1. WHI T e PAPeR
Retail
Renegades By LeSLie cLiFFord and Laura moSer
g2 uS a
W
hat comes to mind when you hear the term “renegade?” Do you think
deserter? Outlaw? While the dictionary definition has a negative
connotation — “an individual who rejects lawful or conventional
behavior” — renegades often have a positive impact on culture. Many
are rejected by society during their lifetimes only to be admired later as innovators.
From Mark Zuckerberg (father of Facebook) to to ground both products and product selection in
the Grateful Dead (who believed music was becoming emotional needs not broadly acknowledged by other
too commercialized and encouraged fans to tape their marketers. These retail mavericks link their items
live concerts), renegades have significantly enhanced with unexpected services that let shoppers fulfill
our lives. Put another way, renegades often provide a intangible needs — even somewhat “darker desires.”
glimpse into the future. In Japan, Nike opened a retail outlet with a
Depending on your perspective, a “retail” renegade’s concept inspired by Tokyo’s Harajuku neighborhood —
actions could range from a monumental shift to a more where originality is critical to defining your personal
subtle strategy. We find both to be relevant. Our goal street style — and features a NIKEiD Generator and
is to share some of the most intriguing global examples, NIKEiD Studio. These tools elevate color selection to
highlight commonalities and provide inspiration for the art-and-science of creating a unique color “identity.”
your quest to establish deeper shopper connections. The NIKEiD Generator, an interactive kiosk that scans
As competition across many channels escalates, shoppers’ clothes, creates a personalized color shade.
retailers have increased the sophistication of all aspects Shoppers take this shade to the NIKEiD Studio for
of their marketing mix. Our research utilizes the five one-off Nike shoes, stickers and wallpaper, allowing
Ps (product, people, price, place and promotion) as Nike to tap into the youthful craving for a new form
a framework to share examples of those who buck of individuality.
convention. Our research took us on a metaphoric Wet Seal uses technology to provide
shopping spree around the world, where we found customization that allows shoppers to virtually
some innovative, unusual, and even irrational examples “snoop” into their friends’ closets before committing
of retail (see chart). to a purchase. The retailer’s in-store kiosks and
While vastly different in many ways, our Fashion Community site enables shoppers of their
renegades share several traits we believe will shape brick-and-mortar and online outlets to create and post
the industry over the next five years. their personal outfits.
Roughly 20,000 new combinations are created
fulfilling deepeR desiRes each month. This allows both shoppers and Wet Seal
The first “P” in most marketing models refers to get a pulse on what’s hot for the season. While
to product. Renegade retailers have found ways fashion is often touted as a means of self-expression,
34 THe HuB MARCH/APRIL 2011

2. Blazing the retail trail toward
deeper shopper connections.
teens still need assurance that their tastes are aligned destroy inanimate objects. This revolutionary offering
with those of their friends. recognizes the emotional need that can drive the
On a more extreme level, a group of retailers shopping trip itself — pent-up frustration.
in China created a women-only “venting store.”
Female shoppers who spend a given amount at select a bRoadeR VieW
retailers in the mall receive a voucher for one minute Most retailers spend a considerable amount
of destructive bliss — complete with a protective of time, money and energy building personal
helmet. For 60 seconds, shoppers can smash and connections with the people who shop their stores.
Renegades, however, take a broader view of their
shopper connections and help individuals build ties
with other shoppers, the community-at-large and even
competitive retailers.
Search for Renegades Tesco is currently testing a ride-share program
in London. The expected execution of this initiative
Our metaphoric quest for renegades
includes helping loyalty-card members arrange carpools
included 185 retailers across 12 categories. to three north London stores. The irrational, renegade
component includes also facilitating carpools to
Number of school, rides to sporting events and transportation
Channels Retailers to shows. Tesco may or may not receive any direct
sales from this aspect of the service, but we suspect
Food, Drug, shoppers who participate will feel a deeper sense of
Mass, Grocery, loyalty — perhaps obligation — to the retailer.
53 A grocery store in Oregon, Mercado Los Gavilanes,
C-store, Club,
moves beyond food products to hosting anniversary
Value/Discount parties, church fundraisers and teen nights. This US
retailer of Latin products has converted an unused
Fashion 33 storeroom into an events center that accommodates
up to 500 people. The room offers a stage, bar,
Restaurants 27 restroom and kitchen as well as a children’s room
adjacent to the main hall. This service not only
Department increases the store’s profit per-square-foot, it also
26 recognizes a strong community need unrelated to
stores
food. Shoppers have begun to see the store as more
than a business; it’s now a destination.
Liquor:
14 The owner of a small London coffee outlet, Gwilym
Private & Chain Davies, turns the very definition of loyalty on its head.
Winner of the 2009 UK Barista Championship, Davies’
electronics 13 love of the category runs deep. He feels education is
key to coffee appreciation and rewards his patrons for
Cash & Carry visiting other outlets. Davies provides a dis-loyalty
10
card that features eight, high-quality coffee outlets
across east London. Once individuals visit each of
DIY/Hardware 9 the listed venues, Davies rewards their category
exploration with a free cup of his own brew. This
twist on relationship marketing has already spurred
S o u r c e : G2 USA imitations in Seattle and Toronto.
MARCH/APRIL 2011 THe HuB 35

3. defying Channel noRMs Adidas shoes and clothing options that shoppers
Pricing is the backbone of all business models can don for an immediate, and quite literal, test
and therefore the least likely of the Ps to stray from run. Included on-site are 16 shower cubicles and 248
conventional strategies. Most retailers resort to lockers for rent, accessible to the public-at-large.
established channel norms to define their pricing Adidas’ extreme destination demonstrates an
structure. Our renegades have discovered ways to innate understanding of the runner’s mindset: “I
defy channel norms through pricing strategies that need to feel how it performs.” With a huge selection
express their unique DNA. to choose from, runners can sample endless product
Topshop, a global fashion specialty store with combinations for the ultimate purchase confidence.
more than 400 outlets, has a brave and irreverent Like Adidas, Luxottica, a manufacturer and
approach to style and a product range that has retailer of eyewear, recognizes its products are
captured the imaginations of fashion-conscious fashion statements as well as functional accessories;
shoppers. This specialty fashion retailer has a price therefore, real-world trial is key. At the EyeHub,
offering that aligns with how women stock their Luxottica provides shoppers a simulator room to
closet. Merchandise ranges from $20 sweatshirts to evaluate glare and wind resistance. For the sports
$800 designer dresses — but all are sold in a unique, enthusiast, Luxottica has a treadmill and exercise
fashion-forward environment. At Topshop, edgy style bike to test eyewear in real-world, everyday situations.
drives fast-turn inventory and price does not define Fashionista purists can take a touch-screen photo
them or their clientele. of themselves wearing each option and select from an
The Panera Cares Café also refines the price model. array of printouts. Shopping with kids? No problem.
This bakery café suggests a recommended price for The store has a dedicated play area for children.
each item, but customers pay what they can or think Going the extra mile to provide shoppers with real-
is fair. Around 65 percent pay the recommended price world conditions underscores a true understanding of
while others pay more or less, and some pay nothing how to maximize the role that place can play.
at all. Currently, they are operating at a nearly In their relentless pursuit of new outlets and
breakeven status and have two outlets, with expansion formats for delivering products to shoppers in real
planned in 2011. In an environment where consumers time, some businesses are proving to be extremely
are increasingly concerned about their communities innovative. Travelers, hotel guests and visitors to
and the role they can play in supporting them, this fast-food restaurants can now use vending machines
retail price model is a daring demonstration of how to buy items ranging from prescriptions to fruits and
charitable retail programs can be self-sustaining vegetables and even freshly baked pizza. Best Buy
entities, even in the toughest of times. recently installed more than 100 vending kiosks at
airports with high-end electronics — from digital
Real-life Retail cameras to portable gaming devices — all catering to
One of the most interesting aspects of retail on-the-go commuters.
renegades is how they approach place. Shoppers’ Taking the number-one position in renegade
heightened focus on options, authenticity and vending retail, a butcher shop in Northern Spain
immediacy has these retailers going to extremes in understands that people do not always think about
terms of interior design and shopper experience. dinner until it is dinnertime. They have developed a
Incorporating real-life context into your retail format touch-screen vending machine in front of the store;
or distribution point provides instant relevance and a shoppers can purchase fresh steak, poultry or hamburger
compelling competitive edge. around the clock. If you don’t speak Spanish, no worries,
A Tokyo Adidas outlet has taken a bold move in the vending machine recognizes multiple languages.
demonstrating how flexible the place of business can
be. Located near Imperial Palace, a popular area for th e h igh Roa d to sales Results
the city’s runners, the Adidas Runbase Store reinvents Conventional retail approaches promotion as
the traditional sports gear channel. Expert staff is a short-term sales driver that directly benefits the
on hand to help with a broad array of cutting-edge retailer. For many years, this has been a winning
36 THe HuB MARCH/APRIL 2011

4. formula to provide a competitive edge, drive traffic renegade perspective can infiltrate your initiatives:
and increase overall basket. Leaders today, however,
• Align the product selection process with actual
have discovered ways to put their own financial needs
product usage traits. Look for even small
on equal footing with prominent social movements.
modifications of your physical environment that
Promotional efforts that take a less direct route
will help shoppers enjoy the process more, feel
can instill a deeper expression of brand positioning or
better about their selection and perhaps even
create a more compelling point-of-difference during
increase their basket size.
competitive sales periods. Renegades have the same
goal as their competitors — to drive return-on- • How does your pricing structure limit you? Look
investment — but deliver programs anchored in ideas for ways to expand your positioning in shoppers’
bigger than savings. eyes via different pricing structures. Identify what
The Waffle Shop is a neighborhood sit-down factors truly influence the selection and purchase
restaurant in Pittsburgh. It operates a take-out window of your products. Look for ways to link these need-
that sells food from countries engaged in conflict with based factors more strongly with your pricing
the United States. The goal is to bring people from all structure.
walks of life together over a common element (food),
• Think of your retail outlets as individuals living
encourage dialogue on challenging topics, and share
within a larger community. What roles and
them via a live, streaming talk show.
responsibilities do other residents have? Does your
This promotion increases foot traffic as customers
outlet carry its weight within the community?
gather to participate in community discussions and
shared enlightenment. Its success has gained the • Does your view of relationship marketing
attention of retailers like Whole Foods, which is now a incorporate shopper-to-shopper links, cross-
contributing sponsor of the promotion. generational ties or even cross-cultural connections?
Desigual, a Spanish clothing retailer, understands • Zig when everyone else is zagging. Many renegades
the power behind the idea of random acts of kindness. do not aspire to be contrarians, but most just
It recently launched a program that rewards its shoppers refuse to take things on face value. They are open
for being kind to bloggers online. Desigual alerts its to examining multiple facets of their businesses,
fan base of favorite bloggers to target with cheerful placing bets and making investments without
comments; the first 100 to get a reply from the blogger guaranteed outcomes. Determine which aspects
each win a clothing item they have pre-selected of your business model are ripe for a “renegade
interest in. makeover” and do what feels right. n
All blogs are non-Desigual related, just destinations
that represent what they stand for. All participants in
the Happy Hunters program also receive a 20 percent
discount on Desigual items. Developing a promotion LESLIE CLIFFORD is executive director,
strategic planning and consumer
that exploits a behavior in current culture is a
insights at G2 USA. she has 20 years
compelling way to grab attention.
of research planning and shopper-
marketing experience across numerous
th i n K i ng l i K e a Renegade
industries. she can be reached at
Being a renegade takes more than just a willingness lclifford@g2.com.
to challenge convention. Renegades are tenacious and
passionate. They view obstacles as opportunities and LAURA MOSER is executive director,
retail strategy at G2 USA. Laura’s
believe that — with the freedom to fail — trial-and-error
charge is to lead integrated marketing
leads to true and lasting improvement.
efforts with Kraft, Target, P&G,
This last characteristic is a difficult pill to swallow Walmart, Heineken and Kroger,
and in conflict with many corporate environments. among others. she can be reached
In today’s corporate environment, it takes courage for at lmoser@g2.com.
retailers to adopt such an attitude. Here are ways a
MARCH/APRIL 2011 THe HuB 37