3 Key Principles That Drive “Social Retail”
Burberry’s new Social Retail store in Shenzhen, China in partnership with Tencent Technology (WeChat) has taken over Fashion & Retail Media. But what really is ‘Social Retail’?
[ This is a featured article in The Closet On The Cloud, a Fashion Tech Newsletter.]
Foreword:
Since we last spoke (or should I say, since I last wrote), all I seem to have heard is :
Yes Internet, we get it!!
!! Burberry has opened the first Social Retail Store !!
But what really is Social Retail? If I’m being honest, I’d never heard of it before Vogue Business, Jing Daily, BOF & Baidu told me this past week. While features and provisions of the new Burberry store we covered in detail, there’s been hardly any coverage of what ‘Social Retail’ means exactly. Investopedia doesn't even have a page for it!!
We’ve honestly been (word)played.
However, this is why I’m here. I’ve attempted to break it down.
What is Social Retail?
In laymen terms, the basic concept behind social retail is the same as the one that applied when you’d share your lunch with a classmate, so your mom gave you more food so you could both have a piece. Except that your mom did it out of love and brands are doing it for profit :)
Shifting Retail, the only other source defining this term defines it as:
The concept of Social Retail revolves around a simple idea: rewarding people for what they already do, share products and experiences that they love.
The 3 Principles Driving Social Retail:
1. Data Consistency & Continuity: We might as well be 0s and 1s
The universe of Social Retail revolves around “rewarding customers for engaging with the brand both online and in-store”.
Social retail is like an “add-on” to the usual retail, wherein brands are trying to harmonize consumer’s online and offline experience. Most individuals, especially those that consume high fashion/luxury, tend to live life in 2 medium(s). Digital & Physical. Shockingly, these lives differ greatly between the two.
We started out with our Physical lives influencing our activity in the digital realm. However, the younger, “tech-savvy” generation seems to be operating in reverse; with their digital lives dictating what goes on physically.
This discrepancy in the two media leads to what I call a Data Vaccum. The gap of activity between the two is unbearable for brands today. As you’ve probably already experienced, today’s brands are interested in knowing things even the most-overprotective mothers wouldn't need to ask.
EXHIBIT A:
When we surf online and use today’s digital channels, we create data points. Data that is crucial for brands and companies to know us better than we even know ourselves. Our activity on brand pages and interaction with their content is tracked vigorously and stored. This data, as of… well..yesterday, was used to personalize our transactions online. This is no longer enough.
I imagine this confinement period has perhaps served as an “Empty Mind, Devil’s Workshop” playfield and given marketers the idea to sync the online and offline activity of consumers to create an even deeper level of customization. Something that is of great importance in the Luxury ecosystem in particular.
BASICALLY: Social Retail syncs all our digital activity with our experience in physical stores so that the patterns, preferences and information we provide online can be used to have a wholesome experience in-store as well, instead of the two being completely separate.
2. Peer-to-peer Influence: Trust me, I’m your pal.
Another factor to keep in mind when speaking of Social Retail is also peer-to-peer cum independent activity. There is no bigger influencer in our lives than people we actually meet, greet and interact with every day. I would much rather listen to what my sister or classmate has to say about a product than a fashion blogger with 800k followers.
Social Retail capitalizes on this consumer activism and “rewards” consumers for it. Recommending, sharing coupon codes etc are all part of Social Retail. They bring not only a sense of lifelong participative loyalty in already existing consumers but also allow for far more effective customer acquisition and conversion. Burberry’s new store and partnership with Tencent Technology has been an effort in the same direction.
3. Channel Engagement Equality: It’s all about balance.
Brand applications and tools on consumer’s phones can be accessed at home as well as in-store to avoid a lag between the customer journey. Mobile games, customizable avatars, activity-based rewards, social currency are all elements that lead to that sweet balance in customer activity. With social retail, a brand can ensure that the customer isn't majorly dependant on either; physical or digital brand access points. Hitting that sweet spot where consumers need to engage equally with both channels would make social retail a success, in my opinion.
Hitting that sweet spot where consumers need to engage equally with both channels would make social retail a success, in my opinion.
After all, they’ve gotta justify those heavy salaries they pay developers and interior designers alike!
Quotes from Publications:
Here are some relevant bits from media that covered Burberry’s new store in China corresponding to my 3 principles!
Principle 1:
“The new store, launching today, is 5,800-square-foot, designed through a partnership with Chinese tech giant Tencent Technology, and will rely heavily on the WeChat mini-program to reward consumers for engaging with the brand, both online and in-store.”
It originated from the discovery that although most customer journeys for the brand’s target customers start on social media — particularly in China — they still want an in-store, experiential element that they then share online; 80 per cent of its customers have used a digital touchpoint before they purchase. “This store is about trying to connect your online life with your in-store life so that one adds value to the other,” he says.
“You have seen the latest results of the luxury companies. The only bright spots are mainland China and digital. So if you put them together, if you find an initiative that can touch both of them and add value, it can bring positive results,” says Mario Ortelli, managing partner of luxury advisors Ortelli&Co.
“Through the innovative exploration of’social retail’ stores, Tencent helped Burberry to deeply integrate online operation methods with offline store operations and experience re-engineering, breaking the channel boundaries and store restrictions, so as to better integrate social networks. Meet the individual needs of consumers, promote the digitalization of brands, and realize the close connection between users and business.”
Principle 2:
The next big retailers may look more like social apps than traditional companies, says Connie Chan, a general partner at Andreessen Horowitz. She foresees a shopping revolution focused on consumer experience, integrating e-commerce, entertainment and even gaming. “A social-first approach to commerce enables interesting network benefits, such as built-in ways for customers to browse and send recommendations from influencers and friends or virality timed to product drops.”
Principle 3:
Within the store, it acts as a “digital companion”. Customers can scan product tag QR codes to view additional content like “product storytelling” and models wearing the item — a first for the brand — and book a preferred fitting room with specific playlists selected by Burberry and the ability to adjust the lighting. Every item in the store is scannable.
Each action rewards customers with social currency. As customers earn more currency by interacting with the brand, an animal character “evolves”, starting from an unhatched egg. In addition to new characters and outfits for their characters, customers can receive exclusive cafe menu items and access to the “Trench Experience”, a digitally enhanced room designed to help customers create content to share on social media, including the ability to try on a trench coat.
I really can’t wait to hear what you think about Burberry’s new store and ‘Social Retail’. Do make sure to comment below or reply to the email 😍
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Resources to read more:
(Google Translate for the next one; it's quite good for a Chinese perspective)
