Underscored by the economic recession and the prominence of the web, people began to educate themselves on product traits, brand identity and, most importantly, price comparisons. The web was used as a tool to ensure a customer was getting the best price on an item they desired. The problem this posed for brands, of course, was that strictly online retailers often had the ability to offer lower price points, as there was less overhead involved in their businesses. Customers would see, touch and feel the product in the store and then purchase elsewhere online.

And the numbers only underscore this shift.

Research shows the number one reason for showrooming is price (72% of consumers engage in showrooming because the price was better online).

In particular, the fashion apparel and accessories category has an audience share of a whopping 43% of customers who purchase online after showrooming. This category is second only to consumer electronics (which comes in at 63%). On the other end of the spectrum, jewelery and watches carry a 16% showrooming statistic. (Source: Statista)

Recently,we’ve seen select retailers implement tactics in an attempt to combat showrooming. For example, Vera Wang instituted a “fitting fee” in their Shanghai bridal boutique (which was recently revoked due to customer backlash). Separately, the store within a store concept allows retailers like Best Buy, Bloomingdale’s, ABC Carpet, and JCPenney to profit from their real estate alone, and works as a proposed solution to the losses faced due to showrooming.

But the future of showrooming is not just about price comparison. The shift in consumer behavior is currently evolving to a state where they not only seek value, but also a novel brand and product experience in-store.

Take Warby Parker for example, whose initial business was initiated online, with a dedicated ecommerce platform to convey the brand story and sell product. The company then created a showroom within their corporate offices and made it open to the public on the weekends. Customers would stop by, try on frames and place their orders online while in-store. More recently, Warby Parker had a dedicated pop-up storefront they called the Warby Parker Annex, which hosted ongoing in-store events like “farm-fresh snacks”, mimosas at brunch time, beer pong and live music, and today they boast a new retail storefront on Greene Street.  The consumer that was first on the hunt for a good deal online (affordable, stylish frames), now has the ability to experience the product and the brand in a brick and mortar environment.

This shift requires that brands and retailers revise their digital and retail strategies in order to find ways to embrace consumer behavior, rather than fight against it.

Here are four key considerations when pivoting your retail strategy:

1. Find appropriate ways to leverage technology in the brick and mortar storefront to deliver added convenience and a novel shopping experience

2. Reward consumers with a distinctive product and a special degree of customer service in-store

3. Link the store experience through to the online experience in seamless, convenient and engaging ways (This applies to merchandising, content, promotions, etc)

4. Give your sales associates instant access to the information and inventory your customers are exposed to online elsewhere

This will be covered in tactical detail in the power session titled “How to Leverage Technology in the Retail Environment” on May 22nd in New York City.

Photo credits: Stone

This wave of “one-foot-in-the-door” luxury brands is cutting through the noise and pushing boundaries—not just of what it means to be a “brand” in this category adjacent to luxury, but also of how to create a “share-and-repeat” worthy experience. It’s clear that this category of brands is disrupting the way millennials think about luxury… but how?

A high degree of product quality is a given, but the true standout factor is that these brand platforms echo millennial generation values—what we want from the brands we “like”.

1. Digital Brands for a Connected Generation: This category has upended the traditional brand model entirely—goodbye brick and mortar, courting buyers, building a reputation through advertising, sharing space in high-end department store lookbooks, and so on. It’s not so much that digital is a key component of this sort of brand—digital IS the brand. Of course, there are other, slightly older, brands that have grown up digital—take Gilt Group or Fab, for example, and what’s intriguing about these in particular is that they’re now taking advantage of, or resorting to, traditional mediums (e.g. TV ads). In the case of Gilt, their commercials still catch me a little off guard. It’s as if it’s hard to make the connection between the brand I check daily on my iPad, and the clothes parading across my television. I do feel as though these digital brands are bound to and ought to take the next step—but the transition is new and a little unfamiliar right now, to brands and consumers alike.

2. Responsive by Design: When it comes to forging a connection with a generation that’s unafraid to experiment with technology (let’s be honest, you switched on your new iPhone to figure it out, while your parents went searching for the manual hidden deep in the box), this category has knocked it out of the park. Free of traditional retail restrictions, these brands are listening to their loyalists, and responding. And it’s not with a Facebook post or an Instagram feed. Indochino hosts travelling tailor events, Everlane is opening a pop-up shop in Canada for it’s vocal followers, and the list goes on. There’s undeniably an element of connection and social share-ability that even the best-trained team of brand ambassadors would find hard to recreate.

3. Concise Storyline: We’re busy and constantly connected—brands need to cut through the noise, offer something different and better, stand for something and tell that story clearly and concisely. This category of brands doesn’t have a long history to stand on, so they need to hook their loyalists through honesty and a personality that resonates with a generation always looking for the opportunity to share. It seems that transparency + worthy product + value proposition + a cohesive digital and social experience = success. On the note of transparency, millennials don’t really care that these brands may not be as uninterested in profit as they claim, because they offer us a package we want, and a brand mission we identify with.

4. Curated Content: In this marketing/branding world, we all know the immense value attached to content marketing—it’s the golden goose of every company out there, and it’s no surprise to millennials that it’s caught on like wildfire. We live public lives, sometimes in parallel to our private lives; sometimes altogether different. Point being, millennials are in the habit of curating their public presence for the online world, and expect brands to do the same. It’s not just about blogging about happenings, it’s about pulling in outside content and offering it up in a curated and thoughtful manner—these brands let their personalities show in a personal way, and their loyalists can’t get enough.

So, that’s ‘one-foot-in-the-door’ luxury in a nutshell. It’s not about a luxury price tag; it’s all about a considered experience. These brands are like a custom made suit for an entire generation—and I expect they will grow and adapt to be just as enduring mainstays in our consumer culture.

Kristen Dillman is the resident millennial at The O Group, a boutique luxury branding agency in New York City. You can follow her on The O Group blog.

Photo Credits: Lifesize

Mobile experiences have dramatically changed consumer expectations over the last 5 years (believe or not, the iPad turned three years old last month!). People have grown accustomed to the personalization and accessibility enabled by portable consumer technologies like smartphones and tablets, which have blurred the lines between digital and physical. With the rate of change in technology, we can only imagine what the next 5 years will hold.

At Control Group, our clients come to us because they want to connect and keep up with their customers across the complex ecosystem of digital and physical touchpoints by leveraging technology in thoughtful and creative ways.

Over the last few years we’ve seen retailers redefine their use of in-store technology, and we’ve had many opportunities to help companies solve challenges ranging from omni-channel integration, showrooming, and leveraging shopper analytics to better understand customer behavior and inform business decisions.

Our conversations with our retail clients often share similar themes that permeate the conversations about technology across other industries as well. Mainly, that investment in technology can be risky, stakeholders are being challenged to do more with less, and yet they are being held accountable to deliver demonstrable value.

Here are some lessons we’ve learned that have enabled us to help our clients make the most of smaller budgets, while minimizing risk, and still accomplishing something larger.

1. Although it’s less sexy than a gorgeous UI or immersive UX, investing in stable, well-architected infrastructure that maintains uptime and performance is often an overlooked aspect of successful digital retail solutions. Beautiful design is inconsequential to a customer if she gets frustrated from a slow or broken experience.

Disruptors like Amazon Web Services (AWS) and other Cloud providers have changed the way that supporting infrastructure can be designed, tested, and deployed. With well-designed Cloud systems supporting in-store digital touchpoints, brands can avoid investing in server hardware, reduce IT overhead, and gain a ton of flexibility. With Cloud-backed solutions, deployment can be as easy as store managers connecting iPads to wifi, and custom apps can automatically configure and update themselves.

2. Avoid the pitfalls of digital “trophyware” where technology becomes a veneer that can result in novelty, not clarity. iPads are great, but how many stores in NYC have a few iPads around, housed in beautiful acrylic cases that are gathering dust? (I visited three stores last weekend in SoHo alone with unfortunate iPad graveyards on display…). Technology should aid the shopping experience, or provide new ways for shoppers to create emotional connections to the brand and products.

3. We’ve seen a sea change in the last few years with the “consumerization of IT” — and consumer electronics are increasingly relevant and usable for commercial digital solutions. iPads, touch-enabled displays, inexpensive sensors and cameras can all be leveraged to support agile platforms in-store.

It’s this agility that is key to retail innovation. Retailers should invest in platforms that enable incremental innovation and experimentation, and reduce risk. Define a minimum viable product and get it out there. Watch. Learn. Don’t assume you know more about your customers than they know about themselves. Leveraging Web-like analytics in the physical store space can provide insight into shopper behavior, foot traffic pathing, product lift, and navigation through an app at a digital kiosk. With a flexible digital platform and good data, designing A/B versions of an experience can provide super informative and sometimes unexpected insight into shopper behavior. These learnings can inform decision making on changes, new features, and a product roadmap.

Control Group has been successful using these lessons in a few recent notable retail and luxury technology projects:

For Delta Airlines and OTG, we built a platform that has enabled them to transform their gate areas from unremarkable waiting rooms into relaxing and engaging points-of-sale. We started with a clearly defined business problem – how could OTG expand their footprint to reach more travelers and provide valuable services at the same time?

After visiting the airport and observing travelers, the solution took shape as an iteration on their existing iPad pilot, and incorporated additional technologies and services aimed at providing a relaxing experience for travelers. We worked with Delta to incorporate live flight data, and integrated with a point-of-sale system to enable purchasing of food directly from the iPads. We designed, built, and implemented an extensive interactive experience that helped them extend the reach of their award-winning restaurants at LaGuardia, JFK, Minneapolis-Saint Paul, and Toronto airports and realize sales per passenger that are double the national average.

For Kate Spade New York, we worked with the brand to create a re-imagined retail environment for the launch of their new brand, Saturday. To engage the always-connected millennial shoppers, we replaced traditional printed in-store signage with an iPad-based digital platform that engages shoppers with fun suggestions and product information. The platform allows Saturday’s marketing department in NYC to distribute consistent, branded content globally, while allowing local employees to make nuanced changes based on real-time insights. The combination of print cost savings, local and real-time flexibility, and global branding control add up to an industry-leading signage innovation.

I’ve been in technology for 15 years, and I’ve never seen an industry positioned to be so redefined by tech in the way that retail will be. I’ll be participating in the Fashion’s Collective conversation series on May 15th, and I’m looking forward to chatting further about what retailers and luxury marketers are seeing from their perspectives.

Photo credits: tc397, e+ collection

Paging through the book the next day, we couldn’t help but pay particular attention to the sections on innovation. Especially interesting is the statistic announced first by Babson College stating, “Over 40 percent of the companies that were at the the top of the Fortune 500 in 2000 were no longer there in 2010.”

This is a startling statistic, underscored by the list of corporate casualties mentioned in the following page (which includes Blockbuster, Pontiac and Kodak).

When it comes to business longevity, we tend to think about the brand image remaining relevant, and for good reason. We have previously published an article, Differentiating Your Brand in the Digital World, here on Fashion’s Collective, but what Solis underscores in his book is that businesses today should not, and cannot, operate from a position of complacency. Even after achieving high growth rates, soaring profitability, kind attention from the media, and strong brand loyalty, the problem is that most successful brands then rely on the formula that made them successful as the driver and catalyst for all operations going forward. While this may be a safe and proven approach, doing so without also keeping an eye on new practices can be detrimental. Ultimately, this narrowed focus is what allows a competitor to enter the market with an evolved or different approach and capture a piece of your audience. In short, complacency can be a business killer.

The importance of innovation is not simply in looking toward product improvements or evolving the brand story. Innovation can also come from monitoring, recognizing and forecasting shifts in consumer behavior (and where potential pain points lie), as well as shifts in new business models. Take showrooming for example, which is both a trend in consumer behavior as well as a trend in new business models (see our recent interview with Warby Parker founder, Dave Gilboa). If the larger and more established luxury brands choose to rest on their laurels and close themselves off to this new shift, there will be a certain loss to the business by way of product sales and brand affinity. In addition, the shift in workplace environment these new business models create has the potential to capture the interest of top young talent, and as a result steering them away from established brands which can be seen as more “corporate” (now a term that carries a more negative connotation in the workforce).

But, of course, innovation for the sake of innovation is not the answer, just as using the newest technology doesn’t automatically make you relevant. Rather, it is the companies that operate from a place of openness, ingenuity and savvy that carve out a place above and beyond the competition.

When we chart a customer’s path today, it’s an amorphous journey across multiple touch points and destinations that is no longer linear. We cannot predict whether an instance of a customer’s journey today starts online or in-store, and there is no sure-fire way to measure this path across all touch points and platforms, delivering a cohesive personalized experience,  though many are starting to come close.

While technology now has the ability to empower businesses to be hyper-aware of their consumer’s behavior, their inventory, product and their brand experience, the flip side is that, when not leveraged properly, technology has the equal power to create fragmented experiences that are disconnected, disappointing and frustrating.

Just as we’re seeing exciting advances in the industry (the new kate spade Saturday store in Tokyo, for example), we are also seeing pain points and pitfalls (the adidas virtual inventory wall in SoHo).

Bringing digital in-store can take many forms and purposes, it’s critical for brands and businesses to think creatively, strategically and logistically about exactly how to leverage technology in-store. The reality is that this is not a one time investment of intelligence, finances or time. Just as technology evolves, the retail environment is alive and active, and it is constantly giving us clues to how technology can be adapted to enhance the customer’s behavior.

We’re excited to announce today that our focus this month will be exactly on this. On May 15th we will be hosting an intimate conversation series featuring Control Group, the innovation, technology, and design company responsible for the launch of technology within the kate spade Saturday store. We’ll then be following up with a tactical workshop  on May 22nd that is a must attend for any brands or businesses looking to evolve or initiate the use of technology in-store.

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