Last week, the Fung Global Retail & Technology team attended the 2017 National Association of Chain Drug Stores (NACDS) Annual Meeting in Scottsdale, Arizona. Below are our key takeaways from the event.
1. The Store of the Future Will Build a Sense of Community
Retailers have been talking recently about stores needing to fill a bigger purpose than just selling merchandise. New store formats will be set up accordingly, with more space that allows for social interaction as well as the provision of various services, as many consumers today find themselves craving human contact in retail communities.
2. Building Social: A Startup that Builds on the Concept of Community
Building Social is a startup that connects office and apartment building owners and managers with amenities ranging from experiences to events to perks and community management programs. Building Social is also leveraging the wellness trend by offering a turnkey wellness program with yoga classes, guided meditation and nutrition experts, among other things. Ultimately, the program is a tool that landlords and building managers can use to curate a building’s community.
3. Stores as a Platform
Retailers are looking for ways to use their stores as a platform to drive in-store traffic, which can, in turn, drive add-on and impulse purchases and higher spending. Offering a “buy online, pick up in store” service is one way to do that, as it gives customers the convenience they desire while also getting them into stores. Some retailers are even offering discounts for customers to use the service.
4. Wellness: The New Luxury
The popularity of the health and wellness trend has been visible across consumer groups in the US, and it differs significantly from the various food and exercise trends that influenced particular demographics in previous decades. Eating healthily, exercising regularly and monitoring one’s health have become a lifestyle choice, and one that looks to represent a permanent change in terms of consumer preferences.
5. The CMO’s Role Is Increasingly Complex
The role of Chief Marketing Officer (CMO) is becoming increasingly complex and difficult as retailers and other companies try to reach different demographics and cohorts that shop, live and behave differently.
6. Growing Senior Population Underpins Demand for Higher Healthcare Spending
The growth of the senior population is being driven by “older seniors,” those aged 75 and older, and that group is projected to grow even faster than the total senior population in coming years. At the same time, more and more seniors are expressing a preference for aging in place: they increasingly prefer to stay in their own homes rather than move into an assisted living or long-term care facility, even when they need assistance with the basic tasks of everyday life.
7. Amazon Is Curating and Supporting Startups with Amazon Launchpad
Amazon Launchpad is a platform that enables consumers to find innovative products from vetted startups. It also offers services and resources for startups that enable them to differentiate themselves from bigger competitors. Launchpad vendors are given special treatment and receive support via Amazon’s services hub, where vendors can seek help from more established service providers.
8. Mobile Is Underdeveloped as a Channel
Low friction is critical to both the online and mobile experience. Mobile offerings need to be tailored to the mobile experience, rather than just looking and functioning like downsized desktop sites. Mobile sites are not just about transacting, but also about inspiring people by presenting them with products they may want to buy in the future.
9. VR to Gain Traction in 2017
Although it looks like the technology still has a way to go before VR devices and applications become commonplace, more retailers are likely to experiment and deploy VR shopping solutions in 2017. Consumers are looking for more experiential shopping, and gamification has proven to be an effective tool to attract and retain customers.
10. One Word Sums Up Retailers’ Current Sentiment: Overwhelmed
Our sense is that many industry leaders feel overwhelmed by the changes their companies need to make in order to compete in the current retail environment. Given the current performance of and recent results reported by major retailers, most industry insiders agree that retail has not seen this pace of change in years, if not decades.
The Fung Global Retail & Technology team looks forward to attending and reporting on future key industry events.
Other pieces you may find interesting include: Top 10 Takeaways from Day 1 of Global Retailing Conference 2017, Top Five Takeaways from Day 2 of Global Retailing Conference 2017, World Retail Congress 2017 Day 1: Terry Lundgren, Sir Ian Cheshire and Jo Malone Offer Thoughts on the Retail Revolution