EPISODE 070 : 07/14/2022
Matthew Brown is the owner and founder of Echochamber, a London based creative retail trend intelligence agency. Echochamber advises clients such as IKEA and Nike on best practices in customer experience, store design, consumer trends and innovative technology. As a regular keynote ‘Retail Futurist’ speaker at conferences around the world, Matthew shows how the retail world is evolving faster than ever in his inspiring and entertaining presentations.
Host: Ned Hayes and Ashley Coates
Guest: Matthew Brown
Listen to every episode
Topics discussed in this episode
- Detailed small business insights from Olympia, Washington
- Small business resiliency and adaptation during COVID
- Doubling community outreach during the pandemic
- Opportunities for small business loyalty programs
Watch Spark Loyalty’s Small Business Success Channel
Ned Hayes [00:00:01] Welcome to Spark Plug, where we talk to smart people working at the intersection of business and technology brought to you by Snowshoe. Your smarter loyalty leader Sparkplug is happy to welcome Matthew Brown to the podcast today. Matthew is the owner and founder of Echo Chamber, based in London, a creative retail trend agency with a global reach. Echo chamber tracks global trends, advises clients and best practices in customer experience, store design, consumer trends and of course, innovative technology. So some of their clients even include IKEA, Nike, Microsoft and a variety of other companies. As a regular keynote retail futurist speaker at conferences around the world, Matthew has shown us how the retail world is evolving very fast indeed. So welcome, Matthew.
Matthew Brown [00:00:49] Thank you very much. Well, that’s quite some introduction. I think you’ve summed it all up in one little speech.
Ashley Coates [00:00:55] All right. We’ve done our first job today, so looking forward to chatting with you, Matthew. Let’s actually jump right into a company that you built echo chamber. So you actually started echo chamber as an in-house unit and another company that you were with. Can you tell us how you started your company within a company and how it eventually came to be an independent business?
Matthew Brown [00:01:16] Absolutely. Well, in fact, I actually inherited the business echo chamber. It actually started out as a preexisting design library within a retail design company. And I joined it when it was a library and it was sort of a librarian’s job. But it became clear very quickly that there was a business to be made out of it, both internally with with the design agencies, clients, but also externally as well. So I developed it, saw the potential in it and ran it for a few years and then took it as an independent business. And I’ve been running it now as my own business for nearly 20 years. I think it’s 19 years, but I’ve been doing retail trend analysis since 1999, which is much more than 20 years, but essentially retail design company. The designers wanted to know what’s cool, what’s happening in retail, what are the innovations that are going on? We then fed that to clients and we then fed that to internal clients as part of design projects. But then increasingly clients were coming to us and saying we would actually like the intelligence, but we don’t necessarily actually want to design a specific project. So we would like to do some of that along with competitor analysis. So the early part of the business was really going around and taking secret pictures of shops and writing reports and doing that kind of bespoke competition analysis at a time when taking photos in store was really difficult back in 1998, 1999, 2000, I used to get kicked out of stores and you had to take sneaky pictures. And I, as a professional photographer, was good at getting those secret past. But then the business evolved beyond that too much more trend focused, much more best in class analysis. So rather than just looking at competitors things that if you had a design project and you must say wanting to design a food court, you would want to know what the best food culture in the world looked like. And then increasingly, what are our ideas for other factors that may not necessarily be in your sector, but are great ideas that could be applied to do something that little bit different? Because part of my business is really promoting the idea that you don’t innovate just by copying your competitors. You look much more widely that the emerging trends across all of retail and globally, because you’re going to find some great ideas, maybe in a fashion store in Seoul or a shoe shop in Chicago. There’s all kinds of different ways of getting inspired. So that’s really what the business has grown into over the last 20 years. It’s about retail inspiration and sort of future proofing your business by looking at what’s happening around the world, starting to track where the trends were, where they are now, and where we think they’re evolving to and tastic.
Ashley Coates [00:03:49] Well, I was going to ask for your elevator pitch on your business, and you kind of just gave it to me and started talking about why it’s important for retailers to pay attention to trends. Is this a newer practice? You said that you’ve been looking at trends for 20 years. How has that practice even evolved over that time?
Matthew Brown [00:04:06] Actually, I think the really interesting thing about my business is that it actually mirrors the world of retail, the world of business more widely in that actually my business has become more interactive. So when I first started, clients would pay for me to write a report, to produce it, to send it as a PDF or to print it. And it would land on my desk and I wouldn’t really hear anything from them. And that was absolutely fine. But what increasingly happened was the customers then wanted to have me present it, to present my findings and my thoughts about it, and then present the documents, but also increasingly come in the present to the business, do wider trend pictures, trend presentations. And then the final evolution of it has been the retail so far and up until the pandemic. That was probably the biggest growth part of the business, which was clients essentially saying, let’s get out of the office, let’s get our team together. Let’s travel to an amazing city somewhere around the world. And let’s have a guided tour and see these retail trends in action. That smell, let’s taste, let’s get inspired and then bring those learnings back into the business. And I think that’s what we’re seeing in retail. Far more retail used to be sell us products, put it on shelves, and it’s much more immersive now. It’s much more about education and hospitality and inspiration. And certainly my clients want that experience of trend analysis. They don’t just want dry report sitting on my desk. They want to go out and see it themselves.
Ned Hayes [00:05:28] Right. So it sounds like you have a number of things that you really enjoy about your job. The enthusiasm just comes right out of you. Could you tell us more about being a retail futurist and what that life is like?
Matthew Brown [00:05:39] Well, it’s a very pretentious title. I take a non scientific approach to retail futurism, so I’m not an analyst in that sense, which of course makes it more fun because I’m not pinned down by any numbers. It’s really an observational science and it’s based very much on photographic evidence. So you may not believe what I say, but you can believe the photos that I’ve taken. That’s real proof of real stores that are open, that are trading, that people can either see or they can see from the pictures. And I try and show the evolution and I try and show new concepts as a way of explaining the stories of what I think is happening. So obviously in the taxpayer, if something like Amazon Go opens, that’s clear evidence of an innovation in retail technology. But I know people are interested in augmented reality. I would say look out for examples of that and start to talk about where we’re seeing those emerging technologies. But my job of retail futurist, as you say, it’s a fun job because while I get to do it for travel the world with my camera taking pictures of shots, that is the evidence I look at. I’m not sitting back doing desk research. I’m looking at statistics. I’m looking at real trading retail environments across all sectors food, fashion, technology, sport, the whole lot, right?
Ned Hayes [00:06:51] So your work reminds me of an experience I had at the Portland airport recently where I came in and I saw two shots, both of which provided coffee and breakfast items, and one of which seemed much more appealing to me. And it made me pause because I thought the actual coffee or food that I’m eating I haven’t experienced yet. I have no idea which one serves the better food, but I knew that one was more appealing and I started taking pictures of it, which is very much what you do. I started trying to analyze what aspects make this more of an appealing experience. Why am I gravitating more toward this shop instead of this other one? Is that like what you do?
Matthew Brown [00:07:28] It is. And what I would probably do is deconstruct why that’s happening. What are the signals that are being communicated to you? And there’s some clear, obvious ones. There’s obviously the store design and the merchandizing and the look of the brand. There’s also the storytelling for all the senses, which is the smell that you’re getting. It’s also the aspect of craft. And if you could watch someone doing that craft, it gives you more of a feeling of authenticity and expertize than you might get if you’re just looking at someone pressing a button on a machine. And this is precisely what Starbucks did with that reserve roastery. This is absolutely core to the strategy. It’s amazing retail design, unique place, specific retail designs. They’re taking heritage buildings. It’s bringing the coffee roastery inside the store and making it part of the experience. It’s about making it theatrical. All of those elements together are magic tools that retailers and brands have to make. You choose this coffee rather than that one. It’s a wonderfully complex artistic science, and as you say, it’s very powerful and you haven’t yet tasted the coffee. And it might be that in blind taste, shock number two was better. But if you don’t go out there and buy the coffee in the first place, you’ll never know. So that’s why these signals are so powerful. That’s why retail design and brand and customer experience are as important as they are.
Ned Hayes [00:08:47] Right? It’s not just about what inventory is on your shelves. It’s also about the holistic experience that is being built.
Matthew Brown [00:08:54] Yeah. And look, if you have a real reputation for being super artisanal, you can probably get away with a stripped back store design that’s all about that craft esthetic. But again, that’s still sending actually quite a powerful message as well. At the same time, I’m not sure you would ever see an artisanal coffee that masquerades with the store design of a fast food chain. That would be absolutely difficult for them. That would be the ultimate hipster twist, as it were, of selling the very best coffee in the plastic fast food environment.
Ned Hayes [00:09:25] Well, you’re describing a trend. Whether or not that trend comes to pass is a different question. But I’m curious if you could go further with the trend line prediction. We’re about halfway through 2022. So any trends that you’re seeing this year that are coming to pass or maybe trends that you predicted that haven’t happened?
Matthew Brown [00:09:42] Yeah, I’m not a seasonal trend guy in the sense of there’s a lot of trend agencies out there that predict colors and fabrics and all that kind of stuff. Again, that’s not really what I do. I’m a much more long term trend futurist in the sense of what are the types of things that we’re seeing on the high street in our shopping malls? So I take a longer view approach. But as you say, the pandemic has certainly accelerated a lot of trends. So certain things that I predicted that were going to be coming over the next five or ten years are here much quicker now. And the good news and the bad news. So I’ve been talking to my UK and European based clients about the death of the check out for the last four years since Amazon go opened and they really ignored it. It wasn’t until Amazon Fresh launched in the UK in 2021 and has now opened 15 or 16 of their convenience stores that the UK retailers are now starting to pay attention and now we’re seeing this sweeping revolution of technology. So there’s certainly going to be a speeding up, an acceleration of that tech trend. But in terms of longer term trends with retail, just like the last financial crisis in 2008, where you have lots of empty retail units, we are seeing absolutely the acceleration of pop up retail. So I think it’s one of the great, lovely creative elements of retail, obviously making temporary use of space and doing different deals with landlords, but also an opportunity for established brands to do something different with a retail estate, to take us inventing seasonal, creative, curated approach. And ironically, that’s the luxury brands that have been doing the most of that. And since the pandemic, they’ve really been doing some of the best pop ups we’ve seen in the last 20 years. You think about what Louis Vuitton was doing under Virgil Abloh. Of course, Virgil Abloh will be sorely, sorely missed because he was an incredible creative force, bringing his streetwear casual side into the luxury market. Louis Vuitton has been doing some amazing pop ups and continuing that across the pandemic. Gucci have been doing some fantastic pop ups alongside collaborations as well to some of the big trends that we’re continuing to see our pop up collaborations between brands that you wouldn’t necessarily expect like Gucci and North Face or Gucci and Adidas. Some of the biggest cues that I’ve been seeing in the last three weeks over in Amsterdam on their luxury PC HUF Strat, which is the Madison Avenue of Amsterdam. The only queue outside the store was outside Gucci for the Adidas collaboration. So a big explosion of creativity. And on the bad news side, an acceleration of the collapse of the mid-market. Pandemic has finished off a host of high street brands in the UK. People like Topshop Mid-Market Fashion are department stores. We’ve seen Debenhams and House of Fraser gone over in the U.S., of course, says J.C. Penney. Macy’s looking shaky. Neiman Marcus leaves Hudson Yards. So these are things that we predicted. We’ve said that the mid-market department stores are really under threat. We’ve said only a few of them are going to survive in ten years time. It may be that only few of them survive in five years time.
Ned Hayes [00:12:45] Right. Well, speaking of stores surviving, I know you mentioned the Amazon innovations and in March, Amazon announced they were closing all pop up, all four stars and Amazon books, retail stores and focusing instead shifting over to Amazon Fresh and Go and Whole Foods. So what do you make of Amazon shifting gears and closing their bookstores that I thought were rather amazing?
Matthew Brown [00:13:07] Yeah, I love the Amazon bookstores. Actually, it was funny. I went out to Seattle to look at the first ones they had on the campus. It was a rather charming bookstore. I mean, it wasn’t particularly innovative in the sense of design. It looked much like any other bookstore, but it was nice, but it felt a bit of a distraction. It didn’t really feel like core Amazon. Amazon for Star. I saw in New York when it first opened and I was very, very disappointed. I was very underwhelmed. They actually opened one in Westfield, London in a shopping mall, and it was a much better iteration and it looked good. But I don’t really worry about Amazon’s physical retail. They’ve just opened Amazon style in Glendale or they’re about to. It’s an experiment. They’re just experimenting with retail, and a lot of it is a Trojan horse for the technology. I certainly Amazon go. I don’t genuinely believe that they want to be big global players in food and convenience. I think this is a technology that they’re actually trying to rent out to all retailers, certainly in London. Look, Amazon Fresh opened in 2021, Tesco, then world’s number two retailer. They opened their version using Try Go technology. Aldi, the German discounters, opened their version of just walk out technology using E5. But then Sainsbury’s, who are our number three retailer, one of the big supermarkets, they opened a just walk out technology store using Amazon technology. So Amazon are clearly using some of this retail expertize, much like they did to Amazon Web Services. That’s my personal favorite. I don’t have any hot line into that. That’s just me observing it. And I think really they’re going to be the revolution in retail, but they’re the revolution in the back office. I’ve never thought that Amazon were particularly great at physical retail, which is a pity because I think they’ve got the money to do it if they really wanted to. I’d love to advise Amazon on how to create better physical stores. Maybe they’ll listen. Too many types of advice. But what I love about Amazon is their willingness to experiment. They’ll try different technology at different places. They’ll do biometrics at Amazon go. They’ll use smart shopping carts that used to just walk technology. They will do just walk out technology that uses a chip and pin card like they’ve done at LaGuardia Airport with Smith. They are pinning their hopes just on one thing, and I think that’s positive for all of us, really.
Ashley Coates [00:15:23] We’d love to get your thoughts, Matthew, on a trend that we heard from another trend spotter who we interviewed last fall. We spoke with Kate Trotter, who’s head of Trends at Insider Trends, also based in London.
Matthew Brown [00:15:35] And she’s lovely.
Ashley Coates [00:15:37] I thought you might. We talked with her last September and asked her about predictions for 2022, but also more long term, like you are saying, that’s where you specialize. And she talked a lot about seeing a big shift in how retail reaches the consumer. And she was talking about there being really a new definition of customer centricity in which the consumer almost doesn’t even have to do anything or go anywhere. Retail just comes to them. Curious your thoughts on customer centricity and how that’s evolving and if you see a similar thing?
Matthew Brown [00:16:09] Well, it absolutely is. The bad news, of course, is that the customer centricity is most coming through online retail, through new channels, through shopping, through tick tock, through shopping, through Instagram. I mean, no one’s visiting websites anymore. I mean, it’s a funny old world even in online. If you look at Amazon, of course, with one click shopping, it could not be easier. And of course, the whole world of now learned in the last two years to shop online. So from that perspective, that shopping convenience has never been easier. And all of the things that retail used to do, they used to be a shop window to inspire, and we’re now getting through social shopping at the same time. From my perspective, I’m a guy that supports physical shopping. I support physical stores. I’m interested in the physical store environment. And unfortunately, it is a sad truth that physical shopping is probably not going to be as big in the future as it was in the past, because online is taking an increasing share now. And I’m an online customer massively. I think from my perspective, the physical store needs to change and adapt in relation to this new online environment and absolutely this personal shopping profile. The convenience of shopping online is going to have to be replicated by physical stores if they want to survive. And by that, I mean taking away all of the pain points of physical shopping. So one of the lovely things about shopping online is if you shop with fashion, you already have your profile, you have your sizes, you have everything with a bunch of different online retailers. They only show you stock that’s available and available in your songs. They’re filtering down that choice already, and there is a massive opportunity to increase the personalization of the physical shopping experience in the physical stores. I think retailers are slow to do it, but I think that’s going to be the next big revolution. Obviously, personal shopping is getting bigger and bigger and bigger, more advanced as a service and less purely luxury customers doing it. You see the rise of Nordstrom doing Nordstrom Local based on the Trunk Club, which is personal shopping. But this isn’t a luxury shopping environment. There’s some interesting innovations in London, actually, Matchesfashion.com, which is a big online fashion player. They have their own flagship retail store, which is a townhouse in Mayfair, where you can book a personal shopping appointment. The fulfillment is done from the warehouses outside London by the online player, and then the store is an experiential rented pop up space on the first two floors, personal shopping on the third floor, and then it has a restaurant and café up on the top floor. And it’s also a broadcast hub. So it’s a broadcast hub for the online player. And there’s this lovely combination of the online and the offline, where the offline store is the heart, the broadcast center of the brand and some of the fulfillment is being done by online, but you have a personal shopping experience in the physical body. That to me is where innovative physical shopping will survive and thrive in the future.
Ned Hayes [00:19:02] Fantastic. That’s a really interesting vision. So you mentioned that you believe that online shopping will take a larger and larger piece of shopping in general and will overtake physical stores. And yet the numbers tell us that physical stores are actually resurgent. And there was a bit of an uptick of online shopping during COVID for obvious reasons. But physical stores are still predominant and are still rising in usage. So I’m curious if you can account for that in any way.
Matthew Brown [00:19:30] As I said, I’m not really a numbers guy, but I did look up some of these numbers when you were asking me about it. And I thought there were some very interesting statistics which were that holiday Christmas sales in the UK in 2021 across retail were up 7.3%, which was obviously a massive uplift on 2020 where sales were down 4%. And interestingly enough, that 7% uplift was more than 2018 to 2019, which were only at 2%. So physical retail. Or retail sales were back again 2021. Online sales were down 7% in 2021, against a 46% increase in 2020. However, even that -7% sales was apparently 36% higher than online sales in 2018. So it was coming from a massive increase anyway. So although people were clearly shopping holiday sales last year less online than they had been 2020, it was still across a benchmark of a massively increased one and four physical stores. Holiday sales in the UK were up in physical stores 14%, which was obviously a very positive signal, but it was actually still £3 billion less in total sales than 2018. So I think this ties in to, I suppose what we would all intuitively know, which is pandemic being strange. Clearly we couldn’t go to physical stores when we had lockdowns. When stores opened up again, we were desperate to get back to them. We wanted that. But equally, we’ve all been shopping online far more in the last two years than we ever did. And although that’s come down a little bit, it’s still really quite a lot bigger. So, of course, the big question is, where is this going to go from now? Are we going to continue to see an increase in online and a decrease in physical? And I personally would think, yes, we are going to see an increase in online and a decrease in physical, but probably not at the same rate that we have over the last two years. But equally, it’s a patchy decrease because I think mid-market retail that has boring stores selling stuff that you can get online by going to those stores, we don’t want to show that.
Ned Hayes [00:21:39] You don’t need to go to a physical store to buy items and toilet paper and light bulbs. Why would I need that? I’m only going to a physical store for something that actually creates an experience that I want to renew or I want to experience for the first time somewhere.
Matthew Brown [00:21:52] Absolutely. And look, I’ve been out running retail safari in the Netherlands, in Paris and in London over the past few months, things have opened up and the cities are buzzing again. And in particular, the hospitality and hospitality and retail is back again as a massive force. This is a trend that we’ve seen growing more and more over the past few years. Retailers putting hospitality not just as an afterthought like cafe at the end. It’s actually building it right into the fabric of the building. And we’re seeing this across the world, restoration hardware continuing that drive, false fatality and a wonderful new dollar store with a wine and coffee bar right amid floor. And then the rooftop restaurant like they’ve been doing in meatpacking in New York at the amazing Chicago restaurant, even Homeware stores putting hospitality right back end. And we’re seeing food courts boosting back up. We’re seeing restaurants full and restaurants with that kind of instagrammable social media flavor. So it’s again, it’s not just selling food because we don’t need food. We need these experiences. As you say, it’s about getting us out, having fun, being part of a bigger, wider ecosystem. And I think from a retail perspective, again, that’s probably another of the big trends is that retailers are not necessarily thinking in isolation as much as they used to, but actually grouping together shopping malls, starting to think a bit more like cities and cities starting to think a bit more like shopping malls. So managed spaces, safe experiences, convenient parking, great offers, 24 hour services rather than malls that just close at five in the evening have become zombie malls. These are the type of vibrant, sustainable retail ecosystems that are going to be successful in the future. That old model of retail really we’re going to see fading at times.
Ashley Coates [00:23:33] So curious about the current state of COVID safety measures in the UK and what that effect is currently on retail? Does it feel post-COVID? Is it back up and vibrant? How sustainable do you think retail is looking post-COVID?
Matthew Brown [00:23:48] Well, I would say if you walked around London, you would go, what’s COVID? Yeah, yeah. We’ve absolutely all the restrictions have gone. We’ve been quicker to remove restrictions than any of the other European countries. And it really does feel like it doesn’t exist. There are, to all intents and purposes, no COVID restrictions whatsoever. But we never had the incredibly difficult COVID restrictions that they had in Europe. So I was out in Berlin before Christmas, and every single store you walked into, you needed to scan your digital COVID pass and you couldn’t even be negative tested, so you had to be either vaccinated or proved recovered to get in. There really was very powerful incentives to get vaccinated. You could not be unvaccinated and show a proof negative test. In Berlin at the time, there were the only two things in Milan when I was out there in April, May saw March, April and May, there were FFP. Two masks insisted on being worn inside all retail stores. Again, scanning COVID passes even for retail bars and restaurants were doing COVID pass scanning but this was for all retail in a profoundly changed the. Retail experience, you might queue up outside a store and show your COVID pass for one shop that you really know you want to go into. But if you’re walking along and browsing and you don’t know which stores and you thought you might pop into this store and you see a queue and you’ve got to show your path, you’re just going to walk on by. It’s those friction touch bits that made it most difficult. But we never did that in the U.K. We never had to show private passes in ordinary shops.
Ned Hayes [00:25:23] Here in the U.S., especially in the more progressive parts of the U.S. like Portland, you often still have to show a COVID pass to go into a bar or mini shops. So it’s been unevenly distributed, how people are dealing with COVID around the world. It sounds like I really saw a resurgence in technology usage in retail during COVID for obvious reasons. But one of the big changes I’ve seen is that some of the smaller retailers we’ve talked to seem more open to using customer data and understanding customer data. So do you think retailers are more conversant with data today because of that exposure to more technology during COVID?
Matthew Brown [00:25:58] Well, I’m not an expert on data. And that technology, that kind of back of house stuff isn’t something I tracked quite as much. The only thing I would say is that I think there may be some differences between the EU and us because there’s all the GDPR very, very strong regulations about what data you can use. I have not noticed any real change. If you walked down the street and you said, How is technology change in retail? The only thing an ordinary customer would notice. There’s an awful lot of QR codes around. If I had a conspiracy theory, it would be that the QR code invented COVID in order to be popular because it was technology that everyone talked about in 2011, and then by 2015, everyone was like, Oh my goodness, ten QR codes. I mean, suddenly they’ve come back again.
Ned Hayes [00:26:44] I would have seen that coming. Yeah.
Matthew Brown [00:26:46] Good to see that coming. But again, that touch proved friction free technology was certainly very useful to have during COVID. The good news for retailers is since we’re used to using our own handsets, don’t bother putting big, expensive screen technology inside your store. It’s expensive. It has to be kind of sanitized and see it half the time. It goes wrong and it breaks, so why bother? But the real job of retail is to connect. If you want to do technology in retail, it’s about connecting customers with their own devices. With this online world that you can create, whether that for a QR code or through augmented reality or any other way of doing that. That is the most obvious cost effective one. But there were some lovely stories actually about technology. I do a lot of work in Ireland and the Republic of Ireland deal a lot with small independent retailers. The majority of my clients are big corporate who have departments that want to employ consultants, but I work with a few trade bodies and deal with a lot of independent mom and pop operations and some really lovely stories coming out of the pandemic with really lovely independent retailers, gift shops, homeware stores who had to close during the pandemic, who built their own websites from scratch in 2 to 3 weeks on Shopify, and then use things like Matterport to actually 3D photograph their entire store and create a virtual store. And so Nike have done their own virtual store at the House of Innovation in Paris. But equally, a lovely little mom and pop store doubled, called home. Straight Home did a virtual store, which you can walk around and you can buy. It was the most innovative piece of online retail technology that I’ve seen, and it was done by people with very, very small budgets, and it was done because of the pandemic. And so it was a nice example of how technology isn’t just for companies with big money, big budgets, it’s for everyone. But the costs of innovative technology have never been lower and are getting louder. And another great example that in times of crisis, that’s often when the most innovation actually happens.
Ashley Coates [00:28:47] That’s fantastic. On that note, can you give us any other examples of some of the most innovative new technology that’s being used with the most success in recent years within retail?
Matthew Brown [00:28:58] The big revolution is Amazon’s just walk out technology that is absolutely revolutionary and what they do with the data, they probably are not allowed to do as much with the data as they could do. But potentially this totally transforms how retailers can understand customer behavior. If you could ultimately model every single customer that comes into the store, you know who they are. You know, every buying habit that they’ve had, whether they turn left into a store or they turn right, they look at a cupcake for 45 seconds and then pick it up and then put it back down again. The potential for designing and creating a product mix in your stores becomes a totally different ball game with that type of data. And it’s my feeling that probably part of the attraction of renting this Amazon by other retailers will be some of that data capture that they will make available because that is the huge revolution. So certainly in terms of payment, in terms of a seamless friction free experience for customers. Amazon that is the big technology they. Other nice things going on. Burberry did that social retail concept in Shenzhen in China, which was a partnership with WeChat, where you download a dedicated app on WeChat and you get this little digital egg avatar that hatches. And as you interact with the store, it evolves and you gain points. And so this gamification, like the sort of Pokémon Go of retail, that’s again going to be a very exciting future sort of potential. And alongside augmented reality, where you can overlay a digital world over the physical world again, the sky’s the limit because you’re only limited by your imagination.
Ned Hayes [00:30:37] Yeah, right. So there are some other interesting technologies that I’ve seen in retail stores and some of our customers and some people who we’ve talked to are using this such as livestream shopping. Any thoughts on where those are going and what you think is going to happen there with those kinds of technologies?
Matthew Brown [00:30:53] Yeah, livestream shopping, absolutely. And I genuinely see as I think I touched on before that part of the role of the physical store will be almost as a broadcast hub. It will be the home of the brand where the staff are not just sales tools for the customers that walk into the store, but they’re broadcasting out internationally and online, but they’re proving their expertize. And of course, the cost of this technology is super low in some cases. If you do Instagram live and you’re just running that and as I say, with small independent retailers and lots of them doing that type of thing, a lovely family owned garden center business in Ireland who were doing Instagram live before Christmas. They had Make Your Own Christmas wreath cloth. That’s where they were running, those kind of educational things. What I’m particularly interested in is the combination of the physical and the digital. I’m not a guy that’s just chasing the latest tech. What I’m really interested in is how does that combine to create added value across the physical shopping experience or the online experience? How is this actually evolving it? How is it making the shopping experience more fun or more seamless or more convenient? And I think obviously gamifying retail through technology makes things more fun. Equally, livestreaming is a great opportunity for brands to tell their stories, to show their expertize, to sell you stuff that you didn’t know that you needed. That’s ultimately the biggest job of retail, isn’t it? It’s to persuade you to buy things you didn’t know you wanted and to inspire you and to surprise and delight.
Ashley Coates [00:32:21] I love to chat about loyalty in retail and what loyalty looks like today, especially with e-commerce, like you’re saying, growing online sales and then also omnichannel. How much does loyalty matter today in the customer’s decision making process?
Matthew Brown [00:32:36] And I’m struggling to think of any loyalty scheme that I’m actually loyal to personally as a customer. None of them feel particularly generous to me. Maybe I signed up to the wrong ones. Or maybe they’ll be people there that say, Oh, I’ve got a great loyalty scheme. I used to have a few supermarket loyalty schemes and there would be one where if I shopped all year at the supermarket come Christmas time, I’d say I had enough points to have my whole Christmas shopping for free, and they abandoned that loyalty scheme and they went into a negative state where you get it with your bank and everything else, and it turns out that you spend $1,000,000 and you get a dollar back or something from calling them. It’s the problem with loyalty is that retailers and brands would be very cynical about it and they don’t offer a great experience to customers with loyalty. Airline Miles, the deals are getting worse and worse because maybe we’re not so loyal to airlines. We shop online, we shop for different prices. It doesn’t feel that there’s a particularly compelling offer.
Ned Hayes [00:33:30] If you could design a compelling loyalty program, what would that look like?
Matthew Brown [00:33:34] Yeah, for a start, I don’t want any cards, so please don’t give me a card to put in my wallet. I mean, this is ridiculous. Denise has.
Ned Hayes [00:33:41] To be. Punch cards are done with. You’re saying don’t give me those physical cards?
Matthew Brown [00:33:44] No physical cards. And it has to be digital. And the other thing is, I can see that it’s in the retailer’s interests not to make it easy for me to claim my loyalty points and to collect them. However, if they did, I would be more loyal. So what I want is real time results of loyalty that actually represents my actions where there’s a seamless check in, as it were, between what I’m spending on what I’m earning, that I can see it almost that you gamify it. I mean, there’s a huge opportunity, but one of the nasty tricks from the gaming industry could be applied for force of goods to actually make you feel like, Wow, I’m really getting a real time reward here from that. The other side is not just thinking of loyalty in terms of purchasing, but also the aspect of loyalty of it being part of your personal profile. So it makes your shopping easier so they know what you’ve bought before, but that helps inform future choices so that you don’t have to jump through the same route. So they know exactly what waist size you are and next size of jacket size, and then they filter the choice based on that. So what I would like to see in a way is a shopping portal where if I’m a non loyal customer, I can go for it, I can do all the legwork and I can find a browse. But actually if I’m a loyalty customer, maybe half of that works already being. That it’s just real time suggestions, expert suggestions, maybe things like what Nike do. Nike have probably got the best loyalty scheme in terms of the members app, where you get the free analysis, the ability to then customize shoes within that. That’s the type of loyalty that we want a more fun, more responsive, more easy to use approach and also some connectivity between online and offline. So obviously with some of them where you can scan things in a real store, but it could come through to a digital wishlist. Again, brands starting to think much more holistically about how my shopping journey might work across both physical and digital channels.
Ashley Coates [00:35:38] Well, Matthew, thank you so much for the conversation today. It’s been really fascinating hearing all of your insights with your long perspective of looking at the retail world and especially physical stores. We do have one last question for you, which is what do you want your legacy to be? What would you like to be remembered for?
Matthew Brown [00:35:55] Well, a lot of the work that I do happens behind the scenes, and I get clients coming to me and things where there’s a project, but I don’t actually see stuff being built and there’s only a few occasions where a few projects have actually been built. I’d like to see a few more of them, and I would like also I think of myself as a force for good. You know, obviously I’m selling some business services, but I genuinely believe in physical stores, in physical retail and the shopping experience. And I want our towns and cities to be better places. I don’t want them to be so functional. I want sculpted experiences. I’m all for pedestrianization of some areas and the greening of spaces and the creation of more holistic lifestyle experiences within retail where we live, work and play. If I can go some way towards advising developers and retailers and town planners to do that, then that would be the type of legacy that I would really like to do. And that’s something I’m actually focusing more and more on in the future. Is that kind of big picture how to create real retail destinations rather than just brands working on their own stores in isolation.
Ashley Coates [00:36:59] MM That’s fantastic.
Ned Hayes [00:37:01] Well, thank you so much for the insight that you provided us with. It’s really fascinating to think further about the future of retail.
Matthew Brown [00:37:08] My pleasure. Thank you very much for inviting me.
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