Generous Brands
Serious Business of Play
Joy of Shopping
GenZ
Retail’s New Reality
Experience Signatures
Must Sees
Quarterly trend reports
Kantar Retail/PWC Retail 2020
Where we got our thinking:

#FITCHRetail2020
@FITCHdesign
@cdaviesFITCH
Join the discussion

Retail will change more in the
next 5 years than the last 50

The fundamentals of what a store
“is” (its purpose and its function)
are in flux.

This change is not just driven by
economic, product or industry
trends (although they remain an influence).

Rather, tomorrow’s store is being
shaped by new behaviors, needs
and demands of shoppers.

In 5 short years…X Y Z

By 2020, Xers will be enjoying
the fruits of the peak-earnings
decade of their careers.

While quietly freaking out about
their ill-planned retirement.

By 2020, Millennials will no longer
be the kids in your store.

In fact, they are more
likely to be shopping
for their kids.

Retail today is “under-delivering
against millenials’ expectations.”
Source:
Accenture
Millenial
Outlook,
2013

The brands thriving in 2020 will
clearly have solved this challenge.
Happy Millennial

Because lack of engagement with
a group this big is not optional
Net effect of
bored Millennials

GenZ will be the newbies, but
collectively they are retail’s future.

By 2020, they will be the largest
group of shoppers worldwide.

And their behaviors will represent
our collective norm.

FITCH describes GenZ as
“shopping in a constant state of
partial attention”.
Source:
FITCH
Gen
Z
Future
of
Shopping
Report,
2014

Success at retail in 2020 will only
be achieved by embracing this
somewhat challenging idea.

So, what will this world look like?
We see 6 trends for retail’s future

1Retail’s role in society will
change significantly by 2020.

On every level:
Macro Micro
Global and societal issues Local and community issues

Both millenials and GenZ believe
strongly in the importance of
good citizenship.
78%
would
recommend
a
company
seen
as
such
74%
would
be
proud
to
be
associated
with
it
71%
say
they
would
be
loyal
to
such
a
business.
Source:
MSL
Future
of
Business
Citizenship
Report,
2014

On a Macro level this trend will
influence the products and services
retail brands choose to provide.
Example:
CVS

It will drive the way we present
those products in our stores.
Example:
Original
Unverpackt

And will even lead to decisions
around the types of stores
we decide to build.
Example:
Walgreens

It will push us to continue to
explore how the act of buying
can be a force for good.
Example:
Toms

And to explore the part that retail
can play to truly make a difference

On a Micro level stores won’t just
be located in communities they
will be woven into their fabric.
Example:
CityTarget

”On average, CityTargets generate
double the sales per square foot of
larger Target stores.” Source:
USA
Today,
2015

This is indeed the new Seattle, the
post-WaMu Seattle. Here, on Second
and Union, you have the feeling that
downtown is beginning to rise.
The Seattle Stranger, August 2012
Example:
CityTarget

“Our stores are integral parts of
the neighborhoods we
are joining”
N e i l
B l u m e nt h a l ,
C o -­‐ C h i e f
E xe c u t i v e ,
Wa r b y
Pa r ke r

IKEA
Hire local
Incentivize employees to ride to work
Employee housing
Promise to improve the site they develop

Generous Brands
Wearing your heart on your sleeve…
In a world where consumers are becoming increasingly aware of
‘mean’ brands it was time to begin researching the concept of
generosity.
Generous brands are those who show more of a heartbeat, take
the first step and display a genuine understanding of their
customer needs.
This is a long way from 2 for 1 deals and bonus points, but rather a
tone of voice and general personality that encourages consumers
to warm to their offer and become advocates.

By 2020…
We believe shoppers will
absolutely want to know what
retailers care about.
How will acting as a “generous
brand” define the future
for stores?

Stores in 2020 will take
many forms.
And ideas like “one size fits
all” will seem archaic.2

“Retailers will have to rethink their
scalable ―one size fits all approach.
Any retail strategy must include a plan
to fit the ever-diverging needs of the
US shopper.”
Source:
Kantar
Retail/PWC
Retailing
2020
Report,
2014

We predict far fewer retail brands
by 2020. But far more variety.

Two trends:
Format Expression
Offering, footprint,
location, operations
Planned variance across
the estate

Starbucks.

2008
Militant consistency
Corporate driven messaging
1 look, 1 format
Mass production of product and service.

2008
8% drop in sales
Stock plummeted more than 50%
1,000+ Corporate layoffs
Shuttered 600 stores

2015
Exploring new formats
Empowering their people
Dialogue with their guests
Passionate commitment to causes

Format Strategy:Drive Through
Express
Urban
Suburban
Premium (Reserve)

Format Strategy: MUJI
5 formats, one city

Format Strategy: Lawsons
Not driven by products, operations
or location, but by people and
niche needs.

Happy Lawson – moms and kids

Lawson Plus – elderly

Natural Lawson – health conscious

Expression Strategy:
“The Catalog”

Operational efficiency across
format types, but everything
else has changed.

What will this combination mean
by 2020?
Format Expression
?

No two alike.

By 2020…
We believe the concept of
“engineered diversity” won’t just
be the norm, it will be mandatory.
The only question will be: what
formats, forms and expressions
make the most sense?

3The ways in which we
speak to shoppers will
shift dramatically.

By 2020, absolute transparency
will be table stakes.

Only 5% of consumers in the
US & UK currently believe big
businesses are being
transparent enough.
Source:
Cohn
&
Wolfe
Oct,
2013

“By 2020, apps will proactively inform a shopper
regarding specific issues with products or retailers upon
entering brick-and-mortar stores or websites.
Managing and manipulating information (rumor control),
will be more of an issue than ever as flash truth reports
are distributed more frequently.
Brand management by 2020 will need to develop a host
of new skills, tools, and communication modes, both
nimble and innovative, than are typical today.”
Source:
Kantar
Retail/PWC
Retailing
2020
Report,
2014

A differentiated voice will be
critically important.

But retail brands will also be
more tight lipped.

everything’s coming up
spring
$50 everyday
liz claiborne handbag
$12 february
women’s gold toe sock 6-pack
$18-$20 everyday
misses’ bisou bisou swimwear
$75 everyday
men’s nike shoes
$17 everyday
juniors’ arizona shirt
$12 february
men’s st. john’s bay polo
$15 february
misses’ made for life jacket
$30 february
twin comforter set
$20 everyday
juniors’ olsenboye blouse
$130 everyday
rachael ray 10-pc. cookware set
$14-$20 everyday
floppy hat or thong sandal
$14 everyday
mixit bracelet
$20-$25 everyday
men’s j. ferrar shirt or tie
$4 everyday
home expressions bath towel
$
everything’s coming up
spring
$50 everyday
liz claiborne handbag
$12 february
women’s gold toe sock 6-pack
$18-$20 everyday
misses’ bisou bisou swimwear
$75 everyday
men’s nike shoes
$17 everyday
juniors’ arizona shirt
$12 february
men’s st. john’s bay polo
$15 february
misses’ made for life jacket
$30 february
twin comforter set
$20 everyday
juniors’ olsenboye blouse
$130 everyday
rachael ray 10-pc. cookware set
$14-$20 everyday
floppy hat or thong sandal
$14 everyday
mixit bracelet
$20-$25 everyday
men’s j. ferrar shirt or tie
$4 everyday
home expressions bath towel
everything’s coming up
spring
$50 everyday
liz claiborne handbag
$12 february
women’s gold toe sock 6-pack
$18-$20 everyday
misses’ bisou bisou swimwear
$75 everyday
men’s nike shoes
$17 everyday
juniors’ arizona shirt
$12 february
men’s st. john’s bay polo
$15 february
misses’ made for life jacket
$30 february
twin comforter set
$20 everyday
juniors’ olsenboye blouse
$130 everyday
rachael ray 10-pc. cookware set
$14-$20 everyday
floppy hat or thong sandal
$14 everyday
mixit bracelet
$20-$25 everyday
men’s j. ferrar shirt or tie
$4 everyday
home expressions bath towel
The good news?
Ours won’t be the loudest, or
most important voice at all.
.

Millenials and GenZ want to
create content, not just absorb it.

And 2020 will be all about
dialogue not broadcast
25%
A d v e r t i s i n g
70%
S t r a n g e r s
w i t h
p ro d u c t
e x p e r i e n c e
90%
F r i e n d s w i t h
p ro d u c t
e x p e r i e n c e
Source:
Edelman
Trust
Barometer,
2014

Find ways to connect with
the crowd.

And then engage it in-store.

Create destinations for
conversations.
Example:
TopShop
Chirp
Garden,
2014

Stop worrying about controlling
the message and embrace that it
can be owned by others
Example:
Selfridges
#denimlovers

When you do speak in-store, keep
it simple - Millenials already over-
index on “tuning out noise”.
Example:
Primark

Great visual is a draw for them
because it signals inspiration.
So let the product literally “sing”.
Example:
H&M

And they are apathetic to
marketing. Clutter is a turn-off for
them. So keep it ordered.
Example:
Uniqlo

Finally, whenever you speak, tell
the real stories behind the
product without needless fluff.

Let other people do your bragging.

And did we mention transparency?

“Leading retailers will be classified by
those that are the best
conversationalists, along with
communicating a secure and self-
confident image to their consumers.”
Source:
Kantar
Retail/PWC
Retailing
2020
Report,
2014

By 2020…
How will this manifest itself in
store?
We see a co-authored narrative
delivered with the impact of a tweet,
the interest of a pin, and the emotional
pull of a post.

Seamless will be an
absolute must.4

Consumer Purchase
But while omnichannel implies
Seamless, the reality can be
anything but.

Seamless is so important because
Millenials and Zs don’t think
“clicks vs bricks.”

We believe that by 2020,
Seamless Interactions “Out Of
Store” will be largely resolved

Because the US shopper is
insanely demanding

And this demand will simply…

Demands like:Internet of things
20-30 billion “always on”
interconnected devices by 2020
Source:
Garnett
Research,
2014

Same day FREE home delivery:
No matter who ends up delivering

And concepts like:
Mobile payment:
Which will seem
like second nature
by 2020

Dominant platforms and
conventions around retail out of
store will have evolved and will
be widely embraced and adopted.
Retail brands en-masse will be
adept at managing and
supporting these channels.
But one problem will still exist

#retailfailWhether retail can bridge the
yawning chasm between “Out Of
Store” and “In”

And whether the store can not just
create “continuity”, but truly pay
off and enhance the OOS activity.

It’s been an interesting month…
Remember this?

Example:
Piper
Lime
And this? With all the hype and
the backing, why did they fail?

These concepts had the logistics,
infrastructure and tools in place
and the support of backers with
deep pockets.
We believe they lacked continuity
in their in store experience and
that will need to be our biggest
focus in the future.

By 2020…
What percentage of our in-store
media will be dedicated to
driving “continuity”?
How can we finally make the
physical store enhance our OOS
activities?

5By 2020 the entire concept
of convenience and value
will shift.

Convenience for the new guest
will not be defined in traditional
terms of time and ease.

And certainly not in antiquated
ideas like “one-stop” shopping.

We believe the highest currency
for these new consumers will be
RELEVANCE.

89% of millenials want
personalization when they
visit stores, but only 18% see
it from retailers today.
Source:
Vibes
Marketing
Personalization
Report,
2013

The customer is free interact
with the retailer on their own
terms.
Face to face
Direct/Email
Print
Television
Online
MobileCall Centre
Loyalty
E-commerce
Review
Advice and Support
Search
Social
Bricks and Mortar
Consumer
4
3
1
2
5
1 2
3
Shopper centric path to purchase.
How they want to buy, not how
we want to sell.

A shift from locating products to
locating the best products for me.
Example:
Forever21
-­‐
ClosetSOS,
2014

And using technology to bring a
relevant experience in-store.
Example:
Klepierre
-­‐
Inspiration
Corridor

A new service paradigm – where
the guest is the focus, not the sale
Example:
Bonobos
–
Guideshops

In 2013, the overwhelming reason
shoppers changed brands was
poor customer service (66%). In
almost every case (88%) the
situation could have been saved,
but wasn’t.
Source:
Accenture
Global
Consumer
Pulse
Survey,
Nov
2013

And service empowered by
technology
Example:
Virgin
–
Google
Glass
partnership

Part of personalization will be
the ability to customize/tailor
more and more products.
Example:
Creyate

All, of course, executed in a way
that is wholly seamless.
Example:
Creyate

By 2020…
Imagine a 150,000 square foot
store that treats everyone in it as
an individual.
What will it take to get us there?

Experience will
remain king.6

Foot traffic is down.
N o v / D e c F o o t Tr a ff i c
40 Billion Visits
30
20
10
2010 2011 2012 2013
1 7 . 6 B i l l i o n
Source:
The
Wall
Street
Journal,
2014

The sky is fricking falling.
N o v / D e c F o o t Tr a ff i c
40 Billion Visits
30
20
10
2010 2011 2012 2013
1 7 . 6 B i l l i o n
Source:
The
Wall
Street
Journal,
2015
2014

There are now less than 50% of
the warm bodies in US retail
stores during the biggest
shopping season of the year than
were there 5 years ago.
How many will there be in our
stores 5 years from now?

Only in stores delivering truly
unique experiences do we see
increased visits and footfalls.

And in-store experiences remain
the absolute best way to engage
and connect with shoppers.

The 19-year commercial Web
experiment has shown; you can't hold
attention for very long, can't offer a
point of view, can't control the
experience, and, in a sense, never
own your audience — at best, it's a
fleeting, utility-like relationship.
Source:
Michael
Wolff,
USA
Today,
2013

Stores re-imagined around unique,
defensible branded experiences may
well be the biggest change over the
next 5 years.
And tomorrow’s shopper craves these
experiences.

So, what are we waiting for?

The problem? True “experience stores”
are expensive, complicated and difficult
to scale.

Even when you only have 8 of them

Experience Signatures

An Experience Signature is a distinct
collection of brand led moments,
totally unique in combination from
one brand to the next.

A retailer’s Experience Signature lies
at the heart of why we choose one
store over another.
They are the things retailers become
known for.
They are the reasons we come back
for more.

PEOPLE
PLACES
COMMS
TOOLS
EVENTS
SERVICES
WEB
SOCIAL
GUEST

Today, these moments of connection
are often fractured, and only
sporadically effective

PEOPLE
PLACES
COMMS
TOOLS
E V E N T S
SERVICES WEB
SOCIAL
GUEST

In an Experience Signature the
moments of connection are unified,
and brought into harmony

PEOPLE
PLACES
COMMS
TOOLS EVENTS
SERVICES
WEB
SOCIAL

PEOPLE
PLACES
COMMS
TOOLS EVENTS
SERVICES
WEB
SOCIAL
GUEST

PARITY

DUPLICATION

PEOPLE
PLACES
COMMS
TOOLS EVENTS
SERVICES
WEB
SOCIAL
BRAND

DISTINCTION

DIFFERENTIATION

Only with touchpoints in harmony, and
infused with a brand’s DNA, have we
achieved an Experience Signature

A way to express yourself to the
world that feels intuitively right

And which simply couldn’t be
someone else’s

By 2020…
We believe the brands who are
thriving will be the ones who have
crafted the strongest Experience
Signatures.
And are well on the road to redefining
a bright future for physical stores.

If you’d like to know more…
www.fitch.com
www.slideshare.net/FITCH_design

To finish…BONUS LAS VEGAS
THEMED DISCLAIMER!!!!!

No one can predict the future

And listening to data can be dangerous

1977:170

2000: 80,000

# of Elvis impersonators
Time
1977
RIP Elvis
Plot this data trail to its logical
conclusion…

We believe that by 2043…

So again, no one can predict the future

“But equally no-one can afford to be
unprepared for what does arrive.”
Source:(Wa+s(Wacker,(Futurist(

thanks…
www.fitch.com

FITCH thinks of Seamless as a
palette of touchpoints
Physical: The tangible – from objects that can be touched to
settings that can be experienced
Human: Dynamic interactions – with individuals,
employees and social groups
Digital: Electronic Tools – technologies that talk to
everyone, or just talk to me
P
H
D

Exploring
Purchase intent
in the category
Locating
Specific product
or service
Dreaming
No specific
purchase intent
Being inspired
Learning
Having fun
Browse easily
More information
Narrow choices
Easy to find
Useful reminders
Reassurance

PHD/DEL MATRIX
Physical
Digital
Human
Dreaming Exploring Locating

PHD/DEL MATRIX
Physical
Digital
Human
Dreaming Exploring Locating

PHD/DEL MATRIX
Physical
Digital
Human
Dreaming Exploring Locating

PHD/DEL MATRIX
Physical
Digital
Human
Dreaming Exploring Locating

The Holy Grail of Seamless is true
omnichannel retail
multichannel
crosschannel
omnichannel
Shopping using different channels
Several channels, same purchase
Simultaneous use of channels and seamless
delivery between them

To achieve that a Holy Grail we
have to know what it is…
Crosschannel done well or with more finesseOmnichannel is not:
Omnichannel is:
Continuous Retail:
Interconnectedness between touchpoints everywhere
and anywhere
Perceiving all things and creating a true
CONTINUITY of experience