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PSFK On The Future Of Retail And ‘The Brandless Experience’

"In the brandless experience, a brand which is trying to optimize themselves for a search engine queries, names itself based on what it's expecting people to ask for, whether through Alexa or through Google itself,” says PSFK’s Piers Fawkes.

A report from business intelligence platform PSFK finds that 2017 will be the first year that consumers expect their online holiday purchases to exceed their in-store spending.

But that doesn’t mean that bricks-and-mortar retail is “doomed,” says Scott Lachut, PSFK’s president of strategy, and co-author of The Future of Retail 2018. It just means that lines between online and offline, mobile and desktop, plus the rise of the Connected Home, are all blurring for consumers.

That blurring of channels is leading to what Lachut and Piers Fawkes, PSFK’s founder and editor-in-chief, describe as the “brandless experience” as voice-activated single responses replace endless choices of links on a search results page.

GeoMarketing: What do your findings say about the current “retail experience?”

Piers Fawkes: We constrain ourselves as brands and retailers when we just think the retail experience is a store. Offline retail is still very important. It’s important from a financial point of view. But it’s important from a society and community level as well.

While there’s a lot of doom and blue in the marketplace, we definitely see silver linings have taken place. We see brands such as Warby Parker, the Beta Store, investing in offline because offline can do something that online can’t do. And so we wanted to help write a report that helps traditional retailers and new retailers, and traditional brands understand the opportunities and think about the pillars, and really give them a framework to think about how to re-approach offline retail.

While the differences between online and offline commerce are fairly self-evident, what is important in terms of what offline can do that online can’t?

Scott Latchut: Even more than the tactile quality of offline, it’s that emotional connection that you can have with a consumer within the context of a physical experience. Offline commerce can clarify a consumer’s aspirations to their broader lifestyle. Commerce in general is about recognizing the personal identity and goals and aspirations of an individual. But within a physical, offline transactional environment, they’re trying to accomplish something, not just necessarily get a physical good.

With certain things, yes, a consumer is just trying to get that item and get on their way. But the opportunity is to genuinely appeal to their higher order needs. Creating community, helping people educate themselves, aspire to achieve better things through the purchases they have, and recognizing that the people that are coming into your store are not just shoppers or consumers, but they’re parents and teachers and athletes and all these other things that make up a specific identity. Finding that area that aligns with your brand and where you can provide value beyond that transactional moment, if you will. That’s where we still see offline having that differentiation in terms of creating that experience.

However, there’s still the role that needs to play as the store still needs to function and have products available and/or get them into the hands of a consumer in a quick and immediate way. So all those block and tackle side of things still need to get done in an efficient manner. But that is the foundation upon which the experience lifestyle side of things is built.

Retailers have recognized the need to be “omnichannel.” Does that term still have meaning at this point? Has that concept been so entrenched that it doesn’t need to spelled out anymore?

SL: That’s a drum that we’ve been beating for the past couple of years. Finally, the industry is starting to catch up to that notion which is from a consumer point of view, the idea of omnichannel, I don’t think ever really resonated with them. It was just, “I have the desire to shop with a particular retailer or brand, I’m going to choose my preferred channel and then there’s an expectation that all the other stuff would sort of work itself out.”

And from a business perspective, companies needed to approach it as, “Okay we need our mobile strategy and or digital strategy and our store strategy.” But because it’s so fluid in terms of the way that customers are approaching it, now they’re getting back into this notion that it is just retail, and we need to be able to create the best experience regardless of where that individual is choosing to interact.

PK: One of the things we’ve been playing around with lately are phrases like “mono-channel.” So I’m just going to add to Scott’s point is that, move over omnichannel. It wasn’t ever realized. In fact, consumers see one sales channel – they think of buying something and don’t make a distinction between an offline purchase and an online one; it’s just a purchase. Retailers that pursue a kind of single channel strategy, which just encompasses multiple platforms, will create a far richer experience for the consumer and the shopper. And hopefully, they will also then drive sales.

Voice-activation through Connected Intelligence devices and assistants like Amazon Echo’s Alexa of Google Home’s Okay Google appear to be influencing how consumers discover stores and products. How do you view the impact on retail from this new channel?

PF: There’s a challenge ahead when it comes to brand and sales, because you don’t necessarily have the visual interface. You no longer have the ability to promote and brand yourself through packaging. So when you ask Alexa for some batteries, or let’s say when you ask Okay Google for an energy drink, Alexa and Google Assistant are going to put the drink it feels should put in your basket. Brands just think it’s kind of a shopper marketing exercise. But there’s a moment where these devices are allowing or changing our relationship with brands in that retail process.

It’s something that legacy brands in particular need to think about. We see new brands as entering the “brandless experience.”

In the brandless experience, a brand which is trying to optimize themselves for a search engine queries, names itself based on what it’s expecting people to ask for, whether through Alexa or through Google itself.

SL: When it comes to voice-activation, it’s still super niche. Obviously, for those basic products where a brand name is less important, that’s how people are shopping through those platforms.

Voice hasn’t impacted luxury purchases where the product itself is all about the distinction in how it looks. The difference between fulfilling a basic consumer need is where voice is playing its role currently. People are already not even quite there yet in terms of being fully comfortable or heavily adopting voice technology in a commerce context. But even when they do, it’s still going to be at a very sort of basic level of fulfillment in terms of the types of products that they’re getting through those systems.

PF: One of the things that we’ve been thinking about is the changing importance of desktop retail shopping. Voice surely is sort of having an effect on offline retail, but it’s also having an effect on online retail. There are a lot of retailers are still focused on the desktop experience. We all know Alexa and those voice-activated systems are connecting the home and going mobile as well. Retailers’ investments are a bit behind that change in consumer behavior.

Here’s a personal anecdote: I was speaking with my mother-in-law this weekend. She was hanging out with us and taking photographs of the kids. And she turned around and said, “I haven’t used a computer for about three months.”

It was because her of iPhone. We’ve been talking about phones being supercomputers for so long. But we always think about younger audiences using these devices to the fullest extent and you suddenly realize that they’ve come to the place where the mainstream is comfortable using these smartphones for retail, for browsing, for all the other things that they’re useful for.

Aside from mobile and voice’s influence on retail, what other trends are you seeing?

SL: We’ve been thinking about what we call the retail operating system, which is that technology and data are underpinning the physical retail experience. Being able to understand how customers are interacting within a space, marrying that with the merchandising decisions is changing.

Retailers are looking at what’s going into a fitting room and then resulting in a purchase, versus what perhaps is going back out onto the rack, and really treating that space as much more of a way of understanding what works and what doesn’t from various aspects of a brand. Using that as sort of research and development and then taking those insights and really turning them into better business decisions.

Alongside that is when you’re able to encourage a customer to log into the physical store, so to speak, and what you can begin to do in terms of offering them a more personalized and recognized experience within that store.

Previously, there was that notion when retailers wanted to glean those learnings in a surreptitious way. And then perhaps be able to come up and sort of in the most creepy way possible, such as saying hello to somebody by their first name. There’s much more of a recognition and respect now that you can create a good enough experience that replicates recommendations and personalization – something that online does really well — and being able to take what is known about that person and use that to suggest products and ease them through some of that friction as they shop.

What’s your sense of that state of retail’s strength or weakness right now?

SL: It’s worth remembering that offline retail is still 90 percent of total consumer transactions. But we’re going to see is a continuing consideration of that physical footprint.

It’s going to be a smaller, more focused on experience, service. And for the individual coming in, limited retail is the ability to fulfill the immediacy of that physical retail experience, but just in a different way.

For example, maybe you won’t walk out of the store with a particular product. But it’s going to get to you within that 24-to-48 hours. And you’re going to have that great experience as a result of that. Going back to that single channel and a more integrated view of retail, retailers are being more adept at understanding that a sale is a sale is a sale. Just being able to understand a consumer to optimize all the channels they come to you through can allow them to do what they do well so that all channels are working in concert together to create the best experience for consumers.

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.