Categories
Future

The Store As A Hub Model And The Consumer Is The Pilot


In collaboration with Melissa Gonzalez, CEO & Founder of The Lionesque Group who shared her insights on fulfillment, personalization and sustainability as well as recent proprietary surveys results

The year 2020 was an unprecedented test of adaptability for brands and retailers and a year that transformed consumer behavior. Retailers including Target
TGT
, Nike
NKE
, Williams Sonoma
WSM
, and Best Buy
BBY
(to name a few) have all called out years of digital transformation plans accelerated into months. Consumers also adapted their behavior at an accelerated pace and will be more fluid in their transitions between online and offline in 2021 and beyond. With elevated expectations for a seamless shopping experience, consumers now demand flexible fulfillment, personalization, safety, and sustainability as the price of entry into their wallet. That was a tall order for retailers and brands during a holiday where shipping capacity was constrained and return rates likely spiked, reversing unsustainable trends from the past few quarters. The key to surviving and thriving in 2021 and beyond? The store-as-a-hub-model—a framework that Target, Walmart
WMT
and Nordstrom
JWN
adopted early and one that every retailer will need to follow in order to remain relevant.

Tarjay is the poster child for the store as a hub model. We only need to look to Target’s recent Q3 same store sales growth of 21% which was evenly split between digital and physical stores to understand why brick-and-mortar will continue to matter, albeit in a different way, in 2021 and beyond. For select retailers like Target game changing stores re-models have resulted in significant share gains and I believe stores will continue to play a key role. It certainly doesn’t hurt that the consumer will likely continue to be all about one-stop shopping and Target ticks all the boxes.  It is also important to highlight that Target is fulfilling 95% of all orders from stores (75% of digital orders from stores) which means quicker fulfillment and higher profitability. One final stat on the importance of physical and digital integrated retail –after launching fresh/frozen/refrigerated pick-up in 1,600 stores, two thirds of customers are showing up to stores within four hours. Turns out the consumer is willing to drive to a store for instant gratification rather than have it delivered—a win for the consumer and the company’s bottom line. 

One of the best examples of the digital pivot was Best Buy moving to a new operating model within 48 hours after stores were shuttered back in March. Despite the shock to the operating model in the second half of Q1, the company retained 81% of the previous year’s sales without a single customer stepping foot in a store. Best Buy accomplished this by pivoting to the pavement (curbside pick-up), using its stores for fulfillment rather than selling and adapting its consultation model.  Most recently Best Buy was creative in solving shipageddon, asking employees to deliver in their local communities. While Best Buy is an efficient company one of the reasons for the pivot success in my opinion is the organization leads with empathy (expanded caregiver program, back up child care, a wellbeing strategy and proper compensation).  

Williams Sonoma has also transitioned seamlessly as digital exposure increased to 76% in Q2 (versus 56% last year), however don’t count stores out as brick-and-mortar continues to play a crucial role for the brand with Q3 demand store comps down only -4% year-over-year, and 20% of holiday orders expected to be fulfilled from, yes physical stores. While stores clearly still matter even the top performing retailers will come out the other side of 2020 with plans for fewer stores.  With the most recent results yielding digital comps of ~50% and stores comps of -11% Williams Sonoma not surprisingly is planning a future with fewer but more profitable stores.  Mall operators may be in for a rude awakening in 2021 and beyond as it’s not just the obvious suspects declaring bankruptcy —on the contrary some of the healthiest retailers around will be negotiating better real estate deals and shrinking footprints. 

Flexible Fulfillment: Survey Says Immediate Gratification Is The Way to Our Wallet

The concept of the “connected store” isn’t new, but in 2021 we’ll start to see a shift in prioritizing budget allocation, one that will increase IT infrastructure needs to support the growing expectation for buy online pick up in-store, pick-and-pack, and curbside pick-up capabilities. Next year and beyond, stores will need to seamlessly integrate into supply chain systems, connecting all channels, enabling them to flex from both a point of fulfillment to a place of discovery. They will achieve this through modular and agile design thinking in order to attract and satisfy a different kind of shopper, most notably, one who shops less frequently and consumes less overall—yet buys more per shopping trip. In a survey* conducted by the Lionesque Group (November 2020) the biggest determining factor for a positive experience included same-day pickup availability and mobile phone notifications when product is ready.

With economics supporting a company’s ability to fulfill orders from the store, flexible fulfillment is proving advantageous to brands and retailers as they are benefiting from lower freight costs and improved margins, while consumers benefit from shorter, even same day pick up times. This will motivate brands and retailers to further invest in these initiatives.

Personalization: Survey Says “BYOD”

While the store will continue to serve to solidify a point of loyalty, it will be on the onus of individual brands to determine what value their physical stores will serve in the customer journey. The events of 2020 will have conditioned consumers to plan store visits more purposefully – where research will have been done ahead of time, and visits will be done with intention. Merchandising will need to be more consciously and purposefully curated, shifting away from capacity per square foot and focusing instead on experience per square foot economics as seen with companies like Nike with the expansion of their Nike Live stores which focus on localization, personal service, and digital integration. 

The integration of in-store technology will be a critical component towards creating intelligent algorithms around merchandising strategies and in-store data capture (from the storefront window to the dressing room) to provide learnings to best support each individual shopper across all channels. For example, FitMatch—a company based on an AI tool that helps customers identify their body type and best fit with a brand—is one example of a fast-growing technology being integrated into the in-store dressing room experience. But even low-tech solutions, such as QR codes, are seeing a rise in both acceptance and active use. Almost a year into the pandemic, however, we’re still just scratching the surface of possibilities associated with delivering a personalized shopping experience in today’s “Bring Your Own Device” (BYOD) world. The same world where 60% of female respondents to our November 2020 survey* shared they prefer to be able to interact via their mobile device while in-store opening the line for more personalized shopping experiences.

 Sustainability-Yes The Customer Wants It All

Sustainability and ethics continue to be more closely aligning with products used in the creation of stores, shop in shops, and pop-ups. With consumers more strictly scrutinizing where their products come from and the ethics and practices of the companies selling them, the dedication to the environment and doing what is right for both people and planet has been reinforced by the tide of 2020. A commitment to reducing carbon, ethics in the supply chain, and human health are becoming table stakes when it comes to consumers’ values that contribute to high engagement and brand loyalty. 

Brands like Estee Lauder are making a commitment to building sustainability—whether pop-up or permanent—as they stand behind their mission to reduce greenhouse gas emissions and corporate climate action plan. Nike has also made progress in their commitment towards designing sustainable spaces, as exemplified by their flagship in Paris where they’ve weaved in 85,000 kilos of sustainable materials into their design. In addition, the Kids shoe subscription service recycles heavily used shoes into playground material.  Levi’s is also leading the charge on sustainability as a leader in reducing chemical and water use in products (did you know a pair of jeans can take 90 gallons of water to produce?). The company uses more than 20 water-saving finishing techniques and importantly shares their knowledge with the industry.

*Primary Research Data Survey conducted by The Lionesque Group, an MG2 Company, November 2020. 1,312 respondents, 52.5% Women, 47.5% Men ~20% of respondents rural, ~30% urban, and ~50% suburban

 



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Categories
Gadgets

Entertainment Consumer Electronics Market, Share, Application Analysis, Regional Outlook, Competitive Strategies & Forecast up to 2026


Market Study Report, LLC, has added a detailed study on the Entertainment Consumer Electronics market which provides a brief summary of the growth trends influencing the market. The report also includes significant insights pertaining to the profitability graph, market share, regional proliferation and SWOT analysis of this business vertical. The report further illustrates the status of key players in the competitive setting of the Entertainment Consumer Electronics market, while expanding on their corporate strategies and product offerings.

The recent study on Entertainment Consumer Electronics market contains a comprehensive analysis of this business sphere, with regards to the key growth stimulants, opportunities, and limitations. The report examines the influence of the COVID-19 pandemic on the growth trajectory of this industry. It further highlights crucial information pertaining to the competitive landscape and analyzes popular strategies employed by leading players to adapt to the market instabilities.

Request a sample Report of Entertainment Consumer Electronics Market at: https://www.marketstudyreport.com/request-a-sample/2954203?utm_source=Groundalerts.com&utm_medium=AN

Major highlights from COVID-19 impact analysis:

  • Effect of COVID-19 pandemic on the economy.
  • Fluctuations in the supply & demand channels
  • Projected impact of COVID-19 pandemic on the growth matrix.

Additional highlights from the Entertainment Consumer Electronics market report:

  • The product terrain of the Entertainment Consumer Electronics market is divided into Flatscreen TVs,DVD Players,Video Games andRemote Control Cars.
  • Revenue and volume projections of each product type are presented.
  • Estimates concerning the CAGR and market share of each product segment during the study period are included in the report.
  • With regards to the application spectrum, the market is cateogrized into Online Sales andOffline Sales.
  • Estimations of the CAGR and market share of each application segment during over the estimated timeframe are enumerated.
  • Companies that define the competitive landscape of Entertainment Consumer Electronics market are Toshiba,Sumsung,Pansonic,Traxxas,LG,Redcat Racing,Team Associated,GIEC,HUALU,HPI Racing,ECX,Sony,Pioneer andPhilips.
  • In-depth profile of the listed players, alongside their manufactured products, production patterns, and market remuneration are elucidated.
  • The document also includes other important facets such as the gross margins, pricing patterns, and market share of each participant.
  • The report sheds light upon on the competitive trends and provides a holistic assessment of the industry supply chain.
  • By means of Porter’s five forces analysis and SWOT analysis, it interprets the feasibility of a new project.

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An overview of the regional analysis:

  • Geographically, the Entertainment Consumer Electronics market is fragmented into North America, Europe, Asia-Pacific, Southeast Asia, Middle East and Africa, South America.
  • A synopsis of each regional contributor including their projected growth rate over the forecast period is stated in the report.
  • Details reflecting revenue & sales amassed by each region are cited.

Major Points Covered in The Report:

  • Market Environment: Includes sector size, market size, and growth analysis by segmentation.
  • High-potential Countries’ Analysis: Indicates changing share of value consumption in the various segments & sub-segments across high-potential countries globally. The report also provides analysis of market assessment, economic development, socio-demographic, governance indicators, and technological infrastructure.
  • Country Deep Dive: Provides the overview, demographic analysis, and key trends across high potential countries.
  • Competitive Environment: Provides an overview of leading key players, besides analyzing the growth of private labels in the region.
  • Distribution Analysis: Provides analysis of the leading distribution channels.
  • Challenges and Future Outlook: Provides the challenges and future outlook pertaining to Entertainment Consumer Electronics Market

For More Details On this Report: https://www.marketstudyreport.com/reports/global-entertainment-consumer-electronics-market-report-2020-by-key-players-types-applications-countries-market-size-forecast-to-2026-based-on-2020-covid-19-worldwide-spread

 

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