So many businesses closed down during the pandemic as consumer behavior changed drastically. A fundamental shift in retail before the pandemic and COVID accelerated things as consumers didn’t expect sudden changes in their personal lives. Everything was affected, including their decisions on buying products. In this episode, Ben Baker sits down with Stella Gianotto to discuss where the brands are going, the future of consumer decisions and behavior. Stella Gianotto is a consumer futurist working with retail brands to reimagine their environment, increase market share, and create hybrid business models for sustainability. Join in as they discuss how the way we engage with customers will change amidst all these market transformations.
Thank you very much for coming back, my wonderful audience. Come join me on LinkedIn. That's where you usually find me, at Your Brand Marketing or Podcast Host for Hire. I post every Wednesday. Have a conversation. Let me know what you like about it and don't like about it. Who you'd like to see as new guests, what you'd like me to talk about because this show is all about you. In every episode, you guys give and come up with interesting things and this was one of them. This was one of the conversations that people came up with. I want to introduce you to Stella Gianotto. She's from Brand for Brands Agency. She's out of Sydney, Australia and we're going to talk about consumer futurism. Stella, welcome to the show.
Thank you, Ben, for having me.
I've been looking forward to this because retail and consumer are not something we talk a lot about. My audience tends to be a lot of B2B but I think it's important because retail has gone through an enormous shift but the shift happened before that and I want to get into all that. Before we do, let's find out a little bit about you. Let my audience know about you, where you came from, where you are and how you got to talk about futurism in the consumer space.
I'm of Italian descent. All of my family live in the north of Italy. I was born in Australia and my entire family is creatives, designers or in some way involved in the arts. I've always grown up with it. I started off studying Photography and then did a Design degree in Visual Communications. I graduated from university wanting to work as a photographer. At that stage, there was a massive push towards digital, computers and technology. Photography became digital media and then it evolved. Part of the degree that I did had a design background so I started working for various design agencies, design houses and eventually specialized in brands. Fast forward to many years later, we are still talking about brands but we're having a very different dialogue, a different conversation. We're looking more towards the future of brands as such and their biggest stakeholder, which is now consumers.
First of all, you come from a house of creatives. It must have been a very fascinating place to grow up because everything has got to be new. Everything is always about inventing. It's about what's next and that probably enabled you to get from where you were to where you are now.
The underlying theme of the household was always innovation. Innovation sometimes is considered to be a scary and a confrontational word but if we look at the fundamental basis of innovation, it's to look at something that's either old, new again or to create it in a different light or to evolve it from where it was. Sometimes that's as fundamental as using everything that you've got access to right now and creating something from that. That's as fundamental as innovation gets. Most people think that innovation is all about the latest tech and the latest and greatest, what's new and what's trending but when you evolve from creativity, that's not what innovation is about.
That’s fascinating when I think about that. When you think about it, it's because everybody has got this news that says, "Disruptive technology. I'm innovative. I'm creating something from scratch. It's coming out of my head and it's never been seen before," but that's not reality. The reality is that we're reinventing the world in our own way but there's always a history that comes with it.Innovation is reinventing the world in our way. Click To Tweet
There's always a lesson to be learned from that. For the record, I am anti-disruption. I am not about breaking. I am not about forging ahead and throwing everything out and starting from scratch. There are some situations that we need to do that where brands are concerned. However, the world has had enough disruption. I'm all about sustainability. I'm pro-sustainable. I'm about using what we can, leveraging from what we've learned and reinventing or sometimes redefining what we've already got with our brands in our business for the future that's yet to come.
There are many people that are wanting to throw out the baby with the bathwater. We need to get rid of the past and we need to look to the future and forget everything that happened in the past because that's old and we want something new. I think that's a dangerous place to be because when we do that, we throw out the good with the bad. There are things that need to be augmented, changed and innovated but to get rid of things that have worked in one way, shape or form for tens, if not hundreds, if not thousands of years, just for the process of having something new has never made sense to me. Where did you come up with that thought process?
I've had that thought process for a number of years. It's just that we've reached a pinnacle now in history in our lifetime. This is a war in our day and age, where technology, artificial intelligence and the accrual and review of data have hit such a tipping point that the rest of humanity needed to catch up. We're at a point right now where there is so much data and technology to revolutionize the way that we do business but the rest of the world hasn't quite caught up yet. The only target audience or culture that has caught up are consumers because consumers had their social liberties are taken away, such as, we went into lockdown.
How do we engage with all of those brands and interact with all of those businesses that have become part of our everyday lives? Consumers got it but most of the other industry sectors didn't quite get it. Retail was one of them. Now we have this renaissance period happening where everyone's saying, "We have to reinvent retail and throw everything we've learned out." No, we need to look at the past. We need to learn the basic lessons about understanding who our target audience is. Understanding the behavior of how, when and why they shop with us and translating that information and that data into the digital world, into the virtual space, such as the internet and how we shop.
Out of that is born a new business model, a hybrid business model that the rest of the world will start to entertain, which is clicks and mortar. Half the business is online and completely digital. The other half is still in person. It still has traditional bricks and mortar but it will be re-imagined the space, the way that we interact with it now. The biggest telltale sign will be what shopping centers and shopping malls will now start to do with all of that vacant space that they now have in retail. What's interesting is that service-based businesses were already onto it. We didn't build it and they would come because we didn't have the majestic retail outlet or store that they could go to.
We will always be online, in cyberspace somewhere or not physically seen. Service-based businesses have been doing this for quite some time. They knew they had to streamline their businesses, adopt technologies, go to the customer and put their business and their brands in the hands of the consumer and consumers. The rest of the world didn't quite realize that until now or we were forced to realize it when we went into lockdown.
I want to get into the changes through COVID and how it's going to implement it in the future, but I have this vivid memory. I gave a talk to the Box Manufacturers Association. In doing research, they went from being 10% of retail was the box industry to 70% to 80% retail because everything went online automatically. All of a sudden, all retail was going into boxes and needing to be shipped, instead of people putting them in their bags and walking out the door with them. That created enormous stresses within the industry. It led to innovation, different supply chains, creativity and finding better ways to utilize raw materials, to be able to solve problems differently.
It's something that I've been telling my clients for a number of years. There's a bit of a chuckle in my studio when it's like, "Stella wasn't wrong when we said we needed to focus more on packaging in terms of how are we going to get our products into the hands of consumers.” I'm absolutely right because I said that at one point, that boutique bag that we've become such an iconic image emblazoned into our minds from early teenagehood from hanging out at the mall and shopping centers and shopping your favorite brands.
No one sees us carrying that now. We need it shipped into our hands, into our own home and not leave our premises to get it there. That's the fundamental question for most retail brands and businesses that are online, “How do I get my product into my consumer's hands as fast as possible, as cost-effectively as possible and still give them that whole experiential experience of interacting on a human level with my brand?” That's where packaging comes in. I'm not surprised that the boxing industry has been assaulted.
I'm thinking about it from a purely visceral point of view. Everybody got excited when they got this bag and they walked around the mall with arms full of bags. I can't tell you how many times over the years I have followed my wife with an armful of bags in each hand with different brands and it became almost a status thing.
Influencers on Instagram are now paid for that. That's how they earn their living but that's all redundant now.
Instead of opening up the bag, it's unboxing and you have these unboxing experiences on Instagram, YouTube, etc., where it's the visceral experience of seeing something for the first time and it's the packaging. You need that packaging to almost replace the experience of walking into a retail location and giving that emotional attachment.
What happens too is that it's almost become a psychological experience because almost all of us go back to childhood. When we had birthdays, celebrations, Christmases and we couldn't wait to open that box, unwrap the ribbon, remove the outer packaging, open the box and unravel the tissue paper just to see what was exciting. That was the excitement within itself and we've gone right back to that. If you think about it, the boutique bag has an opening that you open up, you unveil the tissue and then you get the product out.
Think of how many more layers a box package has and how many more points of interaction. Fundamentally for the business, how many more surfaces you've got to rebrand and communicate your message across to your consumer. You have an unadulterated captive audience that will not be disrupted, and guess what? In terms of direct mail, you have a 100% open rate because you know they're going to open that box. What a return on investment that is? When you think about it in that context, you're like, "That makes good business sense." Of course, it does.
I was just thinking about it from a direct mail point of view because I started off in direct mail.
It's a 100% open rate.
If you got a 5%, 7% or 9% open rate on a direct mail package, you are magic. You're thinking 100% open rate on that package and think of the stories that you can tell. Being able to brand that outer box that would tell us a story. You open up that outer box to an inner box. That inner box tells a story. It builds anticipation through the entire process and creates that emotional attachment with the brand and enables people not only to sit there and say, "Can you believe the packaging?” It came via FedEx, UPS or whoever it came by, “It was a whole experience for me to open it up and when I got it, I was giddy when I turned it on.”
That's exactly what retail brands want you to feel but they're forgetting how to achieve it. It's as fundamental as looking at, starting with the packaging and looking at how do we get the product into the hands of the consumer and what do they then do with it? Let's not forget the after effects too because if that box is quite a lovely box, I will keep that box, assuming my 4.5-year-old son hasn’t commandeered it for a pirate ship or something to add to one of his vessels. Every time I look at that box, it reminds me. I recall that memory of the experience that I've had.
That further cements my loyalty to that brand so much that even if there is a competing brand that is cheaper or has a slightly superior product, I'm going to go back to the brand that gave me the best emotional experience because it's cemented now, not only in my mind in my psyche but in my heart. I'm going to show you the love with my hip pocket now, by coming back and shopping with you again. You've cemented customer loyalty. When we go online and digital, we've forgotten about the fundamentals of doing business.There is so much data and technology to revolutionize how we do business, but the rest of the world hasn't quite caught up yet. Click To Tweet
Let’s talk about that emotional connection in terms of pre-COVID, COVID and where we're going because there was a fundamental shift in retail prior to COVID. COVID accelerated and changed things. It did things that we weren't expecting or at least accelerated things but there was a fundamental change the 5, 10 or 15 years prior to COVID. Talk to me about the evolution of where retail lost that experiential cache and how we're moving back towards that, or hopefully how we're moving back towards it.
In the US and also in Australia, pre-COVID, so pre-2019, sales were already dwindling for a number of brands. They were already a number of closures. A number of brands both in the US and Australia closed their doors, brands that had been around for decades, family-owned businesses in generations. COVID was not the reason why retail was failing. There was already an underlying fundamental issue before that. COVID, in some cases, was the nail in the coffin. It accelerated the industry in some aspects. It forced other aspects such as in fashion and the rag trade to become more sustainable and start rethinking, "It's not sustainable doing four collections a year. Maybe we'll do two and we'll make to order." It forced businesses to go back and recreate their working model.
Having said that, pre-COVID 19, we were facing massive consumerism. We couldn't get enough of the luxury brands. We couldn't get near them enough, get enough Instagram followers or influences and we were living in a bit of a hyper-reality. In so far is the bubble that needed to burst, it got too hard, too fast and things were moving too quickly. I'll give you a point in case. Some of the luxury goods in terms of handbags, I'm talking very high. I'm talking Chanel, Louis Vuitton and Bvlgari.
$2,000 bags and up?
Yeah, in US because in Australia, most of them landed about $3,500 Australian. How many people can afford a knit bag every second month or six new whip bags a year? We're getting to that level where there was never enough. It was too perfect. We were chasing an ideal that we would never be going to achieve, then the world had a reset with COVID. We had our social liberties taken away. We had all of those consumeristic items that defined us or that we thought defined us, moved, gone. The iconic perception of being seen in the mall, being seen with the brand or interacting with the brand all of a sudden shifted.
Those businesses that were already online simply amplified what they were already doing. These are the early adopters that we're able to, in some cases, disrupt industries, but in other cases, forced them to reinvent themselves. It forced them to be more sustainable, pushed them towards going back to basics and understanding what it is that the consumer wanted because up until that point, consumers got what brands delivered. When we went into lockdown, our psyches changed. They changed for the better or for the worst. That's debatable. However, the younger generations coming through will not necessarily know what consumerism was like, what the world was like before we went into lockdown.
I'm describing this period we're facing as almost the golden era of post-World War II that we experienced in the US and around the world where the industry started to scale up. They started to bring manufacturing back to the local shores. They started to look at more local produce in so far as what products, produce and raw materials does this country have that we can market to the rest of the world? Issues like supply chain and blockchain won't be brought to its knees anymore because it's all consolidated in one area of the world. They're the things that will change but we will see a massive acceleration in some industries regrowing again because they regrowing on different principles. Even more fundamental than that, what happened, was that the consumer changed. In a lockdown, we didn't have all of the things that we could use to medicate our life.
We didn't have all the things that we thought defined us. What we had was our family, ourselves, our children and the work that we did. We had to take a long hard look at ourselves. Who are we? What do we stand for and what did we become? What we started to look for is we started to look for direction from our brands. Those brands came out early and said, "We know that our retail environments are closed. We know we're going to have issues. We're going to do the best that we can. We're going to give you what it is that you're going to ask for. We're going to offer you much value add, so much free information and advice. We're going to package it up with our product and that's what we're going to do.”
Those brands that didn't do that, the ostrich that buried their head in the sand and said, "We're just going to weather the storm," they're almost dead. They're the ones that are struggling now. They were tone-deaf to the conversation of what consumers were saying. Consumers are now saying, "I'm going to purchase from a brand. Price is not necessarily the issue because I've got all of this extra disposable income now that I'm not spending because I'm not going out. We'll spend it with you. I will spend it online and I will spend a little bit more but I want to know, are you sustainable?"
Are you giving back to the country of origin? How are you supporting your employees? What is your mandate to the environment? What are you doing to future-proof your business? Are you going to be here today and gone tomorrow? I need to know all of that. Having said that, "What's your legacy to leave to me and my family?" It's all of these now come into play. What's interesting is that family businesses already knew this. Family businesses have been practicing this model of business for generations because that's how you pass down the tradition.
Embodying these elements that are important from family member to family member, this is where branding has now gone. This is where we've arrived. We need to pass our product down and the legacy of our product into the hand of one consumer and have that consumer turn into a brand advocate for us and pass it down to another consumer and another. An influencer is not going to assist you in doing that necessarily. This is what's happened. We've done almost a 360 degree and some people will argue, "We've gone back to the old school in the way we used to do business." Yes, we have. Except that we've enhanced it now, we've amplified it because we've got so much data and tech that's available so that we can scale very quickly and we can do it very cost-effectively.
Think of brands like Uber. The greatest fleet in the world has zero inventory. Think of Airbnb, the largest, most expensive property portfolio in the world don't have a single mortgage on their books. This is where we're going. This is the clicks and mortar model of doing business moving forward and it's not just going to affect retail. In fact, as a consumer, we're going to see it occurring retail first and then we're going to see it adopted by multiple other industries after that.
That mass consumerism of the '80s, '90s and 2000s has been replaced by value-added buying. People want to see a legacy. They want to see the value. They want to see, "Are you going to be here for us in the long-term?" It's not so much the see and be seen mentality of having that brand new BGBG bag or whatever it is. It's making sure that whatever you're going to buy is going to be quality, classic and be able to hang onto it for time and time again. My question to you is, you brought up data and you brought up the huge consumerism data that are available there. How are big brands and medium-sized brands leveraging that data to better understand how to sell to and communicate with this day’s consumer?
Let's understand the definition of data. Some people assume that data is a set of numbers that you procure from a piece of technology or from a piece of software. Let's understand that fundamental data is a set of information that you procure from an environment and you use it to assess. The old traditional retailer, the storeowner, even the grocery store owner that would walk the floor and watched what the consumers were doing. Where they were walking, looking at their physical footprint, how they were shopping, how they were putting groceries in their bag, how they would interact at the cashier and how they would exit the store, observation is a form of data. Watching a footprint is a form of data.
These days, anything is a form of data. We're familiar with things like heat mapping on a website and A/B split testing. We're familiar with data being captured in terms of the data that we volunteer when we join a membership site, for example. Those brands that are using data well are looking beyond the numbers. They're saying, "Online, this is the frequency of transaction, this is the dollar value and this is how, when and why they're purchasing." In-store, they're looking at that. Now they're marrying the two up and saying, "What can we replicate in-store that online can't do? What can we bring online that they used to do in-store that we want to give them the option?" Out of that, they've created hybrid business models.
I'll give you a point in case there are some fashion brands now that have rebuilt their online ventures to say, "You can shop online but if you're unsure about what to shop for or how to shop, you can book in a time to have a virtual styling session with one of our stylists. We will curate a look for you based on your measurements and based on the data you've already put in and before you come into our session, we've already got examples to show you." That's a good use of using data. Using what the retail shop in physical form would have done with the stylists on the floor, except we're bringing it online and vice versa. When restrictions are lifted and we're able to enter a retail environment, those retail stores that have stockpiled from the floor right through to the ceiling will have to rethink that because the retail store will no longer be about selling.
It will be about building relationships. These retail outlets will become public relations hubs. Hubs where ambassadors of the brand will literally stay in-store, sit and have a coffee. Size you up, help you curate a look and give you real-time product information, but you might not necessarily buy in-store. You may choose to go home and purchase from your living room. It doesn't mean that your transaction is any less or more valuable, whether you've done it online or whether you've done it physically in store. Those retailers and brands that have used data very well have found a marriage and created a good union with what's physically and technologically possible right now to marry that experience up and make it more seamless.
It makes all the sense in the world because I can go to the store. I can look, touch and feel things but I don't have to worry about paying an enormous amount of people to have all the stock there. The stock is in one central location. I don't have to worry about it being ripped or snagged because people have been trying on and off. I look at it. I say, "That's basically what it looks like. That's how it's going to look and feel." Now, I get a brand fresh new one off the shelf from the central distribution and it makes it almost a seamless experience. It's a matter of rethinking, not only as a retailer but as a consumer, how we interact. That's an interesting thought process to sit there and say, "It's not just the retailers coming up with new and inventive ways to engage their audience but it's enabling the consumer to be able to engage with you in ways that make sense for them."
That raises a very interesting question. What's going to happen to our beloved shopping mall and retail outlet? We won't go there to hang out anymore and be seen with our brands. Many of these commercial spaces will have a lot of free commercial space lifts. What are they going to do with that vacant space? The definition of going to the mall isn't going to be about shopping anymore. If we're going to the mall, what's going to attract us. If we'd go into a shopping center, what's going to keep us in there? If you think about it, our lifestyles have been seriously merged. There is no delineation anymore between work, leisure and education. It's all merged into one. If we're going out as a family or if we're going out as an individual and we're going to go to the shopping mall or the shopping center, why are we going there?
We need to see shopping centers re-imagined and shopping malls that have running tracks inside them. Small business hubs that you can hire a little coffee shop, booths and mini-meeting rooms in 15 and 20-minute lots, because how many times have you been at the shopping mall and ups someone from work calls or a client calls. You need to take it but you need to have the kids occupied. What are they going to do? We're going to see movie theaters from large-scale theaters that can pack hundreds of people into mini-family rooms that you can hire that 6, 8 or 10 people. You hire that and watch a new premier movie on demand and order your food in while you go out and do business for 1 or 2 hours.
We're going to see workshop centers, hubs where you can go to some of the recreation and hobby stores and purchase that model airplane. Then go to one of the workshop centers with your dad, your mom or your siblings and make that plane and then go. We have to see this space the way that we've defined our childhood and the way that we've defined our leisure. Redefine now. It's not going to be about shopping because, quite frankly, I could go into a retail store, try it on, feel the product and what have you. They don't happen to have my size but I can walk out of the store, pick up my mobile device and log online. They already know my details because I'm a member. Order it and I can guarantee you that within 24 to 48 hours, it will be at my door in a box, fresh, new to my size, in the color that I want, and no one else has tried it on. I've had a great day out with my family.
There could be QR codes right next to the piece that you're feeling right there and be able to order it from your app right then and there within the store. By the time you've walked out, you've done all your shopping but you're not walking away with the packaging.
There are industries such as casinos. They do this very well. Imagine walking into your favorite store that got Bluetooth technology or Wi-Fi technology that interacts with your phone. They know you're in the store. They've brought out your favorite beverage. They know you're on the floor. "Stella, it's great to see you again. The last time you were in here, you were looking at the boucle jacket with the gold trim. Are you still considering that?" What would that do for a relationship rather than, "How are you? What can I help you with," and you're anonymous.
All of a sudden, a coupon shows up that says, "She was here six weeks ago, and she's back in again. She's looking at the same thing." All of a sudden, a coupon shows up on the phone. It is becoming far more hyper-personal. It's become hyper-relational and it's also being able to communicate with people in ways that make sense to them.
In using all of the jargon, marketing of brands across omnichannel or multiple channels with dynamic, which is real-time information that's highly personalized, is already here. We're just not using it to the extent that it could be, but we will very soon.
This has been absolutely fascinating. The world has changed and will change again. As consumers, brands and human beings, all we can do is keep looking at where we are and being able to evolve and be resilient to be understanding of what our consumers are going to want.
It's classic Darwinism now where consumers are concerned. It is not the strongest of the species or the most intelligent that will survive. It is those adaptable to change.
What is the best way for people to get in touch with you?
My name is Stella Gianotto. It's very unique. There's only one in the world. You will easily find me on LinkedIn, Instagram and Facebook. You could also take a look at the YouTube channel, but that's under BrandForBrands.com. There's the website too with many different articles on the blog and so forth. Any way you like.
I got one last question and this is the question I asked everybody before you get out the door. As you leave a meeting and you get in your car and drive away, what's the one thing you want people to think about you when you're not in the room?
I like people to think, "Stella understood us. She got us. She knows us. We're comfortable that she is going to be able to futurize our business and we're going to be sustainable." That's what I want people to remember.
Stella, thank you for everything. Thanks for keeping one eye on the future and one eye on the present and enabling brands to become better because we all need to move in a forward direction.
Yes, we do.
Stella Gianotto is a Consumer Futurist working with retail brands to reimagine their environment, increase market share, and to create hybrid business models for sustainability. She helps retailers understand their consumer's behavior to create brand advocates and repeat customers, for life.
With 25 years of experience as a Branding Expert and the Creative Director at the Brand for Brands Agency, she has delivered over 1,000 brands globally, received multiple business awards including Best Brand Agency Sydney 2019.
Stella’s industry awards and presence have led to her contribution to several books, Keeping Retail Alive, Marketing Brands Made Easy, Social Media Marketing: Write Up Your Tweet, and Well Spun: Big PR and Social Media Ideas for Small Business.
For more information go to www.brandforbrands.com/stella-gianotto/
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