‘ROX vs ROI will be critical’
By Retail4Growth Bureau | January 09, 2024
The closure of experiential retail pioneers like Showfields and Casper will prompt retail businesses in 2024 to refocus on ROI across their holistic value measurement, ensuring that retail experience innovation is balanced with commercial viability says Antony Parham, Creative Director, EchoX, in this exclusive column for Retail4Growth, as part of the series ‘2024: What’s In Store?’
2024 will continue to see the same tensions, challenges, and opportunities play out and develop as what global retail experienced in 2023.
We saw in 2023 that retail success always hinges on understanding audiences’ mindsets and creating product, service, experience, and brand innovation to emotionally connect to customers desires, wants, and needs at anytime and anywhere via an always-on brand world.
The unstable global landscape, inflationary pressures, squeezed consumer spend, and path to sustainability will continue to challenge retail businesses who can remain resilient through innovation, technology, and AI data analytics to simplify product assortment, increase automation and streamlining structures to drive greater long-term profitability.
The stage is set for a dynamic retail landscape across the globe in 2024 with some key tensions to play out:
Localisation v Globalisation
Global lockdowns were a key driver behind brands transforming their real estate into smaller more locally nuanced retail destinations. For example, Ikea opening small format Planning Studios for city centre locations is just one of the many brands adopting a hybrid model of smaller, better, and more cost-effective physical destinations as showrooms to their online world.
For some retailers, global domination is still a key mission with store expansion plans across markets. An example is Uniqlo’s strategy for new global openings, including consolidating in India which is projected to be the third-largest consumer market by 2030.
In the luxury sector, it’s great to see Sabyasachi expand beyond India creating a global brand of wonder emporiums mixing Asia and the West in new categories. An inspiring example of local going global.
ROX v ROI
The experience economy transformed many retail destinations into playgrounds, sensory theatres, and studios of immersion. As global economies continue with challenges, return on experience (ROX) customer engagement models have proved difficult for some brands to monetise into revenue.
The closure of experiential retail pioneers like Showfields and Casper will prompt retail businesses in 2024 to refocus on ROI across their holistic value measurement, ensuring that retail experience innovation is balanced with commercial viability.
Sustainability v Consumerism
Retail designers and retail businesses have a collective responsibility to create products and experiences that minimise impact to our fragile world. From small independent brands to global monoliths, many are focusing more on purpose, ethics, and sustainability which are becoming more mainstream.
Yet, on the flip side, the rise of consumers ‘trading down’ to save money has seen ultra-value start-ups like Shein and Temu take the internet by storm. A Tsunami of incredibly cheap products with minimal transparency on ethics, sourcing and authenticity is driving up global supply chain costs due to their volume of trade. In 2024, will sustainable consumerism prevail or will super value retail be part of the problem and not sustainability solution? It remains to be seen.
Permanence v Programmatic
2023 saw the continuation of inventive brand collaborations and experiential pop-ups across the globe. Consumers are insatiable for newness and experiences that offer escapism from life’s challenges so permanent brand homes whether digital or physical need continual FOMO. Programmatic ever changing retail experiences blurring culture, art, entertainment, and media linked directly to retail marketing campaigns will continue to be a winning strategy to inspire customers to invest their time and money with your brand.
Automation v Human
In-store technology and AI have continually been tried and tested to create stores of the future blurring the online and offline. Amazon Style, the self-assisted app driven pilot stores one of the latest examples where smart technology is used with the aim of creating a seamless shopping experience.
Technology alone cannot nurture connections and grow customer relationships. It is a brand’s instore team empowered by smart technology tools that can bring the point of difference to the competition, becoming relationship creators building long term brand advocacy. Memory making great experiences and service will always require the human touch.
CEO, Restore Design
‘Authenticity, Curation & Personalisation will be the differentiators’