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The Roaring Twenties: How Global Retail Brands Will Stay Relevant in 2020


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The ‘Roaring Twenties’ refers to the decade of the 1920s - a time of economic prosperity. Social, artistic and cultural excellence reigned, jazz blossomed, fashion changed and women got the vote. We’re hopeful for a similarly transformative decade, but with many retailers closing in 2019, how can we ensure we stay relevant? The 15 global FITCH studios collaborated to unpack best-in-class retailers and what it could all mean for retailers in 2020. We’re pleased to present this summary of our findings.

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The Roaring Twenties: How Global Retail Brands Will Stay Relevant in 2020

  2. 2. The dawn of a new decade brings new challenges 2019’s retail winners are here because they managed to stay culturally relevant and stand out for the right reasons. At FITCH, we are always designing the future: future experiences, future memories, the future of retail. As Millennials’ and Gen Z’s pockets get deeper, smart retailers are always changing to stay relevant. FITCH’s 15 global studios collaborated in December to unpack best-in-class retailers, using past learnings to explore what it could all mean for retailers in 2020. This report is a summary of our findings. We hope it helps your business as we enter this new decade together. © FITCH 2020 FITCH for 2020  2
  3. 3. In 2019, it looked like the end for some… 9,300 Retailers closed their doors in the USA 106,000 Retail jobs were lost due to failing stores in the UK 150 Nike stores closed in India by November 2019. ...but smart retailers are growing 0.9% Sales volume growth of Mercedes-Benz from 2017 to 2018 €26.9 Bn L’Oréal global sales, a 7.1% increase from the previous year 51% Revenue increase that The RealReal saw in Q2 of 2019 alone  ↓ ↑ ↑ ↑  ↓  ↓ © FITCH 2020 FITCH for 2020  3
  4. 4. Brand new decade, new brand behaviours Is it time for a new ‘Roaring Twenties’? We’re hopeful for a similarly transformative decade, but with many retailers closing in 2019, how do retail brands stay relevant? We identified three key themes... 01 SHAPESHIFTING 02 CONSCIOUS CONSUMING 03 CULT COLLECTIVE © FITCH 2020 FITCH for 2020  4
  5. 5. 01 SHAPESHIFTING  5
  6. 6. MERCEDES-BENZ Mercedes-Benz knew some drivers wanted to have a car without the commitment of actually owning one. The brand’s subscription service ‘Collection’ allows customers to access a fleet of cars according to their weekly needs. Going to the countryside? Take a SUV. City break? Nab a coupé. Mercedes-Benz has now evolved from pure ownership to also offering a subscription service, giving car lovers a stress-free, exciting way to belong. THE OWNERSHIP/SUBSCRIPTION SHIFT → © FITCH 2020 FITCH for 2020  6
  7. 7. THE REALREAL Way more than just a website The RealReal is the leader in authenticated luxury consignment. Using physical spaces to bring its digital offer to life, the brand gives free valuations, personal shopping experiences and consignment delivery. ←  GLOSSIER Beautiful faces and selfie spaces Social sharing inspired the entire Glossier brand and retail strategy. From selfie-perfect mirrors and secret canyons, to #impeccable flower arrangements.   ↑  RENT THE RUNWAY Coffee and clothing “Sometimes women need to find beautiful clothes and get shit done simultaneously.” Maureen Sullivan, COO. Which is why Rent The Runway has a co-working space, salon and coffee shop alongside a rentable wardrobe. THE DIGITAL/PHYSICAL SHIFT → © FITCH 2020 FITCH for 2020  7
  8. 8. THE TRADITIONAL/CONTEMPORARY SHIFT CHANEL Fun and games This travelling beauty and gaming pop-up allows consumers to relive childhood memories while exploring Chanel beauty products. TIFFANY CO Style Studio The Style Studio in London encourages creative interaction and play. Consumers can put their own spin on Tiffany classics, while enjoying a diverse programme of events. NIKE Light the way Nike built the Unlimited Stadium in Manila, the worlds’ first LED running track. Following the Lunar Epic’s footprint, the track takes over an entire city block, allowing the runner to compete with an LED version of themselves. © FITCH 2020 FITCH for 2020  8
  9. 9. THE SAFE/SURPRISING SHIFT HEYTEA Afternoon cheese? Naigai cha, or ‘Cheese tea’ has changed the game for this Chinese tea retailer. Topping a traditional Chinese traditional drink with cheese has given customers a fresh way to connect with cultural traditions. MUJI Keep it clean Muji’s “No logo/No Brand” policy has brought Japanese minimalism to the mainstream. The brand has focused on widening its product range and shifted into interesting areas such as homes, hotels, florists, cafes, and even campsites. RELIANCE INDUSTRIES Widen your net Acquisition and organic growth has transformed India’s Reliance Industries from a B2B player into a towering consumer-facing giant involved in nearly every industry; from supermarkets, to clothing, to toys - with the brand recently buying Hamleys toy shop in London for an estimated £68 million. © FITCH 2020 FITCH for 2020  9
  10. 10. WHAT WE KNOW Shapeshifting keeps brands fresh and front of mind in 2020 © FITCH 2020 FITCH for 2020  10
  11. 11. 02 CONSCIOUS CONSUMING  11
  12. 12. In an increasingly ‘woke’ world, it’s surprising that fast fashion houses, both online and offline, grew at an alarming rate in 2019. The profit surge of such retailers is hard to ignore, but the desire to be chic and environmentally and socially conscious has created a modern dilemma. One FITCH colleague summarised: “I think the trade off between fast fashion and ethical shopping is only going to polarise in 2020.”  We expect the conversation around ethical retail to grow in 2020. The environmental impact of retail, from waste to the role of animals, will dominate. Everything is up for review; from logistics and transport of products, to the treatment and wages of employees along the entire supply chain, through to the point of sale. According to the Retail Industry Leaders Association, 93% of consumers expect more from their favourite brands to support social and environmental issues. Ethical retail and sustainability is now expected. © FITCH 2020 FITCH for 2020  12
  13. 13. Consumers are becoming increasingly conscious. The growth rate for ‘fast-fashion’ brands is on the decline as consumers look for ways to do better for people and the planet. © FITCH 2020 FITCH for 2020  13
  14. 14. MORE SUSTAINABLE TALK, MORE EFFECTIVE ACTION PATAGONIA Clothes-free zone One of Patagonia’s latest retail spaces is a café where like-minded individuals come together to take action on various environmental causes. EVERLANE Transparent teaching “It’s really about being able to help the communities we’re going into, and if they want to buy a pair of pants then great.” said Tara Shanahan, VP of retail at Everlane. Everlane educates customers on how to make fashion better. KIEHL’S Leave your mark For each empty, full-size container a Kiehl’s shopper brings in-store for recycling, they receive one stamp. Once they’ve racked up 10, they receive a free travel-size Kiehl’s product. © FITCH 2020 FITCH for 2020  14
  15. 15. THE REALREAL Calculate the difference As the leader in authenticated luxury consignment, The Real Real partnered with some like-minded brands to create a ‘Sustainability Calculator’ to encourage buyers and sellers to see the positive environmental impact of consignment. ←  STOCKX Drop in to win Trainer trader StockX use retail to offer planet-friendly pick-up and drop-off sites. Customers can deposit the products they’ve sold and get paid on the spot. Each site offers exclusive prizes available to win through gamified competitions.  ↑  ALLBIRDS It’s all good Allbirds use retail to tell the story of it’s sustainable footwear. The walls are adorned with the brand’s process of creation and commitment to sustainability. Breaking down all the component parts of the shoes highlights their benefits. TELL A GOOD STORY OR LOSE YOUR VOICE → © FITCH 2020 FITCH for 2020  15
  16. 16. GETTING IT RIGHT FROM THE INSIDE-OUT PICK N PAY Tasty change Pick n Pay is the first retailer in South Africa to introduce ‘pick ‘n weigh.’ The effort to reduce its footprint encourages customers to bring their own packaging, making them eligible for discounts and reducing their own waste at home. SOLEREBELS Soles with soul Considered the world’s first World Fair Trade Federation  (WFTO) and FAIR TRADE certified footwear company, soleRebels products are handcrafted by Ethiopian artisans using hand-loomed fabrics and recycled tires for soles. The brand and its minimalist retail spaces are taking the world by storm. LUSH Animal lovers Proud pioneers for animal rights, Lush has been transparent about its animal testing policy, which states that the brand: “does not test on animals, does not use materials that contain animal derivatives that are unsuitable for vegetarians, and only buys raw materials from companies that are not involved in the use of animals for testing.” © FITCH 2020 FITCH for 2020  16
  17. 17. Change needs to happen faster Rent the Runway, Everlane and resale platforms like Depop and The RealReal epitomise the swing back against fast fashion brands. Lush and The Body Shop have revived the adage of “reduce, reuse, recycle.“ But the real truth here is that society is shifting quickly. Today, sustainability isn’t about shouting if you do it, it’s about being shamed if you don’t. Endless waste production and poor factory conditions will rightfully be under scrutiny in 2020. Retailers whose purpose and messages weigh stronger with  a more ethical audience will go the distance.   © FITCH 2020 FITCH for 2020  17
  18. 18. WHAT WE KNOW Conscious consuming drives consumer sharing in 2020 © FITCH 2020 FITCH for 2020  18
  19. 19. 03 CULT COLLECTIVE  19
  20. 20. With a desire to belong to something bigger than they are, Millennials and Gen Z are looking to their communities to guide them. In 2020 we’re going to see this sense of community manifest through retail. What else would make people queue for hours in the freezing rain to buy a handbag everyone else already has? Why else would anyone spend an entire day watching videos of YouTube influencers ‘unboxing’? In 2020, there’s something for everyone. THE GREATEST RETAIL CREATES CULTS, NOT CONSUMERS © FITCH 2020 FITCH for 2020  20
  21. 21. Retail as a centerpiece for community has evolved far beyond having a coffee machine by the checkout counter. Retailers have recognised they need actionable experiences for niche audiences, building around the lifestyle the products help create, rather than the products themselves. Many brands have realised that brand devotion needs followers, and followers are always going to need something or something to inspire them and lead the way. Usually something ‘new’. BUILD IT RIGHT, AND THEY WILL COME © FITCH 2020 FITCH for 2020  21
  22. 22. SELFRIDGES FAR OUT The Selfridges Skate Bowl in London acts as a hub for skate culture and fashion. Always holding inclusive and welcoming events, this experience has bought fresh new customers into Selfridges. ←  IKEA Feel at home In its latest city spaces, IKEA plans to teach consumers how to live more sustainably. The brand has a ‘sustainability lab’ and a yoga studio to fit with this new focus. The meatballs are still available too. ↑  SUPREME Desire through limitation Supreme manipulates the supply chain to create competitive demand for limited products and secret drops of hits. The brand finds growth through the cultivation of its devotees. Websites, blogs, forums and content creators drive success and promote the brand’s embrace of unique urban fashion. BUILDING COMMUNITY PLAYGROUNDS → © FITCH 2020 FITCH for 2020  22
  23. 23. EXPERIENCE, BOUND IN AN APP DEPOP User-generated content slays The world is connected through social media, and Depop has created a sense of community for everyone (even if they’re not looking for something to buy or sell), allowing people to become content creators and interact with others. UNIQLO Be the face At Uniqlo, customers become influencers. The brand has partnered with Tik Tok to find models for Uniqlo’s stores. A chance for in-app creativity and also the possibility of more followers and social dominance. GLOSSIER Click and connect Turning social chatter into actual sales is tricky on a platform like Instagram. Young people shopping online are still twice as likely to buy something from a brand’s website than through a social platform. Glossier decided to create its own version of the platform on the Glossier app. Users can share their own photos along with Glossier product reviews. From here, other users can buy Glossier products. © FITCH 2020 FITCH for 2020  23
  24. 24. WHAT WE KNOW Brands need to build a cult collective to rule in 2020  24
  25. 25. THE POWER OF 3-TAIL  25
  26. 26. The super-performing exceptions in 2019 were those retailers who were able to combine multiple brand behaviours. Depop, Reformation, New Balance, IKEA, Off-White, Burberry and The RealReal all managed to show 2 or 3 of the behaviours working together. Shapeshifting keeps brands fresh and front of mind Keep on moving. Be flexible, dynamic and change with your customers. Don’t forget to surprise them sometimes. 01 02 03 Conscious Consuming makes for consumer sharing Believing in a cause great, but now, action is expected too. Make shoppers feel good about choosing your brand. Build a Cult Collective to rule The cult speaks for itself, and with the right encouragement they’ll do the content generation and recruiting for you.  26
  27. 27. DEPOP MAKES A DIFFERENCE IN THE REAL WORLD Depop is the social selling platform focused on the up-cycle mentality. Mainly run through a truly social app, the platform empowers all users to become content creators and influencers. The brand hosts events for followers, pushing the community to grow in the real world conscious. New stores are physical manifestations of the brand, a chance for Depop to showcase what the app does.   DEPOP CULT   COLLECTIVE CONSCIOUS CONSUMER SHAPESHIFTING © FITCH 2020 FITCH for 2020  27
  28. 28. Partnerships appeal to consumers’ interests in fresh, unexpected ways Success in 3-Tail can also be realised through considered brand collaborations. Libby Riddell, Designer at FITCH Columbus, and part of the FITCH Must See Team notes that: “Brands need to understand where their shoppers are when they aren’t in their store, and what experience will bring them in at this time.” If a brand wants to address the needs, desires and hobbies of its customers, pairing with another brand that complements the experience can re-engage customers and bring an unexpected but appreciated disruption to each brand’s category. © FITCH 2020 FITCH for 2020  28
  29. 29. REFORMATION AND NEW BALANCE REINVENT THE CLASSICS #REFBABES Eco-friendly fashion brand Reformation, known for its carbon neutral production footprint, collaborated with New Balance to reimagine three famous models: 574, 997W and x90. Every pair was made with environmentally friendly materials, from soles to laces. The success of the collaboration has brought these models back to life for New Balance, and drawn in Reformation’s “#RefBabes,” while giving fans of both brands something that helps them stay both active and stylish.   REFORMATION x NEW BALANCE CULT   COLLECTIVE CONSCIOUS CONSUMER SHAPESHIFTING © FITCH 2020 FITCH for 2020  29
  30. 30. FASHION YOU CAN’T WEAR. IKEA X OFF-WHITE WELCOMED VIRGIL ABLOH’S FANS HOME WITH MARKERAD Ikea and Virgil Abloh came together like furniture shoppers had never seen before. While Gen-Z and millennials may be price-conservative with homeware purchases, they will be the first to shell out for the latest Off-White drop. This brand unity therefore provides a gateway and a legitimacy for consumers to push their indulgent nature into new categories, opening up intrigue and awareness. SHAPESHIFTING IKEA x OFF-WHITE CULT   COLLECTIVE © FITCH 2020 FITCH for 2020  30
  31. 31. Other success stories: Burberry X The RealReal join forces to promote a circular economy Supreme has birthed a cult that queues for limited supplies Sephora keeps the wellbeing of the planet in mind while inspiring cult following Louis Vuitton X Riot Games brought two major players together Nespresso and Caran d’Ache bring communities together with their trash © FITCH 2020 FITCH for 2020  31
  32. 32. Don’t be a fast fashion house. And if you are, it’s definitely time to evolve! It’s no longer enough to talk about sustainability – really do it. Keep things fresh and interesting for your customers. Move and grow with them and they’ll reward you by becoming your biggest cheerleaders. Never believe your brand is an island. Stay open to partnerships – customers are more interested in products if two brands with reflective values and offers get together to offer a new experience.  WHAT HAVE WE LEARNED ? © FITCH 2020 FITCH for 2020  32
  33. 33. Experts in experience. FITCH is a global design consultancy – experts in the ever-changing space where customer meets brand. We use data to codify experience across every dimension: physical, human and digital. By uniting all three, we generate love for your brand, and growth for your business. Now, and over time. This is Designing the Future. MAKE IT HAPPEN  33