November 1, 2010

Designer Ibrahim talks retail in a digital world

Ibrahim Ibrahim, CEO Portland (photo: Portland)
Ibrahim Ibrahim: Retail designer with a vision
With a name like Ibrahim Ibrahim, the man was hardly going to be boring.      

At the unpretentious head office of his company, Portland Design Associates Ltd., in Clerkenwell/London visitors are obliged to pass through a heart-shaped entrance and glass walls sprayed with the witty comments and jokes of his creative staff.

Ibrahim is a man with a pleasant demeanour, kind eyes, and an internationally recognised retail designer whose work is based on his interpretation of the future consumer.       

This futurist thinker and family man believes he knows how young people on the streets of London, Rio or Tokyo will want to live in ten years' time and what they will be consuming.            

This is an ambitious task and a brave call to make. So let us now consider Mr. Ibrahim's retail flowers.
          

INTERVIEW

Mr. Ibrahim, like other leading retail designers you often demand “retailtainment”, a combination of retailing and entertainment. That’s easy to formulate, but hard to achieve when you are selling staples in a mass market environment…         

Firstly, the do-nothing-strategy is not an option because it means that you are going backwards. If you intend to target and engage a consumer who is currently in their early teens during the next decade, you have no option but to change the paradigm.         

This will occur when it becomes much more usual for consumers to do their internet shopping at the store itself.         

But surely the whole point of internet shopping is not having to shop at the store?         

We don’t make any distinction between online or offline. Our target generation also sees no difference between the two. Their life and their shopping behaviour over the next five years will be part of an always-on or constantly-connected culture.         

What are the consequences of this?         

Once there is a significant uptake of broadband and a major reduction in the cost of sophisticated mobile devices, customers will be able to order online while they are in the shop.         

How will these shop-based online orders be delivered?         

There is talk now in the UK about converting local pubs into pick-up points. After all, they are found in every community and remain open until late. Libraries are also on the decline, but every community in Europe still has one.         

So why not enliven the libraries by making them pick-up points and offering coffee etc.? Petrol stations are also open till late. There are also many community regeneration areas which could be utilised.         

So how in your brave new world of in-store online orders and community pick-up points can you make shopping for staples entertaining?         

There are stories behind every product, however mundane. Let us take a commodity such as kitchen tissues. What is the story behind it which the retailer could give to the consumer? Maybe not quite entertainment, but the retailer could inform the customer regarding bleach content, environmental-friendliness, recyclability, packaging content etc.         

Where and how would these stories be told?         

The future paradigm will be driven and influenced by the change in technology. This will include the deconstruction of the mobile device to the point where key pad and screen become almost irrelevant. Consumer products will project an image that you can touch and interact with.         

For 99 per cent of the time, the screen for that image will be the product itself. Brand products will have a small white square on their packaging which can project an image. This image will enable the consumer to see into it in order to discover its product qualities.         

But that would require a considerable advance in technology…         

Things move fast today and this technology is already in existence. It merely needs economies of scale to leverage unit cost prices.         

So far you have just talked about information. How do you make the jump from information to entertainment?         

I believe that today’s commodity products will not be allowed to take up physical space within retail real estate in the future. They will be available in a store in a different type of way. You will be able to order them remotely and they will be delivered to or collected by you.         

For instance, existing retail spaces will be reutilised. Some big format retailers are already considering selling fruit & vegetables from small farm-type structures within an urban environment.         

Supposing that your vision of the future is correct, what will be the consequences for the retailer?         

Retail shopping space will become increasingly valuable and will be increasingly used for entertaining and interacting with the customer.         

In what way?         

It could be about food, geography, cooking, or meal solutions. If I want to experience a night of Thai cooking, what a wonderful story the retailer has to tell!         

But the next generation of consumers will have very different expectations regarding shopping. They won’t only expect entertainment, they’ll want engagement, sharing and social networking.         

Meaning?         

In the food shops of the future consumers will be able to watch cooking demonstrations, learn how to cook and buy the ingredients which they will either take with them or cook on site. This is already beginning to happen in Japanese supermarkets. So shops will have to redefine their role in this new world very fundamentally.         

Within what type of timeframe do you believe that this will occur?         

Within a decade; had I sat here and used the word “app” just one year ago, you wouldn’t have known what I was talking about. The rapidity of technological advance is going to destroy many industries and bring to life many new opportunities. It certainly won’t stop for retailers!         

You sometimes quote Marian Salzman’s tenet “mindset not merchandise”. Surely, you are aware that the whole of our industry revolves around merchandise?         

Yes, I like being deliberately provocative. Primarily because of the internet, shopping is not going to be about putting products on shelves much longer.         

What then else?         

If a product doesn’t provide me with a story and an overall solution, or if it isn’t relevant to my lifestyle and mindset, then it’s irrelevant in a shop and doesn’t belong in one, because I can order it by other means.         

Mindset is about creating experiences around the merchandise and not just about the physical product. Mindset answers the questions: What does this product mean in my life? What is its story? How is it relevant?         

You obviously define shopping in a very different way to most people…         

What is shopping really? It’s about consumerism, and consumerism at its core is about status. I am what I consume, I am the brand I expose and communicate to people.         

So we are back to the early 1980s and the flouting of brand labels?         

No, there has been a paradigm shift since then. The whole nature of status is changing fast.         

How? Don’t people still like keeping up with the Joneses?         

When there are hundreds of millions of Japanese, Chinese, Korean, Russian, Brazilian and Indian consumers who can easily buy a $100-bottle of whisky, where does it leave the status of my having a $100 bottle of whisky in the West?         

Therefore, status is no longer defined by the mere possession of a Rolex watch or an Audi. It is no longer just about the physical entity, the brand or the physical logo. It is about the consumer’s ability to communicate the story behind the product.         

What are the consequences of this redefinition of consumer status for retailers?         

They must redefine their role and communicate a story to the consumers who buy in their shops. Retailers must equip consumers with a story which will give them status.         

If everyone knows the story, how will they be able to gain status as individuals?         

Consumers will define themselves partly through a story, but also the brand essence will be part of a shared social experience. Therefore, we believe that retailing will splinter into a more specialist, social-network-driven experience. So customers will no longer be just customers, they will also be tribe members.         

An example, please!         

If I am into whisky, I will not only gain status by buying it. I will also share it, talk about it, learn about it, research it etc. We call this “skill consumption”, and this expectation from customers to teach skills will radically change the role of retailers.         

They will be curators of a space in constant flux which will tell different stories in a similar way to museums today. Retailers, in part, will become "space curators", creating bespoke, personalised experiences for customers to share...making shopping about "selves not shelves".         

If mass retailers have to cater for an increasingly tribal consumer base, then they will have to cope with a tremendous amount of complexity?         

I admit to a little exaggeration in order to make my point. Of course, there is always going to be a commodity-based supermarket offer where you will buy food. However, these so-called “niche tribes” are not so niche.         

If I target wine drinkers, that is a lot of people. It is just that the wine experience will be divided. There is a segment of wine customers which is quick, grab and go, but the majority will want an experience so that the actual product purchase will become a secondary activity.         

If one follows what you believe to its logical conclusion, supermarkets will not be able to survive in their present form?         

No, not unless they add something else. They must offer more than bottles on shelves and bread in packets in their wine departments and bakeries.         

Others have said similar things in the past, but few have been able to come up with a realistic alternative. What must supermarket and hypermarket operators do differently in your opinion?         

They must communicate where the product comes from, stress local products and inform customers as to the number of air miles etc. Why are some supermarkets thinking about turning their produce departments into urban farms?         

If communities continue to grow around shopping districts, then fewer miles will be driven by car. What happens then to the car parks? Are big supermarkets going to use them to create urban farms? Let us think about where the world is going and build our shops accordingly.         

We have only talked about food till now. How about other retail categories such as DIY? What’s the scenario there?         

The DIY category has some big challenges, including demographic ones. The new internet generation of consumers will not have the skills the older generation has -- in fact our whole society is being de-skilled. Today’s kids are wizard at working the internet, but don’t know how to cook, repair a car or put up a shelf.         

Many brands are therefore launching products which are much easier to use. For instance, there is now a whole range of adhesive products where you need no nails, screws or raw plugs by 3M.         

How should DIY retailers respond to this “de-skilling” of our society?         

They will have to concentrate on demonstrations and learning. Some DIY retailers such as Focus in the UK now base their whole customer journey around specific tasks. So, you don’t go to a Focus store wanting a nail or a screwdriver, they encourage you to think about the task as a whole, e.g., putting shelves up.         

What is the shopping experience like at Focus?         

The first thing you see when you walk into the store is a whole wall of leaflets like a menu card, and your customer shopping journey starts with a task. Customers then buy the products which will allow them to do the task in hand.        

The next step on from that will be experts available on site who will be able to show you how to do the task in hand. Also DIY stores must offer someone to come and do the task for you.         

How will electronics entertainment retailing change in the future?        

Obviously, increasing digital content and the growing ease with which consumers can download films and music are completely changing this segment. Specialist retailers will have to focus much harder on entertainment, including live performances, and on teaching people to learn to play music or to become DJs.        

Also, there will be a blurring of categories and many specialist retailers will operate from hybrid or “soft” spaces which could also include book, magazine and coffee shops etc.         

Channel blurring has often been postulated by retail experts, but, going back to basics, why must it occur at all? If I want a DVD, I don’t necessarily want a book or coffee?        

Consumers are no longer thinking and buying in terms of merchandise but in terms of lifestyle-based mindsets. We don’t compartmentalise our lifestyles into retail categories.        

And this internet generation will blur its expectations of retail even more than we do. They want to have coffee, read a book, buy some flowers, buy some music, socialise and work all at the same time.        

So we’re talking demographics rather than shopping?        

Work, play and learning are blurring into one great social mix. Retailing has always been driven by social change. Today, the rate of social change is giving rise to a whole host of new questions. What is work? Where is the workplace? Is it on a park bench? Is it in a coffee shop?        

How can retailers continue to operate in all this uncertainty?        

In our opinion, the guiding light for retailers will be learning to treat their customers as citizens first and as consumers second. Retailers will have to treat their customers with dignity and understand their lifestyles before they begin to sell them something.     

Retailers will also have to understand the big shift which is occurring in the way public space is used.        

Why?        

Public space at the moment is designated. Someone somewhere, whether the government, or designers or architects, determines that any particular space or building is for sitting, eating, or working. Increasingly, people are going to use spaces for different purposes than originally planned.        

For example?        

I’ll be sitting somewhere, get my laptop out and start working; geo-tagging will tell my social network where I am; and then a group of people with like-minded interests will collect around me.     

As they arrive, entrepreneurially-minded business operators will send advertising to us, and then, maybe, a mobile coffee and sandwich trolleys. The whole concept of consumerism will become increasingly mobile.        

So, retail space will become public space?        

What is the difference between a park, a plaza, and a coffee shop like Starbucks? Starbucks and other coffee shops are already becoming public spaces. They are places where people hang out, socialise and learn. It’s amazing how the nature of public space is changing.        

But coffee shops have always been a point of social interaction...        

Projecting forward and putting a controversial debate on the table, one could argue that more and more retail categories will become public spaces. For instance, the electronics entertainment retailer of the future will be a place where people interested in music will hang out.        

There they will listen to, download and buy music, have a coffee, learn how to DJ and listen to a band. So, the name of the game is convergence.        

So either the huge investment retailers have made in real estate has been wasted or it must be turned towards other purposes?        

In business one must look at scenarios based on human nature and how people behave and then tell stories relevant to those scenarios. Let me give you an example to illustrate what I mean.        

Let’s take the average husband and wife with a couple of kids wishing to throw a dinner party for a few friends on Saturday. They will want to prepare by deciding how they are going to make the evening interesting. But all they’ve got today is a supermarket where they can buy products to cook at home as per their recipe book.        

So how could your retailer of the future turn this shopping opportunity into something special?        

Wouldn’t it be great, if that same couple were able to go to a supermarket where they could pick their own vegetables and strawberries etc. fresh for the meal? A place where they could have lunch with the kids and where someone would teach them how to cook beef Wellington, or whatever?        

A place where someone would tell them what they needed to buy to make the meal a real success, including aperitifs, wines, after-dinner cigars and whisky etc.? A place where they would be told about the quality and history of the products they were buying and which would equip them with some stories to tell to their guests?        

So, this typical family would have a whole experience at the supermarket, which goes beyond simply shopping for merchandise, and which has far more to do with mindset and lifestyle.        

Department stores in Germany, however, have long been in crisis despite various attempts at creating lifestyle-oriented assortments…        

The German consumer has been conditioned to be price-sensitive -- an attitude which takes a lot of shifting. In fact, this price and value-craze has come back to bite the German retailers. Shopping is not just about giving people commodities at the lowest possible price with no experience attached.        

People in the future will not accept that anymore. Therefore, I think that there are great opportunities for Karstadt etc. to reinvent themselves.        

How? They’ve been trying for years…        

They must increase their focus on experience, learning, connoisseurship, specialism, interaction and community. They must also break down stories to consumer-tribe level.        

So why not provide, for instance, a fantastic TV offer which no specialist retailer can match and bring it into a setting based on living areas, thereby creating a whole kind of new experience? Karstadt and Co. could also learn from other successful department operators in other countries.        

From whom and where?        

In the UK, they could take the idea of entertainment, culture, learning and visual feasts from Selfridges; and they could learn about service from John Lewis.        

But even in the UK, I would probably buy my internet-based digital radio from Currys or Best Buy rather than from a department store…        

All they seem to do is stack their products on shelves and sell them through information and a card; I’m not satisfied with that. If I could go to a department store where I could talk to someone about the product I want to buy and experience it, I should be much happier.        

Department stores have an advantage, which they should exploit, in that they have a far better opportunity for dwell. They have so many more opportunities to keep customers in the store and to tell them lots of stories there.        

Department stores also have the advantage of offering food & beverages on site…        

Yes, but why put them on the 5th floor?! They do so simply because they know that they can’t get the customers up there otherwise. That is driving solutions through your operational issures rather than through customer expectations.        

That is the problem with many retailers. They come up with solutions that are driven by their own internal requirements and not by the mindsets of customers.        

What’s so bad about taking the lift or escalators to one of the upper floors if I want to have a bite to eat?        

I don’t want to go up to the 5th floor and have a sandwich; I want to eat where I am shopping so that I can still look at the shops. Retailers seem to think that shoppers close their eyes when they start chewing, but they still have eyeballs! If someone is eating a sandwich, while looking at shops, they still continue to buy.        

I went to KaDeWe, Karstadt’s flagship store in Berlin, recently. They have a fantastic food offer, but it is on one of the upper floors. Why do they take me out of the shopping environment in order to feed me? They ought to put the food offer in amongst the product they want to sell.        

As a retail designer you know the reasons well enough. Their service is up there; their extraction is up there...        

But I’ve never heard a customer say: “I know why I’ve got to go to an upper floor because all their extraction is up there!” All I know is that, if I am buying a €50 bottle of perfume and I’m hungry, then I’ve got to leave the perfume department and go upstairs in order to have something to eat.         

But gastronomy is a messy business; you don’t want all that gunge and mess in your chic perfumery…        

You are missing something fundamental. Food and beverage is the very glue of sociability and can be introduced to far more areas than you think. Let us take books and music, for instance, people want to go there, sit down and have a coffee. Retailers must therefore think more strategically.        

Also, don’t forget that people don’t just go and eat, they like to be seen. So, particularly if you are offering high-level luxury products such as perfume, jewellery or fashion accessories, you really should have a chichi kind of café or bistro in the immediate vicinity in order to attract the type of people who want to be seen.        

I’ve seldom seen a really convincing chichi offer in a department store, many luxury-goods customers prefer to eat elsewhere…        

Then you ought to go to Dubai, for instance. We’ve helped design shopping centres and department stores there where food & beverages are distributed throughout the retail space -- and with great success.        

You once said that people don’t just want things, they seek meaning. If, however, I go to my local Aldi, do I really want them to provide me with a meaning to life? In fact, wouldn’t it be pretentious of Aldi even to try, or am I being too cynical?        

I love it when people are cynical, to me it presents a challenge!; I think it is really important because cynicism has its place. It makes me think harder and helps me to explain what I mean instead of being mentally lazy.        

O.K. So what do you mean?        

I was just trying to project forward and say that in this modern world the net generation is going to radically question consumerism rather than buying ever more stuff to hoard. Statistics reveal that the average person in the UK hoards in his or her home stuff worth around £450 ($700; £551); none of which is ever used or seen.        

At the same time, houses are becoming smaller and smaller as populations continue to urbanize. No wonder storage companies are currently recording annual growth of around 12 per cent!  Parallel to this, people are “de-skilling” as, for example, fewer and fewer people need to cook.        

So where is all this leading us?        

There will be fewer kitchens in houses and flats. Maybe there will be no living rooms and everyone will work from home and not in the office. Perhaps, instead, there will be communal-living or work-life spaces in blocks of flats with shared kitchens. As space becomes a premium, people will think more intensively about localism, ecology etc.        

Consumers will increasingly ask themselves: “Why I am I shopping, why I am buying?” They will want to buy things which have meaning and not just stuff to hoard in less and less space.        

What do you mean by meaning?        

Experience, culture, learning. I may want to learn to cook, or I might want to learn about food and to eat it at the retailer’s. Our family sometimes experiments at home to see how long we can go without shopping. It’s frightening! We could go three weeks without buying anything other than milk because we have so much in the freezer etc.        

There are more things in and to life than just buying commodities. So in ten years’ time the priorities of today’s generation will be different and they will think differently.        

You have minted some thought-provoking slogans in your time; which one would you choose for our readers?        

“People don’t just want value, they want to be valued.” Give value, but value your customers, their time and their wallet, and keep them both engaged and interested. Don’t think that they are only driven by price, people are driven by value.        

Then half of Germany’s 80 million consumers are wrong…        

What, for instance, is a woman buying when she buys a dress? What, with her female mindset, is she buying really? Is she buying some cotton fabric to cover her and to keep her warm? No, she’s buying the hope that someone will say she is beautiful. That is the essence of consumerism, it is about mindsets and not merchandise.         

And the consequences for retailers and brand manufacturers?        

The old idea of communication with consumers in the form of a monologue is most certainly passé. There must be a dialogue and a shift from point of sale (POS) to point of dialogue (POD). However, the attitude of many retailers remains transactional, i.e., money in the till.        

Surely the whole point of retailing is selling people things?        

What is retailing? Is it trading, buying, selling and exchanging goods for money? No, not anymore. Retailing today is about mindsets not merchandising. It’s about relationships and has shifted from transaction to interaction. See your customers as a citizen first and as a customer second.        

To conclude, two personal questions: firstly, how would you define your business philosophy in just two or three words?        

Innovate or die! Businesses don’t fail because they do the wrong things; they fail because they do the right things for too long.        

And, if you had to recommend our readers just one book, what would it be?        

Sorry, but it has to be two: “Tomorrow’s People” by Susan Greenfield and ‘Next’ by Miriam Salzman.         

    
Related article in German: Interview by Mike Dawson in Lebensmittel Zeitung, no. 41, 15.10.2010


Comments for this article are closed.

  1. Joshua Bamfield
    Created 2 November, 2010 08:29 | Permanent link

    Excellent account of the ideas of Ibrahim Ibrahim who seems to be very much the man of the moment. There are two major issues and both were raised in the piece.

    One is, 'So what?' -- or what can these things mean to me in that the mental concepts seem to originate from fashion, and it is unclear how to apply these to food, discounters, or big box stores. One might love a Bosch drill in the way that Apple-users love their iPhones and iPads, but what can this mean for merchandising to a DIY shed?

    The second is about national characteristics and demographics. People's 'mindsets' (that one 'sells to') are not only about emotions but may be hard-wired for frugality or low cost, meaning that you have to appeal to their pockets as well as their emotions to make them buy. As you point out, German retailing does not have its current character by accident. Selling to 'mindsets' has to reflect national expectations and characteristics however broadly defined.

    A good piece, which makes you think.

    Joshua Bamfield, Nottingham

  2. Andreas Hösch
    Created 2 November, 2010 10:49 | Permanent link

    I'm afraid I don't agree with some of the thoughts expressed in this interview. Yes, we've seen the internet, mobile phones, apps, and other tech-inventions taking over our lives in only a few years or even months.

    But to believe that such a basic need as the touching of products on shelves will disappear in a large number of stores is rather too optimistic in my opinion.

    Just think of the bicycle industry: In 1995, quite a few experts predicted the end of the chain-based drive within only 10 years. Today in 2010, however, all bikes will have a chain on, as Eurobike in Friedrichshafen turned out.

    What has changed are the details within this fixed system: We see planetary drives or lighter gear shifts with greater effectiveness. Surely, there will be a similar, commensurate development in the supermarket industry.

  3. Mark Winspear
    Created 7 December, 2010 20:21 | Permanent link

    Thank heavens I left retail years ago!

    Some of his fancy ideas, propounded in the latter part of this article, may work in a limited number of up-market outlets in some markets. However, the interviewer's implied scepticism of things such as food service and sandwich-eating amongst the merchandise will be abhorrent to many -- not just the retailers, but many consumers too.

    Likewise, there are many of us who prefer to do our own research, and then buy online from a discount shed -- the idea of "customer service" inflicted upon customers by many retailers in recent years, not least when driven by sales incentives, commission and the infernal insurance/extended guarantee hard-sell, has simply resulted in said retailers being put on "the black-list" -- avoid at all costs!

    The most sizeable "niche" will remain, in my opinion, the shopper who requires good mix of quality and value with a reasonable level of service available IF required -- in an attractive shopping environment not polluted by inappropriate food smells or people "grazing" and touching the merchandise with germ-laden greasy fingers.

    Oh, and long-live the 5th-floor haven of tranquility -- somewhere peaceful to escape the hustle and bustle of the sales floors in department stores.

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