As the lingerie industry prepares to enter 2015 and a brand new year of trading, we look back on the top retail trends of the last 12 months.
Omni channel approach
The lines between physical and digital stores became increasingly blurred in 2014, as more retailers adopted the omnichannel approach to trading. Omnichannel retailing is the evolution of multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels.
Victoria Beckham epitomised this when she opened her first store on Dover Street, London in September. The designer opted for all transactions to be processed via iPads, eliminating the need for unsightly cash desks.
Another example of omnichannel retailing is when consumers hop on their mobile phones in store to make sure they’re getting the best deal. This generates a big problem, however, when physical stores are used as showrooms for other brands, a challenge some savvy retailers are facing head on (see Reinventing Business Models).
The rise of the convenience format
Changes in consumer habits have driven a return to smaller and local trips. In its sixth consumer report, Deloitte noted that there has been a migration of shoppers to local town centres and out-of-town parks, with 38% of consumers visiting their local high street several times a week, if not daily.
But while proximity to their local stores is a key reason why consumers choose to visit them so frequently, so is the increase in product availability, driven by a rise in click and collect services at stores like Ann Summers.
In August 2014, the UK government revealed plans to help more British retailers offer click and collect services by freeing them to make changes to their premises, such as building collection points or lockers and installing loading bay doors. Proposals like these means that click and collect sales could reach highs of £3bn this Christmas, a 40% increase on last year, according to a report published in the Times in October.
Reinventing business models
The act of measuring the revenue a retail business makes for every square foot of sales space is “beyond archaic”, according to Rachel Stechtman, founder of Story, a boutique in New York’s Chelsea neighbourhood. Story is a mash-up of a store, magazine and galler and, every six to eight weeks, it is rebuilt around a new theme, this month’s theme being Home for the Holidays.
Speaking to Forbes in May 2014, Stechtman explained her need to shake up the retail scene. “We only need so much stuff, and that stuff is available other places…you can sit there and squawk ‘we’re not generating sales and we’re being used as showrooming for other brands, or you can say ‘hey, are there other ways that we can create customer loyalty and simultaneously generate revenue in another way?’,” she said.
Other examples of retailers with non-traditional business models who have gained popularity this year include beauty and lifestyle store Birchbox, with its subscription retailing, and Etsy, which allows consumers to shop directly from people around the world.
Big Four under threat
Speaking of business models, a retail expert warned in October that Britain’s Big Four supermarkets should update theirs, or else be overtaken by discounters. Heiner Evanschitzky, professor of marketing at Birmingham’s Aston Business School said that with competition hotting up, Tesco, Sainsbury’s, Morrisons and Asda need to do more to stand out and get close to the discounters snapping at their heels.
His comments came two months after Tesco issued its second profit warning of the year and Sainsbury’s shares closed down 7% after it recorded a 2.8% fall in sales in the three months to the end of September. In response to this disappointing result, Sainsbury’s announced in November that it will scrap a giant programme of store openings in attempt to rein in costs and invest in lowering prices.
In January 2014, the UK emerged as the world’s leading exporter of goods purchased online, according to a study produced by OC&C Strategy Consultants in partnership with Google.
The UK had a trade surplus of over US$1bn (£604m) in 2013, while the US and Germany were the nearest challengers with $180m and $35m trade surpluses respectively, the study revealed.
This export trend continued into the year, with overseas shoppers increasingly searching for UK apparel retailers online and chains such as Boux Avenue and Marks & Spencer responding to their needs by expanding into new markets like the Middle East and Scandinavia.
And last month, Niki McMorrough, CEO and creative director of British lingerie brand Made by Niki was featured in a guide for first-time exports published by UK Trade and Investment. She was helping to encourage other leading businesswomen to expand their companies abroad by sharing her experiences.
Pass the parcel
UK retailers are on course to dispatch a record 900 million orders, or 930 million parcels in 2014, with 120 million orders predicted for December alone, according to the August IMRG MetaPack Delivery Index.
Based on past e-retail delivery patterns, order volumes are expected to increase by 10% and steadily grow in the run-up to Christmas.
This trend is thought to have been driven by a high quality of service compared to the previous two years, leading to customers feeling more comfortable in making last-minute purchasing decisions. But, some delivery problems relating to address queries seem to be on the rise, so retailers will need to keep an eye on this, according to IMRG head of e-logistics, Andrew Starkey.