Philippine Retailing Newsletters 2018 PRA Newsletter 2018 Q1 | Page 4

Feature PHILIPPINE RETAILING 1ST QUARTER 2018 Surviving the retail revolution: 2018 will be a wild ride There is much talk of dwindling department store locations and an ever-booming e-commerce field of competition facing retailers, but the sky is not falling. Actually, according to The National Retail Federation, for each company closing a store, 2.7 are opening shops. It’s simply become critical that retailers rethink the retail experience. Unquestionably, Amazon-crazed customers will continue to use subscribe & save to replenish necessities every month. But brick-and- mortar clearly still holds a very real place in the hearts and minds of shoppers. Consumer expectations have merely shifted to encompass more curated and personalized in-store experiences. With the quick changing environment of retail, we’re in for a wild ride in 2018. Malls will get a facelift Yes, there’s been a sharp decline in conventional malls in recent years. But rather than a total big box apocalypse, we’re going to see new shopping centers replace outdated mall concepts. There’s a fresh crop of multi-use developments taking shape, as shopping is becoming more focused on being experiential and tied in with leisure and entertainment. The park-like Domain in Austin, TX and newly- constructed Hudson Yards in Manhattan converge at the intersection of commerce and culture. Both boast high-density offices, retail and residential areas with salons and commercial offices, Yelp-worthy eateries, movie theaters, apartments and grocery stores. Residents have everything at their fingertips. We’ve learned that retail has never been more interactive than when consumers are living in the same place that they eat, work, play and shop. Stores will become destinations for memorable moments The traditional mall concept is being overhauled. But how are we driving consumers across the threshold? As online shopping grows, brick and mortar locations will need to put more manpower behind creating memorable in-store experiences that get customers off the sofa and into stores. Thinking beyond online transactions that are limited by a static 12” monitor, brands are beginning to reimagine in-store real estate by hosting Instagrammable experiences. Brands will need to start creating one-of-a-kind experiences year-round that make customers love to visit their stores. 4 Retailers will increasingly integrate digital experiences in-store While there’s power in creating memorable in-store moments that can’t be replicated online, there are also cues we can take from the ease of online shopping. Moving forward, retailers will increasingly start to borrow from the digital world, integrating traditional online experiences in brick-and-mortar stores. For example, retailers like Macy’s and Kohl’s are offering “Click and Collect” options, providing shoppers the option of ordering online and picking up purchases in-store. Taking digital a step further, innovative retailers like Lowe’s has an app which makes it easier for customers to navigate their store. Shoppers using their app in-store are able to locate exact aisles and bins of desired products — a fantastic way to respect your consumers’ time. Stores will start deploying mobile, beacon technology In addition to borrowing the best online shopping advancements and implementing them in-store, retailers will increasingly leverage mobile and beacon technology to connect with smartphone users in advanced new ways. We’ll see stores connect to iPhones, leveraging mobile devices as digital, in-store maps to help customers locate items on their shopping lists. Retail giant Target has begun incorporating the technology into their mobile app and is poised to have the tool rolled out in half of their stores. We will see a cohesive rollout across physical and digital To reach today’s omnichannel consumer, brands will need to make a greater effort than ever before to create a consistent point of view and cohesive experience across physical and digital touch-points. When it comes to the in-store experience, lighting, color, scent, texture, sound and taste will all become an integral part of the competitive differentiator. These subtle nuances should be mirrored when consumers receive an online order at their doorstep. When implemented successfully consumers will recognize the brand before opening the package. Tiffany & Co. has nailed it with their little blue box. (Retail Customer Experience, 01/19/2018)