We're fast approaching the half way mark for 2017, resolutions have either been cemented or long abandoned and we're all about ready for a summer holiday. The world seemed to enter this year with a little uncertainty, there was no denying that 2017 would be a year of changes - whether they are for the best is really up to you.
One area that is seeing ongoing change, and felt particularly relevant to us here at Elite, is retail. Not one to ever sit still, the retail landscape is always adjusting to changing consumer behaviour, updates in technology, economic and political influences, and the demands of society. And it hasn't necessarily received the best press of late. Peruse any established publication, whether it's specific to fashion or not, and you'll see stories of scepticism - the legend that is Karl Lagerfeld said it best "The world is changing — not always for the best — but we have to follow the changes and the Internet". His comment pertained to the "see now, buy now", direct-to-consumer fashion shows that have been a sweeping trend across the luxury industry, which he discussed in a recent interview with Business of Fashion. We've seen Burberry, Tom Ford, Tommy Hilfiger, and Ralph Lauren all adopt this new strategy, but any concrete evidence to suggest a dramatic improvement in sales is hard to come by and the concept is still very much considered in an experimental stage. Brands that have been early adopters are playing into the desire for instant gratification among consumers and have reported spikes in traffic to their websites and sales at the time of the show.
But not everyone is leaping to make the switch - presumably to allow others to test the unchartered retail waters as we wait to understand the longer-term implications. These changes not only impact the internal workings of a brand, with teams collaborating more closely than they may have before and supply chains adjusting, but also retail in general as stockists and buyers find their feet. It's definitely an exciting time, as fashion waits with bated breath.
Despite the media giving the impression that more traditional retail spaces, such as the humble mall and old faithful department stores, are struggling, it's not all doom and gloom. Many are criticising this negative stance and have claimed it's completely unjustified. We're merely in a state of transition, which is to be expected and is nothing to shy away from. In the case of malls, investors are calling it an evolutionary period - a natural selection from the old to the new - with the functionality of space changing. As we said, retail is bound by the need of consumers and what people want from malls is changing or, perhaps more aptly, diversifying.
There is no denying that the amount of retail space available for rent has grown, the heyday of the '90s and '00s when teenagers called the mall their second home is not today's circumstance. Yet as brands close their doors a window of opportunity opens for more diverse endeavours, ones that cater to the time-poor customer who values convenience and experience above all else - and not just while they shop. Diversification truly is key. Today people want to be able to pick up that new shirt but also grab a new phone charger, something for dinner tonight, run to the pharmacy and maybe even fit in a workout. All without having to walk more than 20 minutes across the complex if possible. With added competition from the internet, providing a well-rounded destination that recaptures customers hearts, at their utmost convenience, will be the malls saving grace.
A further layer to the diversification schemes being employed is the converting of mall retail space into office or residential spaces. In Dearborn, Michigan a former Lord & Taylor department store is being converted into a product-planning centre for Ford, and this isn't the only example. Another is the Monmouth Mall, New Jersey which is converting units into apartments and hotels. The list continues. Although this may not sound like a positive for retail, it again can provide some benefits. By incorporating offices and homes, you are providing a customer base that is always present and has needs. Though the number of brands represented may have dropped, those performing well will continue to do so and will be faced with less competition, a more astute one at that.
The key points to be made here is that shopping centres need to be adaptable and they also need to create a destination. E-commerce is here to stay and, if the current state of play is anything to go by, it is only going to rise and rise. In order to remain strong players, malls need to incorporate new forms of technology to keep their space both up to date and engaging. Inherently mankind has a desire to connect and socialise, they may be able to buy groceries, clothes or even a car at the click of a button, but this does not provide a shared experience or opportunity to interact. There is still room for more than one kind of shopping, the trick is understanding your customer's needs and how best to cater to them. The retail cycle is only going to continue.
Keep an eye out for Future of Fashion Retail in our next issue. But for now, why not catch up on our article on Pop-Up Stores? An investigastion into the retail format taking the world by storm.