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Get Retail Smart - High velocity retail

Ascential’s World Retail Congress 2019 was themed ‘High Velocity Retail,’ and explored how legacy retailers can future-proof.

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Get Retail Smart - High velocity retail

  1. 1. GET RETAIL SMART High Velocity Retail
  2. 2. GET RETAIL SMART High Velocity Retail Ascential’s World Retail Congress 2019 was themed ‘High Velocity Retail’ to reflect ‘what successful retail is today – it’s all about speed and dynamism’.1 Based around the insight that 75% of retailers believe their model needs to fundamentally change to keep up with the pace of evolution in the industry, the Congress explored how speed, in conjunction with direction, will help retailers forge their futures.2 Speed and direction are crucial for retailers in the current category and consumer context, which is largely shaped by developing technologies: the rise of disruptive, direct-to- consumer brands thanks to 3P marketplaces and digital marketing; social commerce; an upcoming mobile-first generation; and an increasingly mobile, urban population. Indeed, Andrew Cosgrove, Global Consumer Knowledge Leader & Lead Analyst at Ernst & Young comments: “There’s never been a better time to shop as a consumer… as a retailer, maybe there’s never been a harder time, except for the fact that tomorrow it gets even harder because the speed of change is accelerating.”3 Due to this rapid pace of change it’s easy for retailers to get hung up on what their competitors are doing, which as Healey Cypher, CEO of retail technology company Zivelo notes, is not constructive: “The winners will be those who come at it with a mindset of possibilities and think past what’s happening today.”4 In their High Velocity Report, World Retail Congress concluded six principles for legacy retailers to embrace possibilities, and in doing so, to future-proof themselves: BE THE BEST AT SOMETHING THAT MATTERS Having a thought-through, strategic positioning is fundamental. Ascential finds that: ‘When we look at the retailers that are most highly rated by consumers globally (as measured in the OC&C proposition index) – the highest overall ratings are increasingly given to retailers that have distinctive strategic positions.’5 1 Agenda. World Retail Congress. May 2019. Link 2 High Velocity Report. May 2019. Link 3 World Retail Congress Hack. May 2019. Link 4 World Retail Congress - Healey Cypher interview on High Velocity Retail. May 2019. Link 5 High Velocity Report. May 2019. Link
  3. 3. GET RETAIL SMART High Velocity Retail Retailers need to make a conscious choice as to which fronts they’re competing on, who they’re engaging with, and why those consumers are going to love what they’re doing. CHOOSING WHERE TO FOLLOW IS AS IMPORTANT AS CHOOSING WHERE TO LEAD It is impossible to try and compete with the biggest retail players when it comes to investment: retailers must choose where it is worth leading, and where it is worth following; and prioritise based on their proposition. IF YOU’RE NOT A WINNING MODEL, YOU’RE A LOSING MODEL Based on their analysis of the world’s leading 800 retailers, Ascential identified four archetypes for success: Value Champions; Customer Solutions Model; Retailer as a Brand; and Platform Model. Value Champions, for example Aldi, ‘are still able to leverage operational scale and vertical integration to create a value drive customer proposition’ and need to develop an ‘‘end consumer’ mind-set to create even greater opportunities to leverage their scale.’6 Customer Solutions Model, for example Selfridges, who ‘will need to shift the conversation with their customers towards delivering outcomes rather than purely delivering product’.7 Retailer as a Brand, for example Lululemon, which are product led and must be distinctive and customer-centric: ‘authenticity and connection to customers is critical.’8 Platform Model, for example Farfetch, which uses subscription as a tool ‘which effectively creates lock-in and ensures consumers do not have to be re-acquired on each individual transaction.’9 Retailers need to identify which of these models they most closely align with and make changes accordingly. 6 High Velocity Report. May 2019. Link 7 As above. 8 As above. 9 As above.
  4. 4. GET RETAIL SMART High Velocity Retail BUILD YOUR RETAIL ECOSYSTEM Regardless of their model, retailers need to partner where necessary to further their proposition and should shift ‘from a value chain mind-set’ to viewing their proposition ‘as a set of interconnecting layers’; and consider how they can leverage value across multiple capabilities.10 BE FEARLESS AND SET YOUR TEAM FREE Retailers must give their teams objectives which they can influence: employees must be stakeholders; they need to be able to operate efficiently and be motivated to do so. GO BEYOND BORDERS TO BUILD YOUR TRIBE Retailers need to consider how they can expand in local markets, without compromising the shopping experience. This means knowing how to resonate with international shoppers and building out fulfilment capabilities abroad. Ascential’s High Velocity Retail report illustrates how future-proofing can be achieved by simply honing in on and developing your unique proposition and skillsets as a business. To read the report in full please follow this link: https://www.worldretailcongress.com/__media/files/Congress- content/HighVelocityReport-DPS-compressed_FINAL-digital.pdf 10 As above.
  5. 5. GET RETAIL SMART High Velocity Retail If you are interested in learning more about the subject of this article, please contact Sophie Meadows, Insights Manager, meadowss@bbdoknows.com ABOUT BBDO KNOWS BBDO KNOWS is a planning resource for the BBDO network. BBDO KNOWS offers thinking, strategy, insights and inspiration on key categories, key themes and consumer segments. If you are interested in learning more about the way BBDO thinks please contact Melanie Norris, Global Planning Director, norrism@bbdoknows.com. DISCLAIMER The information and materials in this article are for general information purposes only. Whilst we try to ensure that all information and data in this article is accurate, complete and up to date, this article should not be relied upon and you should seek advice if you intend to use or rely upon any of the insights or data contained in this article. This article must not be shared, downloaded, copied or distributed for commercial purposes without the prior approval of BBDO. © BBDO 2019 All rights reserved.