Future of Visual Merchandising - 5 Things You Need To Know, Now.

In the last two years, retail businesses around the world are being kept on their toes with the relentless emergence of online competitors. Many brick-and-mortar retailers have reacted by jumping on the bandwagon, creating an online presence for themselves. Others launched programs aimed at improving services, product quality and value as well as consumer loyalty. While many brands found the road to success (or survival in some cases), one area of the retail business remains a mystery - the future of Visual Merchandising.

Visual Merchandising (VM) is the practice of developing and implementing 3D displays and floor layouts within a store that entices and attracts shoppers with the objective of closing a sale. Reading this alone is as mysterious as finding the answer to why we still require VM.

The issue is - the current practice of VM is regretfully but inevitably, becoming irrelevant. 

Fundamentally, VM has not changed much. Quite obviously, it's the retail environment that changed, in every exciting way. To the point where businesses are finding it exhausting to catch up. To know what lies ahead for VM and what kind of role it plays, one needs to understand the following 5 points.

1. VM Needs A New Boost

VM is an art and will continue to be a sought after piece of art if you can master it.

You use it to accentuate the DNA and characteristics of your brand. Bear in mind that many brands are technically trading commodities if you strip them bare. There's hardly anything incredible or special in most products, per se. 

Over the last 5 years, retailers have been pressured to deliver top and bottom lines and severely sidelining several other gears of the business. VM is one of them. During these years, we see uneventful and disengaged displays and in-store presentations, not to mention, weak and hollow customer journeys. It led to the cookie-cutter set-ups across many high street brands. 

The challenge now is to pierce through this fog of mediocre VM phase and find new purpose and dignity that defines VM excellence. The ability to do this will help articulate the brand philosophy to consumers. This needs to be a top-down management direction, fuelled with conviction and perseverance. Retailers with foresight will appreciate the rewards it will bring.

2. Knowing Who is Your Customer

According to Jing Daily, by 2020, Generation Z (mostly those who are born in this century) will form 40% of total pool of consumers.

This is by itself quite impressive, not even including the Generation Y. A piece of good news - research from IBM's 2017 "Uniquely Generation Z" studies suggests that Generation Zs are more likely to make a purchase in a brick-and-mortar store compared to the Generation Ys. This is music to the ears for retailers with physical store presence. However, technology heavily influences their in-store purchase patterns, which we will discuss more in the next point.

Today's marketplace highly suggests that majority of retailers and VMs are not marketing to the right consumer. A member of Generation Z is someone around the age of 20. What we think will not appeal to them is exactly what they are looking for. When text messaging was first introduced in the 90s, few believed it would ever compete with voice calls. But look where we are now.

The barrier here is to think in their world, for they may not be the ones with the highest disposable income right now, but they will be in the near future.

Once you know who they are, what they like, how they like to spend their time and money, their friends, their rituals and their individualism, you will start to attract them and build an earnest affiliation with them. This applies to VM. Your new customers do not necessarily appreciate a well-styled mannequin or promotional signage. They would be more keen to know what their friends will think of them wearing that outfit, right there, right now.

How can we facilitate that?

3. Embrace Omnipresence

Face it, this song has been sung many times. Omnipresence is here to stay.

It is something every retailer must accept and embrace it wholeheartedly. In fact omnipresence, or some call it O&O (offline and online), will likely become an obsolete word by the mid of next decade, simply because it will be nothing special.

Retailers who understand this waste no time in rolling out such projects. Take the recent launch of Valentino's Candy Stud handbag campaign. Valentino created a stunning pop up store in Sanlitun, Beijing that was beautifully merchandised and decorated. What's more groundbreaking was their collaboration with Alibaba's Tmall platform to create a digital version that literally mapped the physical pop up store onto the virtual dimension, down to the way each handbag is being displayed on the virtual display showcases.

Does this mean that VM now has a digital obligation to dress up virtual shops and design its customer journey? We may not know for sure, but it is definitely interesting to see where the line draws for VM in the future.

4. Technology Brings New Visual Possibilities

Technology has got to be the biggest game changer for retail as well as VM.

One of the reasons why many VMs are left wondering what's left in Visual Merchandising is the seemingly slow onboarding of new VM tools and assets. Window displays, mannequins, bust forms, entrance WOW zones, colour coordination are all but just a few VM tools. With many tech companies emerging in the US and China, there is a whole new world of VM applications waiting to be implemented in brick-and-mortar stores.

Take Zara for example. Key Zara stores around the world have ditched their traditional window displays in spring this year in favour of a digital fashion show. What seemed like a blank window space with the words 'Shop The Look' was indeed a "live" fashion presentation when viewed over a smart phone. Hot spots within these stores also give the chance for international well-known models to parade literally in front of you, on your smart phone of course.

This strikes the cord with the Generation Zs when you know smart phones are their BFFs.

Another brand that played this to even greater effect is Gucci, who presented their 2018 Hallucination campaign across a whole spectrum of new media, starting with an ethereal and hypnotic window display that provided escapism to their audiences into the virtual world of mystical art using augmented reality.

Such delivery of customer journey often begins at the store. Back to the point when we said mastering VM will allow you to articulate your brand philosophy to the right note - this is probably one great example.

Though not as advanced as Zara or Gucci (yet), brands like Louis Vuitton and Tissot have recently opened stores that forgo the tradtional window displays. In place are expansive LED screens that flank their main entrance. Luring moving images projected on these screens replace the duty of the faithful windows, which were once the measures of good VM.

Given this, is the role of VM merging with Store Design? Well, it already is in some companies.

Heard of cloud shelf? This is a shelf where product information such as size availability, popularity rate and pairing advice are flashed on a nearby screen once the item on display is lifted. And let's not even talk about Amazon Go or China's Bingo Box, which undeniably alter the way we grocery-shop and digest consumer information.

Technology is ruthlessly altering the way VMs work and how stores are laid out. Retailers must look forward and be ready for more such inventions and innovations in order to stay ahead and more critically, stay relevant.

5. Elevate the Experience

If you had a chance to take front row at your favourite artist's performance, how much will you be willing to fork out? What's the difference between watching "live" and on a blue-ray?

Admittedly, there are many businesses out there that may not be ready to roll out technologically-driven VM or retail formats today. This however, must not hinder them to strive on another indispensable objective of VM - elevating the Experience.

Let's use Gucci as an example again. The Italian fashion powerhouse opened a one-of-kind show store at Wooster Street in Soho, New York earlier this year. The primary intention is not to transact, but to deliver the Gucci Experience. It's no doubt that a lot of visual merchandising has gone into it.

Impeccably set up with its exquisite dressing suites, theater complete with velvet armchairs and Muzik headphones and 3D screens, Fashion Network's Robin Driver described it as "an innovative retail destination channeling the neighborhood’s artistic heritage and proposing original services and experiences".

It goes to prove that the company firmly believes from top-down, in experiential retail concepts, something beyond what a traditional flagship store can offer. Like how Business of Fashion's Imran Amed put it, "the aesthetic overhaul of the house was mirrored by an internal cultural transformation that places emphasis on passion and risk taking".

Around the world, there seems to be an "apartment-store" concept brewing. Stores like this are styled unlike a typical retail shop. Instead, it replicates someone's home environment and atmosphere. Laura Saunter from WGSN commented, "The trend for residential-style stores began at the end of 2015 when brick-and-mortar stores began to raise their experiential game".

Take Korean brand Nerdy for instance. This pop culture street label has made its flagship store in Gangnam look like a suburban American house. You would not believe you are in Korea once you stepped inside.

If you were to ask for my personal opinion - it's messy and disorganised but nonetheless unique and explorative. Little nooks of products to be discovered, messages of rebel appeal to their audience and of course, irresistably instagrammable.

You can't blame me for not loving it. That's partly because I am not a Generation Z member. Looking at the launch party video will help you understand why it is a cult success. They know who their customers are, what they like, how they like to spend their time and money, their friends, their rituals and their individualism. They have delivered the full Gen-Z experience.

Many more stores like Nerdy have started around the globe in their own rights and direction including Rola Rola (another Korean brand), Goop (founded by Gwyneth Paltrow), John Lewis - The Residence, Casper and many more. Each of them determined to break off from the traditional store format and introduce personal, experiential and innovative environments where you will struggle to find the cash tills, simply because their brand philosophy is not to prioritise customer conversion, but customer satisfaction.

Money is material that can be earned, but sensorial experiences need to be discovered.

Many of what we have discussed above are not revolutionary but we have not looked at them collectively - from understanding the relevance of VM in the future to appreciating the next generation of customers, and how technology has radically transformed consumerism.

Whether you are 16 or 60 years old, you want to know you are not just buying commodity. While more retailers are figuring this out, VM must pace up and evolve together with the industry. In order to remain relevant and succeed, VM must literally look out of the window and tap on new resources to deliver highly desirable experiences.

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This article is adapted from the talk to tenants of ION Orchard, Singapore, titled "Future of Visual Merchandising and VM for the New Age Customer" held on 5 June 2018. About the author and speaker - J-sen is a retail expert with over 15 years of retail and VM experience. He had previously worked at F J Benjamin, Esprit and Al-Futtaim Group, having led key projects across various retail functions. His expertise includes interpreting market needs, understanding consumer behaviours and elevating the brand value of different retail businesses. The opinions expressed are those of the author and do not represent the views and opinions of CapitaLand Retail.