The reality is that retail innovation has remained stuck in the 20th Century for far too long, what's needed today is to reinvent what was in order to build out a brave new future.
In order to create the illusion of brand value and FOMO (fear of missing out) there is a model of scarcity that has ran through the luxury sector for sometime. Short production of a product combined with a 'celebrity influencer' wearing or using said product drives the 'must have it' crowd into a frenzy.
Today we see ongoing stories about supply chain issues including Nando's and McDonald's all a result of the nationwide shortage of HGV drivers created (we are told) by Brexit. As usual there are also a few click bait headlines informing us that Christmas in the UK could be cancelled due to product shortages as a result.
Many business sectors have had to deal with a short supply of customers, let's take a look at 2 sectors that have taken a right royal kicking from a combination of retail stagnation and the acceleration of covid to highlight the lack of innovation.
With air travel somewhat restricted and passenger numbers at their lowest point since 9/11 it's creating the inevitable ripple effect on the Duty Free sector, along with the supply chain and associated retailers with the looming job losses occurring as a result.
In the case of London Heathrow, the second busiest international airport in the world, passengers were down 60% to 15.4 million whereas retail—including elements such as car parking and catering—fell by 56%.
Not good reading at any time but - is this an opportunity for the department store sector to look to innovate and save itself and work with the experts in travel retail?
As usual it's something that seems to be gathering interest and pace in many major cities in China.
The rush of interest in China’s domestic duty free industry is linked to the 13 March announcement issued by 23 departments including the National Development and Reform Commission and the Ministry of Commerce. This outlined a program to jointly develop China’s tax and duty free industry with the aim of building a well-rounded ecosystem “with Chinese characteristics”. (link below)
Just imagine that if tomorrow's refreshed and innovative department store could be granted a license to sell 'Duty Free' goods.
This is a realistic solution that leverages the existing real estate, can engage consumers via free to access, free to use social networks with employees becoming part of the social strategy.
Throw into the mix 'live streaming' from the store to build a brave new future and your getting closer to a digitally connected social savvy consumer.
To do this will require collaborative input from many stakeholders to take a long hard look at what a 'leverage and build' strategy can do to get things moving again.
Would this get people out of their 'safe bubble' and out shopping again?
I guess there's only one way to find out!
Wang Guoping, a member of the Senior Advisory group of Lian Shang.com told International Finance News that the odds of leading department store groups entering the duty free arena in first-tier cities such as Beijing and Shanghai are relatively high. However, he suggested that their focus might be on less-established brands than those found in existing duty free stores to avoid market turmoil.
unknownx500
