Back to Business A Level to crack the Retail Industry.

The retail industry has never had it so tough, squeezed by a stagnant economy and the structural challenges thrown up by the rise of ecommerce.

However, every challenge also represents an opportunity, we were all taught that in A level business weren’t we?

1. Inspire consumers by curating the physical environment

All brands will have need for curators in the future to help communicate the joy of shopping. Tim Greenhalgh, chief creative officer at Fitch Worldwide, argues the new differentiators for brands will be innovations that play to consumers “dreaming and exploring mind states”.

Lego bringing the products inside its boxes to life using augmented reality technology that a three-year-old child can use is an ideal example of the how brands can inspire shoppers.

We recently completed an in store augmented reality display for the Audi A1 ensuring it was the fastest selling Audi in history. That just shows the power that closing the gap between imagination and reality can have.

2. Showrooming is nothing new

The showroom-style environment of Apple’s retail stores, held up by many as the future of retail, is a centuries old concept. David Roth, chief executive of The Store, cites the rows of shops that were built on Rialto Bridge in the first half of the fifteenth century as an early example of shops being used as “showrooms”.

Roth explained that the difference today is that “mobile technology has made showrooming more effective”. The only way to guard against consumers using physical stores as showrooms and buying products elsewhere online is to create a very clear value proposition that gives the brand a point of difference.

3. Don’t be complacent about the competition

The explosion of ecommerce means “your biggest competitor may not even be known to you today but they will be known to you tomorrow”, according to Futures Company EMEA deputy managing director Henry Tucker.

Retailers that will succeed are those that understand how the consumer is changing and how to turn the changing behaviour to their advantage. However, the difficulty is judging the pace of change. In the words of Bill Gates: “We overestimate the change that will occur in the next two years and underestimate the change that will happen in the next 10″.

4. Data is your friend, avoid letting it swamp you

Retailers need to be great at something specific rather than being everything, everywhere to everyone. Phil White, planning director of Geometry Global, says the future is about “streamlining, simplicity and rationalisation based on data and a deep understanding of how people behave”. Data should be used to support the business strategy rather than dictate it because retail is fundamentally about people. Chris Perry, joint chief executive of Fabric proposes retailers should “think about the least amount of data to maximise their goals”.

5. Location is still king

“Location, Location, Location” are the three most important factors in retail, according to Roth. The importance of location nowadays is becoming less about where the physical retail store is on the high street as the emphasis shifts to online.

Roth explained that “today’s location is about virtual location and that virtual location is going to change constantly”. Location-based marketing is still a relatively untapped channel, but there is no doubting its power.

Kleenex managed to increase sales year-on-year during a mild winter by combining data on historical flu outbreaks from the NHS with data from Google ad words auctions on keywords linked to illness such as “flu remedy”. This allowed Kleenex to adapt its media spend on its winter flu campaign in real time to effectively boost sales.

6. Learn from the best

Retail brands would be wise to adopt some of the philosophy of Amazon founder Jeff Bezos. Amazon believes it is a waste of time endlessly poring over financial results and instead focuses its energy on “controllable inputs”, according to eCommera co-founder and chief scientist Michael Ross.

Bezos famously fired marketing directors who came to him to talk about conversion rates until they stopped talking about it. Prevention is better than a cure is another Amazon philosophy. In a possibly apocryphal tale, Bezos had a moment of epiphany during a tour of one of his fulfilment centres.

The moment came when he was asked: “I’m in favour of a clean fulfilment centre but why are you always cleaning? Why don’t you hunt the source of the dirt?”

Project: Puma

Plajer & Franz under the direction of Puma head of global store concepts Ales Kernjak, the building has been completely ‘Pumarised’ inside and out with an intelligent yet simple design that embodies the joyful and witty spirit of the sport-lifestyle brand.

The impressive facade is made out of meshed metal, allowing daylight to enter the store, while at night the interior lighting beams out onto the street, providing a glimpse inside the building during closing hours.

The interior is designed to unite Puma’s various collections while celebrating footwear as the core of the brand. The lower two levels of the building are designated shopping areas, while the open roof top provides a space for performances and sport events.

A large cone-shaped staircase winds up through the centre of the store which, together with its vast red brand wall, draws customers into the space. From the base of the stairs, a footwear catwalk stretches across the entire ground floor, which is also home to the sport-lifestyle product line and black label.

‘Although the design of both areas is simple and functional, with references to Japanese architecture, both speak different visual languages and are clearly distinct from each other,’ explains a spokesperson for Plajer & Franz. ‘With a very light and flexible design, the use of materials such as black steel, plywood panels combined with re-used gym flooring elements and the mixture of matte and high gloss surfaces, the black label area carries a visible sports heritage.’

The design of the first floor, which is dedicated to the brand’s performance line, is even more flexible and functional, using more technical materials such as stainless steel and perforated metal in silver grey. A catwalk area also runs across the entire floor, leading towards a footwear focus wall.

Digital screens are scattered around the store, above footwear display tables to show brand videos, while the Puma ‘peepshow’ in the fitting rooms – a red box that opens up to show various video clips – allows customers to further engage with the brand.

‘Shopping at the new premium store is above all an experience and, in line with Puma’s philosophy, an active interaction with the brand,’ says the spokesperson for Plajer & Franz. ‘Whether creating their own customised sneakers at the Puma Factory, engaging with Puma’s sustainable actions summarised in the Sustainability Journey or enjoying the online experience via iPads, clients shall be surprised, entertained and given opportunities to identify with the brand.’