Interview (Re)Think Commerce 2021 with Lucile Le Goallec
NellyRodi has just released the new edition of its annual report (Re)Think Commerce. How has the pandemic changed business?
2020 was pivotal in making business meaningful again. Between new frictions to resolve and opportunities to explore, the pandemic has had a profound impact on how we consume. First, it made the home the main place for business and consumption. Next, it limited both offline access and physical interactions for distribution (sometimes permanently, as seen with 1,200 Zara boutiques closed around the world or the 125 Macy’s closings planned for between now and 2023). And finally, it accelerated the exploration of new virtual interfaces for brand conversations and conversions.
When we read that “Two thirds of consumers say they have tried new kinds of shopping during the pandemic and 70% intend to continue to do so after the health crisis is finished,” (the McKinsey 2020 Study on 13 Countries), we know that the necessity for brands to transform both their business models and profession to adapt to these new consumption paradigms is far from being over.
In (Re)Think Commerce 21, we examine how brands can achieve a 360° scope (from production to distribution, without forgetting the crucial steps of payment and delivery as well as customer loyalty) to move toward a business model that’s:
- more agile in both physical and digital channels,
- more adapted for dealing with consumers that are as demanding as they are paradoxical,
- more involved in a changing society searching for authentic, positive impacts, and
- more innovative in increasing good memories of the customer journey, both offline and online.
Many people are asking why stores exist today and what purpose boutiques serve.
Distribution professionals had to go into survival mode in 2020, pushing physical retail to reinvent itself and find its place during the crises. Despite the economic closures, if you look at the lines in front of some (re)opened stores or the DNVB’s (brands built on digital technology) move towards physical experience, you understand that business in the future can’t be 100% offline. And yet, rent is still expensive and square-meter costs have to be justified, both in terms of performance and brand desirability.
We believe there are two main directions to explore. The first is to open “third places” to amplify the experiential instead of transactional dimension of stores. Stores can become places for socialising (Kith’s impressive Paris opening includes an ultra-creative ice cream bar); for coworking (ZenSpace has launched coworking cubicles in the Valley Fair Mall in the heart of San Francisco’s business district); for culture (Virgil Abloh’s pop-up Residence Street shop/gallery for Louis Vuitton in Paris); or for interaction and conversation (the opening of Jacadi’s Lifestore with a family-oriented events program). The hallmark all these operations share: reasserting the value of the flexibility of physical experience by making it integrative, social, sensorial and especially immaterial. We really like this quote from Kith designer Ronnie Fief about the opening of his Parisian concept store: “It’s more than a brand, it’s my life. You don’t have to pay to experience it.”
The second direction to investigate is called store repurposing or being super-functional to support digital growth. The traditional drive-to-store blueprint is evolving into a store-to-web concept, such as the Lone Design Club, where you can use QR codes to shop directly from store windows. Another example of stores being reconfigured to boost growth for digital platforms and businesses is the on-the-go format of the new Nordstrom Local hubs. And then there are Walmart’s e-commerce laboratory-stores.
The name of the game: be ultra-optimized and ultra-local with ultra-service.
Can you tell us about two initiatives that caught your attention and illustrate how business is being reinvented?
The first is taking back reality, like Bottega Veneta’s decision to leave social media to refocus on the physical and human aspect of its relationship with consumers. It’s a bold choice, even a sacrifice, by the brand and confirms a vision of a curated retail process that’s ethical as well as cleansing (the “cure’tail” strategy and a return to the tangible).
The second interesting initiative involves parallel consumption hubs, such as Gucci’s work with Zepeto to develop its own version of social media – a cross between The Sims and Animal Crossing. Users can turn a selfie into an avatar who shops in a virtual world before being redirected to the brand’s e-commerce site. This digital version of consumer goods (NFTs or non-fungible tokens) demonstrates new ways not just to consume but also produce, such as the 100% virtual furniture collection from 3D designer Andres Reisinger which sold for $450,000 and is for digital use only.
New business opportunities for brands are emerging from this breakdown of boundaries between physical reality, virtual reality and gaming; between the material and the immaterial; and between the tangible and the intangible.