Blog: ICSC Conference in Barcelona calmed fears of the retail apocalypse, but introduced new buzz words: Phygital and GenZ
The agenda of the conference was full of interesting topics about retail and the shopping centre industry. I would like to share with you a couple of the themes which I found particularly interesting.
Phygital is the new omnichannel
During recent years, we have heard a lot about omnichannel. Now a new term was launched: phygital.
According to Ken Hughes, a leading expert in consumer and shopper behaviour, and Philippe Journo, CEO of the Compagnie de Phalsbourg, “phygital” means the combination of physical and digital in retail. For the younger generations, there isn’t a clear line between online or offline shopping; they expect phygital solutions. (And it’s not enough that you simply bring an iPad into the store.)
The store is part of the customers’ purchasing journey, not an alternative to digital. Online ease is complimented by an offline experience, but stores need to be multi-purpose. Recent examples of successful phygital solutions are AmazonGo, Alibaba Smartstore and Hema.
I was happy to visit an AmazonGo store in Seattle last summer during my holidays. My experience suggests that the end thought and planned concept were what really offers the consumers a convenient and efficient customer experience.
Click and Brick combines online and offline
You can also forget the phrase “Click and Collect” because now we talk about “Click and Brick”, a combination of offline and online shopping. Click and Brick can be either a “traditional” pick-up point for online purchases from brick-and-mortar stores, or the solution in which the online experience offers extra services and features to the offline shopping experience. Interesting examples of Click and Brick were seen from Fossil and Charles Tyrwhitt.
GenZ – stronger influencers than Millennials
The biggest influencer and consumer group is no longer Millennials but Generation Z, born between 1995 and 2009. GenZ has fundamentally different expectations towards retail. They expect to have continuous connection at all times, instant responses, constant change, customisation and emotional connection.
These demands have led to the rise of completely new concepts: clothing-renting like Le Tote (which has rented more than two billion dollars worth of clothing!) and robot restaurants, where the robots cook fresh food, are interesting examples.
When Alibaba announced that they would launch the brick-and-mortar chain, I knew that retail and shopping centres would survive.
Armageddon or renaissance of retail?
The future of retail and shopping centres is, of course, the topic not easy to avoid at events like this. There was a good debate on the theme between Bill Kistler, Managing Director of Europe, the Middle East and Asia (EMEA) for ICSC, and Peter Wilhelm, CEO of Wilhelm & Co. Bill Kistler reminded us that the retail sector has experienced dramatic changes over the last 5,000 years. Hence change is not anything new for the retail industry.
The biggest reasons behind this current shift are technology, of course, but also the change in consumers’ values and expectations. Changes have forced retailers and shopping centre owners to innovate, and concepts have been developed faster than ever before. This is the positive outcome of these shifts and shows that the industry is capable of adapting according to the changes in the business environment. Imagination has become a superpower for us; if you have that superpower, you will survive.
Peter Wilhelm pointed out that it is important for taxation and regulations to be equal for online and offline operators to create a fair business environment for both business models.
CEO of Unibail-Rodamco-Westfield, Christophe Cuvillier, summed it up very well: “When Alibaba announced that they would launch the brick-and-mortar chain, I, at the latest, knew that retail and shopping centres would survive”. There will be a need for both online and offline retail in the future.
Sources: Keynotes in ICSC European conference and exhibition