Why Your Store is a Marketing Channel | Jack Stratten

0:00Jack Stratten: At the most fundamental level that really has changed is how people discover and engage with brands online before they even visit a store. I'm not even talking about whatever it might be 20-30 % of sales that might be digital. I'm more interested in the fact that most people now when they arrive at the store have had some engagement with the brand or the product before they've been to that store. By default that means the store has to speak to that customer with a different kind of energy in a different way. If you're just stocking everything high and expecting people just to be excited to see your products there, it's not going to work.

0:31Jack Stratten: Start thinking of your stores as marketing channels as well and figure out, well, how much of your store should be about marketing? And therefore, is there a case to remove some of the product and do something creative or even just reposition the store or put a bit more effort into how it looks and what the experience is in order to drive marketing KPIs?

0:59Natalie Berg: Welcome to Retail Disrupted, a podcast that explores all the trends shaping the future of retail. I'm your host, Natalie Berg, and today I'm recording this intro in Milan. However, the episode, the interview that you're about to hear actually took place in Barcelona. Now, that makes me sound like much more of a jet setter than I actually am. However, today's guest is a genuine retail jet setter. Jack will be a familiar name to many of you. He is the director of the retail trend spotting agency, Insider Trends. And Jack is genuinely on the ground visiting stores, leading store tours all over the world.

1:36Natalie Berg: I managed to grab some time with him at Shop Talk. And so today you're going to hear Jack's take on what makes a physical store truly compelling, Who's doing this well? And how retailers should rethink the very role that their stores play. Before we dive in, though, if you are enjoying these conversations, please do subscribe to the channel. Every week, we speak to retail's leaders and disruptors, and subscribing ensures that you never miss an episode.

2:05Natalie Berg: Jack, welcome to the podcast. It's so great to have you on the show, and it's great to be here in Barcelona at Shop Talk. I was boarding my flight last night at Gatwick to come here, and I kid you not, there was somebody behind me talking about your retail tours. So you are world famous, Jack. But for those who might not be familiar with your work, can you tell us a little bit about yourself and Insider Trends?

2:26Jack Stratten: Yeah, thank you, Natalie. It's quite rare for someone to be talking about one of my tours on a flight, but I'll take that. That's exciting. I run Insider Trends, a global retail trendspotting agency. but we're kind of best known for running retail safaris for brands and sometimes technology companies all around the world. But broadly, you know, we're about delivering trends and insights at a kind of macro level, either in the form of tours or presentations, workshops. So yeah, really, I have a fun job. I get to kind of think and speculate about the future of retail with a big focus on physical stores.

2:57Natalie Berg: Yeah. And actually being able to be on the ground and visiting stores. I mean, I'm really envious that that is your job. I'd love to be able to do that a little bit more. So Shop Talk, we're halfway through day one. I'm not sure what your schedule's been like, if you've had a chance to sit in on any of the sessions, but what's your overall take so far?

3:13Jack Stratten: Do you know what? I haven't done too much yet other than kind of, I've had some meetings and been around the expo, but much like last year, what's nice about Shop Talk Europe and Shop Talk in general, I think, is that it always feels, maybe it's because of the meetup programs. I don't know the way they structure it, but it's not an overwhelming show. I feel like you can, if you make plans you know you can kind of find the people you want to find um you have quality conversations and the talks are always really really busy but i think broadly speaking from a networking point of view from an industry kind of connection point of view it's a very manageable show this might be an odd thing to focus on but i feel like if people like me and no doubt you when you go to a lot of these shows actually you really notice when a show is comfortable when you You can sit down when you can find somewhere to have lunch.

4:00Jack Stratten: And it sounds odd, but actually these things really matter. And do you know what? For a lot of brands and retailers, that's the other thing. That's big for them. They don't want to go to a show where it's just so overwhelmingly busy. They can't find anyone. Their phone signal doesn't work because there's 20 ,000 people. I think that's my feeling in the last couple of years of Shop Talk Europe is it's like a nice size, or at least it feels very spacious. The venue fits the number quite well.

4:22Natalie Berg: Yeah, yeah, exactly. I know because some of these events can be a bit overwhelming and completely a whole sensory overload happening. There's nice quiet spots where you can escape to. Yeah. So let's get your take on stores because it's such a big topic, physical retail. It's undergone so much change. I think broadly speaking, we know that stores can't just be about the transaction anymore because that's not how we shop. You know, the way that we shop is evolved like beyond recognition over the past few years. What should a store be today? What do stores need to do to stay relevant?

4:52Jack Stratten: Of course, a lot of what is important in terms of maintaining, creating a great physical retail store is the same as it was historically. A lot of it still is about great products that are, you know, merchandised beautifully, stores that are well maintained, great staff, great service and everything working well. When we talk about everything working well nowadays through a tech lens, there's all that complexity about, you know, making everything seamless and frictionless and all that good stuff. But actually, you can flip that and say, well, without tech, they would still largely the same themes 30, 40 years ago.

5:29Jack Stratten: 30, 40 years ago, people still didn't want to queue and they still wanted everything to be easy to find in the store and they wanted the store to be nice. So I think those core elements haven't changed that much. And I often say to retailers, you know, that it's important to remember that there's some core stuff that hasn't changed all that much. At the most fundamental level that really has changed and obviously is changing even faster now because of AI is how people discover and engage with brands online before they even visit a store. I'm not even talking about, you know, there may be whatever it might be, 20, 30 percent of sales that might be digital.

6:00Jack Stratten: Actually, I'm more interested in the fact that, you know, most people now when they arrive at the store have had some engagement with the brand or the product before they've been to that store. and I always say that by default that means the store has to speak to that customer literally and metaphorically with a different kind of energy in a different way if you're just stocking everything high and expecting people just to be excited to see your products there it's not going to work the best way of explaining really is I think there are there are extreme examples of how this has changed like your maybe luxury brands I always think gentle monster are the classic example of this, like a niche luxury brand that basically opens stores for the purpose of marketing, right?

6:39Jack Stratten: And their KPIs are marketing.

6:41Natalie Berg: So that's the eyewear brand. Exactly.

6:44Jack Stratten: So people probably, you might've seen them on places like TikTok, even LinkedIn, to be fair, where, you know, they have these absolutely insane kind of physical elements in the store. They also have really cool concessions in Gary Lafayette, Selfridges, places like that. But because they see the store as a marketing channel and they let sales happen online or in other retailers, they give total creative freedom and they say, right, the store can be crazy because the main KPR is marketing. Does this generate interest? Does this generate digital follows? Does this make people come to the store or return?

7:16Jack Stratten: All things like that. Actually KPIs we'd associate more with advertising or marketing.

7:21Natalie Berg: Yeah. Gentle monster. Retailers would normally be looking at things like sales per square foot, sales densities, or or comparable sales store sales growth.

7:29Jack Stratten: Exactly.

7:30Natalie Berg: Very tangible, hard numbers. Absolutely. Actually, what you're saying is they should be looking at it through it.

7:34Jack Stratten: The interesting thing is that I think what you've had now is, and they're not the only example, but some niche brands who maybe have the luxury of being able to sell in different channels, they've totally inverted it and gone, actually, you know, we'll do our marketing through physical, maybe because online sometimes is prohibitively expensive these days to be able to advertise. You know, it's very, very difficult to cut through, but I often think that they're an extreme example but I never say that everyone should do what Gentle Monster is doing but I also now say do you know what we should be taking some learning from them and saying you know what percentage maybe of your store should you be thinking of as marketing or doing some marketing work because it's an incredible opportunity from whether you're street level and you're looking at the facade or the windows or you're in the store there are so many moments that could be doing amazing marketing creating content for people to share making people want to refer other people.

8:24Jack Stratten: So yes, you might not be gentle monster, but I say maybe there's a bit more of a thing of, you know, 20 % of your store should be looking at marketing and therefore marketing KPIs. So there's so many different aspects to this, but that's maybe one of my kind of fundamental things now to brands is saying, start thinking of your stores as marketing channels as well and figure out, well, how much of your store should be about marketing? And therefore, is there a case to remove some of the product and do something creative or even just reposition the store, I'll put a bit more effort into how it looks and what the experience is in order to drive marketing KPIs.

8:59Natalie Berg: It feels like a scary thing though for retailers, right? Because you're just saying, you know, taking product out of store, it's like, oh, that's missed sales opportunities. And that feels very scary. But I agree with you. I think that the way that we shop today and the fact that stores need to deliver something that you can't get from a screen, right? You need to offer something that, because we have everything right at our fingertips. So So stores really do need to go above and beyond and roll out the red carpet for shoppers and add that kind of surprise and delight. I think that's so important for retailers.

9:29Jack Stratten: And I think that, you know, I mentioned Gentle Monster, but in reality for most of the people that might be listening, the real meaningful examples might be a brand like Sephora. Sephora, the average Sephora store isn't pulling a lot of products out of the store. But Sephora are doing a lot of marketing in their stores now. I mean, their flagship here in Barcelona. the entire, I don't know if people have been to it, but it's the one that's in, it's called L Triangle, but it's like right in the center. And there's a slide at the entrance, but also before you even walk in and you get the escalator down, you know, they have this vast area of screens and of kind of almost marketing assets that a brand or maybe a Sephora, an LVMH brand can take over to promote a new product.

10:10Jack Stratten: So the entire entrance to that store is focused on marketing and is focused on advertising. And this is, you know, Sephora, this is a giant of the retail world that really understands how to sell products. And they are doing a lot of marketing in their store. You know, now Sephora are measuring marketing KPIs and that is part of their thinking. They're not just assessing sales and different sales related KPIs. They're very much looking not just at traffic, but more nuanced.

10:35Natalie Berg: Yeah. What are some of the KPIs? So I would say it's absolutely that dwell time is a big one.

10:41Jack Stratten: Traffic. They would look at conversion as a part of it in relation to the traffic. But I think what we're going to start seeing more, and I know Sephora doing this, is actually using technology to try and figure out, well, what proportion of people who are stopping outside one of our stores and looking at what's going on in the window actually come inside? I don't know if anyone's been to future stores on Oxford Street in London.

11:00Natalie Berg: I had Ariel on the podcast actually talking about it.

11:02Jack Stratten: And that's what they're doing through AI cameras. They're measuring capture rates. They are now able to go. So whatever brand takes over, we know the amount of people who've looked at the advert in the window and then gone into the store because they like the look of that advert. That is like click-through rate on it. That is basically giving you the same KPIs as you get in the online world. I would say Sephora are pretty close to giving that to brands who would sponsor a retail store. Now, Sephora have thousands of storefronts around the world. Imagine the potential of that for brands to advertise, but also for Sephora as additional revenue for driving traffic in the store.

11:35Jack Stratten: So that's the thing. This kind of idea of marketing as part of what we measure in store and what we do in store. Sometimes it is crazy and fun and hypothetical like Gentle Monster, but actually the likes of Sephora are really doing it in a very meaningful way.

11:48Natalie Berg: Yeah, but they're doing it in their flagship stores. So I guess just to push back on that idea a little bit, what's your advice for the retailers tuning in today that have stores up and down high streets that need to kind of inject a little bit of excitement and all the things you just touched on, but also they need it to be economical enough so that they can scale this concept. What advice do you have for that?

12:08Jack Stratten: And I'd be really interested on, I think you'd be more of an expert than me on this, Natalie, but my current feeling about what's happening with AI, certainly in terms of discovery, one thing I'm confident in is that I think the average consumer that comes to any store is coming with more knowledge and experience of any given brand or product than they used to. AI is just another way that, you know, knowledge and discovery of a brand or a product is exploding. That's one thing that I don't know yet, I can't say company about end-to-end AI and the purchase end of what AI does in agents. Fascinating, but I don't know where we are yet with that.

12:43Jack Stratten: I don't think anyone does. Right, which is good to know. But certainly in terms of discovery, I think it's already changing. Very clearly, it's already changing. So I would say to a lot of small retailers, if we think about the future, the average person who walks through the door, there's a high chance they're going to have a clearer idea than historically of what they might want before they come, what they're looking for, at least knowledge about the brands that you stock. So I think that it is a case again for traffic being an unbelievably important KPI. Because I think when people are going to come through the door, I have a feeling that conversion is going to overall increase because I think people are going to arrive kind of already knowing what they want to a degree.

13:22Jack Stratten: It's going to be harder for a member of staff to convince them. They're going to have so much knowledge. They're probably going to have learned about a product from one of their favorite people on TikTok who spent 20 minutes telling them about some product they love. So they just come into the store because they want to see it in the flesh and buy it. Conversion might take care of itself, put some real energy into traffic. So when I say that, it's how does your store speak to people who want to create content, right? People who want to come and film something, take a picture. And how does it look and live up to the exciting things they've already seen online?

13:55Jack Stratten: That's the other thing. I don't feel like you get away with average looking stores as much as you used to. And I'm not saying that means you have to have a slide in the store. but I do think it has to be like some love and effort put into the way stores look and a merchandise. My favourite example of this always at the moment in the UK is Sostrena Grena. Everyone in the UK will be familiar with Sostrena Grena. They're everywhere. They're like the fastest growing store focused retailer probably in the UK and they are not doing anything flashy in those stores. They are just really nice looking products, well merchandised.

14:24Jack Stratten: They're tidy, immaculate, clean smelling, enjoyable stores where you can afford to buy something. And it lives up to what people imagine when they go into a physical store. It gives them a feeling. You know, at every price point, you're getting a little hint of luxury, something special. And I think that matters. I don't think it's a coincidence that they seem to be flying whilst maybe some similar companies, maybe like Tiger Copenhagen types, who put a bit less effort into some of those merchandising at the lower end, aren't doing as well. I think that's where we are now. You just a bit more love and energy into the way the store looks, goes a long way.

14:59Natalie Berg: And also I think that there is slightly more curated and creating that treasure hunt experience I think is really important for consumers in a physical setting and in a digital setting. Yeah, I totally agree.

15:09Jack Stratten: And on the curation point, you know, very closely related to that, that ability to change stock regularly, I think lives up to that online expectation as well. You know, whether we're online with a deeply personalized feed or not, you know, we always have a sense of infinite choice. Stores can't offer infinite choice, but I do think they can't just offer stagnant levels of choice. You know, you need to give customers a variety. And I think companies like Sostraday Underground are really good at freshening stock up all the time.

15:34Natalie Berg: Yeah, I mean, you only need to look at like the oldier little middle aisle. And I mean, that's what gets me going back every week. See what new plants are in this time here. Yeah, completely.

15:41Jack Stratten: And I think on that point, you know, I think a lot of supermarkets are doing a really good job following that same principle, right? That freshening up and getting some of those new startup-y food brands in the mix that just slightly speaks to that online consumer that wants to see that digital world replicated in the flesh so they can try these things out. Yeah.

15:59Natalie Berg: Yeah. And just as a final question for you, Jack, you touched on AI and if we just, I'm not going to ask you for kind of your thoughts on the future of AI or anything scary like that, but I want to get your take from a physical retail perspective because it feels to me like e-commerce is, and I say this a lot on the podcast, but e-commerce is going to become a lot more immersive, a lot more personalized, a lot more dynamic. And I think it's going to take all the best parts of physical retail, the things that it couldn't traditionally do, discovery, personalization, and suddenly we're going to be able to get that in a digital experience.

16:32Natalie Berg: What does that mean for physical retail? Does that mean physical retail needs to up its game even more?

16:37Jack Stratten: All of that, for me, just reinforces brands understanding the roles of their stores. And I say roles plural, because yes, I've touched on marketing, but in reality, stores are, you know, I talk a lot about roles of stores and stores can solve problems and create opportunities in lots of different ways. So I imagine even as e-commerce evolves, as has been the case since e-commerce began, stores will need to solve problems that some of the evolution of e-commerce creates. We can pick loads of those, but for example, returns or, you know, try on, for example. Virtual try on is still a discussion that's ongoing and it will handle some of it, but it's not going to their certain categories, certain brands, certain experiences where people always want to try something on in the store.

17:20Jack Stratten: And I always say at a strategic level, the key is going to be, as anything online evolves, really focusing on what things does the store do well that e-com can't, and there will continue to be those opportunities. And it may be marketing. It may be to do with solving problems. It might be storytelling. It might be very specific kind of customer services. It might be leaning into that more. But it will be about really understanding your customer and the problems that they have. and actually I also think store teams spending more time with digital teams, e-com teams and really understanding deeply the things that e-com isn't doing.

17:58Jack Stratten: You know those teams working close together and saying right for all the great things you're doing what are the problems coming out of that because maybe we solve those in store. I don't like that that constant discussion that still seems to be going on about you know seamless omni-channel because I think it's kind of vague. I think it's more of success might not be seamless. It depends on the brand, it depends on the customer but it will be the store teams and the online teams understanding each other, what they're doing and the problems and opportunities happening in each channel. That's the thing.

18:26Jack Stratten: Because e-com won't solve everything. I know it won't. And there'll continue to be those opportunities for sure.

18:31Natalie Berg: Yeah. Fantastic, Jack. Thanks so much for coming on the podcast.

18:34Jack Stratten: Thanks for having me, Natalie.

18:37Natalie Berg: Thank you for listening to Retail Disrupted. If you enjoyed this episode and would like to support the podcast, please leave a rating or review or share it with others. It really makes a difference.