the future of fashion retail abheek singhi, senior partner … · the future of fashion retail...

The Future of Fashion Retail

Abheek Singhi, Senior Partner and Director

15 March 2016

India Fashion Forum 2016.pptx 1Draft—for discussion only

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Predictions about the future are dangerous..especially in the short run

Global financial crisis Elections 2009/2014.. Weather


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India's consumption to increase 3x this decade

INR '000 Cr

2010 2020

2,181

392

1,237

326

1,117

472

858

6,590

5,952

1,496

5,001

1,217

4,416

1,968

3,791

23,8343.6x

4.4x

4.2x

3.9x

3.8x

4.0x

3.8x

2.7xFood1

Clothes and footwear

Housing and Consumer

durable2

Health

Transport and

Communication

Education and Leisure3

Others4

TOTAL

1.Includes spend on Alcoholic beverages and tobacco (excludes food sold by catering services such as restaurants, hotels, kiosks, etc) 2.Includes spend on Utilities, homecare products, servant salaries, consumer durables, home renovation, rent3.Includes spend on Internet, entertainment (picnic, eating out, etc), children education 4.Include: Personal care, baby care, EMI, loan payment, Holidays, social gatheringsSource: Euromonitor, NSSO, India Retail Report; BCG Indian Consumer Survey, N=6278, BCG analysis


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Three big questions

Formats

Categories

Capabilities


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The ABCDE of what consumers want

E

Experience

A B

AvailabilityBreadth of

assortment

C D

Deals &

discountsConvenience


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The new consumer wants to break the compromise

Spend AND save

Traditional AND modern

Blend in AND be distinctive

Comfort AND style

Convenience AND experential

Touch and feel AND digital


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The rise of new categories will happen at the intersection


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There is no separate online or offline world

Procurement journey – e.g. buying a pair of jeans

Physical In StoreStores

PhysicalOut of store

Digital

In

Store

Digital

Out of

Store

• Product information kiosks

After leaving the store, goes on a social media website to give

feedback, care instructions, etc.

Customer notices an ad for seasonal offers and goes online to

find a pair that they need

Customer aware of products by advertising, or through word of

mouth

Customer checks social media product reviews on their iPad on

the way to the storeCustomer uses an branded digital

App on mobile device to locate various jeans options in-store

Back at home, they check loyalty points balance on their device and see offers for them at local store

Buyer uses cart-based self-checkout to purchase

Customer notices in-aisle promotions

Sales made in stores, but influenced by online channels

Research Locate Shop Post-

purchaseDelivery

Customer tries on the jeans in store


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10 years

0

200

400

600

800

1,000

1,200

1,400

20102007 2009 201520142011 2012 201320082006

Indexed stock price

Walmart Macys NordstormAMAZON BEST BUY

Note: Base = 100Source: BCG ValueScience

Long term view : Clear winner


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0

50

100

150

200

250

300

350

400

450

20152014201320122011

Indexed stock price

AMAZON BEST BUYNordstormWalmart Macys

5 years

Medium term view : The answers change

Note: Base = 100Source: BCG ValueScience


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Retailers are going omni-channel

US : 8/10 of top e-comm players are

retailers

UK : 7/10 of top e-comm players are

retailers

1

2

3

4

5

6

7

8

9

10

1

2

3

4

5

6

7

8

9

10


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Winning in multi channel...

Zara's

new "green store"

• Store features the latest

advances in sustainability:

– Motion detectors to dim

lights when needed

– Thermostats to regulate

heating and cooling

– Air curtains at entrance

door to prevent hot or cold

air from entering

• Wood materials used inside

were sustainably harvested

New Balance's "experience

store"

• Store designed to reflect the

heritage and spirit of the

century-old brand

• Shoemakers assemble

sneakers in real time in the

upfront space of the store

• Each pair sold in special

“Assembled in NYC” bag

stamped with the edition

number and date made

Apartment 32's

"chic apartment store"

• Store resembles a chic city

apartment, featuring a couch

and kitchen counter

• Customers are referred to as

“house guests” and can relax

on a couch and sip espresso

while shopping

• Store has “no-talking on

smartphones rule"

Source: News searches, sprignwise.com


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...as well as use different types of "Retailtainment" to engage

customers during the purchase process

Climbing and hiking

at Globetrotter

Fashion advice

at Topshop

Trial gear and showers at

Adidas

• Adidas' runbase store in Tokyo

uses "tryvertising":

– customers can borrow

shoes and clothing to try

then on a running track

• Store is also a running club

that Includes shower cubicles

and lockers for rent

• Expert staff on hand offers tips

and recommendations

Source: News searches, sprignwise.com

• Topshop's Oxford Circus

flagship had famous fashion

designers, stylists and

models give fashion advice

to Topshoppers

• Advice was offered through a

unique, interactive mirror

installed on the ground floor

• Globetrotter stores feature

experiential elements:

– Rock climbing wall

– Different floor surfaces

– Pool for kayaks & canoes

• Enthusiastic staff with

expertise in specific sports

offers advice and passes on

interest for other activities


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