|
The hey-dey of innovation —with the endless development
of new and different category killers has ended. E-commerce
has definitely brought a significant steam of new ideas, and
multi-channel retailing is a business imperative. Brick and
mortar retail innovation still remains plentiful enough, driven
by powerful consumers, competitive and economic trends. Consider
the following 10 retail format innovation trends. We think
these will form the basis for today’s and tomorrow’s
hot ideas:
Retailers continue to push the brand boundaries—moving
up or down in age; up or down in income; or sizing. There
is great success in brand extensions.
Catalog and direct retailers are increasingly successful in
moving their brands into the retail space. Examples include
companies like Coldwater Creek, Harry and David and multiple
examples from Williams-Sonoma.
We are indeed becoming a global marketplace with emerging global
brands. Highly successful retailers like Ikea, Zara and H&M
are creating global brand footprints.
Brands are increasingly developing direct relationships wit
the consumer. While this was once the purview of luxury brands
(see above), brands of all shapes and sizes are increasingly
dependant on direct channels to reach the consumer. We are seeing
this in every conceivable retactor, from apparel to electronics
to toys.
As the consumer becomes less homogenous, so is retail. Formats are being created among more narrowly defined age bands-older, younger, and in-between. Lifestyle formats that create more compelling offers around a more defined point of view (and away from traditional category segmentation) are taking hold.
As the consumer becomes less homogenous, so is retail. Formats
are being created among more narrowly defined age bands—older,
younger, and in-between. Lifestyle formats that create more
compelling offers around a more defined point of view (and away
from traditional category segmentation) are taking hold.
With the explosion
of the ethnic population, ethnic-specific formats are proliferating;
ethnicity is playing a role in tailoring existing formats.
Income
polarization is helping define format opportunities for upscale
(haves) and downscale (have-not) consumers.
Sustainable businesses are being launched and developed through
innovative alternative channels. Consumer direct party retailers
and infomercials are both ways to reach the consumer without
the expense of brick and mortar.
Convenience retailing, site specific retailing (airports, hospitals,
tourist locations) help retailers intercept customers.
New
retail may not be about goods at all. New formats are being
developed with defined and compelling service propositions,
like helping customers prepare meals or take care of their health
and beauty concerns.
- As is the case
with any good idea, they are often propelled by multiple
trends. Our hot model suggests the bulls-eye for a new idea
lies in the intersection of consumer demand, internal competencies
and competitive differentiation. And, of course, sustainable
economic viability.
-
If the trend has any power, it is quickly recognized (or
copied) among multiple fronts. The variations usually result
in few dominant players as the formats sort themselves out.
Click here to learn more about McMillan/Doolittle
During his career at McMillan|Doolittle, Neil has developed strategies and new concepts for a diverse variety of clients across the retail industry. Along with his consulting work, Neil is also recognized as a key thought leader in the retail arena. He is editor of McMillan|Doolittle's Retail Watch newsletter, which is widely regarded as the premier publication on new concepts and trends. Neil is frequently quoted in major business publications and has been often featured in the national media.
|
Ten Drivers of Retail Format Innovation... continued 
