virtually test the products in real time.
How to take advantage and take advantage of ecommerce?
To survive an increasingly participatory and community trade, brands will have to turn all the members of their network into protagonists and take into account the purchasing preferences of their increasingly socialized consumers. In this sense, one of the most significant trends shows that the largest and most convenient retailers are no longer the most obvious option in favor of the uniqueness offered by sites such as Vinted, Wallapop or Instagram Shopping.
Thus, it is more important than ever to remain connected to consumers through Social Commerce, since 45% of Spanish users recognize that social networks have influenced them when purchasing a product or service, being one more channel purchase for 21% of them.
Likewise, the TBWA analysis also reveals that the post-influence era is beginning to be felt in society, as another type of “influencers” begins to gain relevance: influencers who are opinion leaders and expert voices in their fields. Brands should take into account these new educator influencers to promote their brand among an audience that seeks to know more and better.
What factors will define the new luxury?
The new luxury will be based on trends in sustainability and awareness, which will put the life cycles of products in the spotlight. Looking to the future, first class eco-materials, authenticity trackers, hand-made products that unite fashion and crafts (a very popular concept in Spain) and functionality coupled with durability will define the new premium. According to a study by OCU and NESI, 73% of Spaniards already value ethical and sustainability-related aspects in their purchase decision.
It is urgent to adapt to this trend, since 50% of Spaniards admit to having abandoned or boycotted a brand after a scandal or wave of negative news, of which 41% affirm that they are definitive ruptures. There are already several brands in Spain that have adopted this new conception of “luxurious”, such as Adolfo Domínguez, who under the slogan “Be older”, the brand reaffirms its commitment to the quality of the durable versus the ephemeral of the fast fashion.