SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) Judith A. Russell NILIT Global Marketing Strategist Performance Days Munich November 13, 2019
Our Journey Today
•External Factors:
Economic, Technological,
Geopolitical
•Changing Retail and
Media Models
•Why the Demanding
Consumer?
•Brands That Are Winning
and Why
•What You Can Do to
Thrive
Economic Backdrop: Positive
• Global economies
stable to growing
• EU enjoying
seventh straight
year of growth
• US GDP growth
strong
• Corporate profits
healthy, financial
markets at record
levels
• China, India, stars
among the BRICs
We’re Doing Okay! • US economy at full employment • Income inequality growing in US • EU has the least serious income inequality • 400MM people in China and 375MM in India now middle class
Technology Rules
• Consumers are more connected, informed,
and empowered than ever before
• Provides price transparency,
unlimited/immediate access to product,
information, media, engagement
• Data analytics software
• Streamlined supply chain
• Physical stores as mini-warehouses
• 5G is here, will accelerate trends and open
up new technological possibilities
• Next wave of digital commerce focusing on
AI, VR, voice and visual discovery, IoT
The World is Flat
• Globalization driving down costs
of goods, increased access to
markets, products
• Cheap sourcing, oversupply
• Amazon now has sites in 20
countries, delivers in 100+
• Retailers, brands expanding
across borders - Zara, H&M,
Primark, Calzedonia, Nike,
Under Armour, Levi’s, Tommy
Hilfiger, Polo
• People traveling outside their
home country
• Nationalism (Xenophobia)
prevails
Exporting Global Fashion
Fila Tommy Hilfiger
Champion Moncler
Aigle Pinko
Marc O’Polo Salomon
Descente
This Has Caused RETAIL DISRUPTION
• Retail industry undergoing
major transformation
• Traditional players in crisis
mode: sales and earnings
declines, oversupply, falling
foot traffic, price erosion
• Mainstream brands maturing,
losing share to online and
rapidly growing next-gen
players
• So far this year in US, US
retailers have
announced 8,600 store
closures and 3,500 store
openings. This compares
to 5,800 closures
and 3,200 openings for the full
year 2018.
The Shift Online
US online apparel
sales expected to
grow by nearly 20%
annually over the
next 4 years, add
another $50BB in
sales
That is the
equivalent of
Macy’s, Nordstrom
and Kohl’s
combined
Amazon will benefit
most from this in the
US
Europe
Ecommerce expected
to generate over $620
billion in sales in
Europe in 2020
Western Europe
primary
Fashion is the number
one category
Amazon, Otto,
Tesco, Zalando,
Asos, La Redoute,
Argos, M&S, John
LewisChina
Monday was
Single’s Day in
China, $38 billion
in sales
30% of China
population has
moved into the
middle class in past
decade; avid
consumer economy
285 billionaires in
China, compared to
600 in the U.S.,
560 in EuropeApparel Market Situation
• Massive power shift from Those
Who Make to Those Who Buy,
from Producers to Consumers
• Want what they want when they
want it where they want it (37.5
Materials Pop-Up in Boulder)
• Producers facing rising costs and
price pressure
• Supply chain very focused on
reducing cost of goods,
• If you reduce quality, consumers
will lose interest
• Must rise above the rampant
discounting, have a new
conversationThe Premium Market Getting Stronger
High Price, Consumer Relevant
Luxury Brands
Premium Specialty
Brands
Next-Gen Digital
Brands
Low Price, Consumer Relevant 13The Value Brands Evolving
High Price
Discounters, Off-Pricers
Pure-play Marketplace
Giants, Volume Fashion
players
Low Price 14Middle Market Under Pressure
High Price
Mid-Tier Department
Stores
Mall-Based Specialty
Low Price 15Selling Less of More: The Long Tail
Sales
Number of Brands
Read Chris Anderson’s book!!
Hundreds of small, new brands with compelling brand stories will
dominate, (technology-enabled front and back end)
These players are more quality-conscious, less price-sensitive, add up to
significant volumeDisruption in Media
A Global Platform
What Do Consumers Want?
We Want it All
We Want it All
…And We Want
it NOWDemographic Shifts
• Millennials and GenZs buying
and thinking and living
differently than older
demographic segments
• Value-conscious, came of age
in recession, wary of big
corporations (except Apple
and Starbucks), want to live
a different dream
• Bypassing traditional retailers
and channels of distribution,
• First social media generation,
want to figure out and express
their personal style or “brand”
• Most traveled generation in
historyWhat They Want • Brands and products that offer: • Comfort • Convenience • Value • Transparency/authenticity • Sustainability • Quality • Multitasking clothing that does more that just look nice • An elevated experience • These demands drive all the key trends from athleisure to recycled to wearables • If you’re not delivering on at least 4 of these, you’d better rethink your strategy
Convenience, Selection, Service
22Customized Just for Me
Style with Speed
Number of Annual Shopper Visits
Everyone
Else
17 4A New Concept of Time
Reduced lead times
Shorter and more
frequent cycles, blurring
of seasons
Future is impossible to
predict, can’t plan, so
must react faster
Inditex, others have set
new standard for speed
to market
17
DTC vs. wholesale model
Buy now, wear nowExcellent Product
Collaboration
Marketing to Consumer Values
Shared Concern for the Planet
Huge push for sustainability in fashion
Copenhagen, Amsterdam, Berlin, London, NY,
Portland
Upcycling, closed loop
Fiber alternatives – cellulosics, bamboo, hemp
Recycled fibers and textiles – North Face, H&M,
Macy’s others offering money or discounts to
customers who bring in used clothing
Slow fashion: Longer-lasting garments that don’t
clog up landfills
Issues are: greenwashing, lack of standards, how
to certify/validate claimsInnovative Sustainability
Ethical Fashion
Pricing Integrity and Value
Skillful Curation
Elevated Customer Experience
Experience 2.0
Less is More
Compelling Brand Story
Celebrity Connection
Challenges and Opportunities
• The disruption will continue: you must adapt or become
extinct
• Must be consumer focused – really talk to customers
and engage them, they are your North Star
• Continuous innovation – disrupt yourself
• Invite everyone’s ideas
• Work more closely with your supply chain partners to
differentiate, innovate, improve quality, value, speed to
market, responsiveness, delivery
• THE WINNERS will be either low-cost players or
upscale brands offering compelling proposition for
premium but understandable price
• Get rid of silos - COLLABORATE
39Working in retail today is like trying to change an engine while it’s running. But you have no choice - if you’re not trying new things every day, you’re dying. - Managing Director, XRC Labs, (Retail Technology Incubator)
41
You can also read
