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Here at TBWA, we dont all claim to be retail


experts. Indeed, the study you re about to read
was conducted partly to get smart in this sector.
Thats not to say it wasnt ambitious.
Drawing on our international network, we
looked for retail trends and disruptions in 32 markets
worldwide. We studied not only food retailing, but
more than 15 different categories, including bank
ing and telecoms. Importantly, we did not
cover just our own clients in fact, most of the com
panies featured in this book are not TBWA clients.
We received suggestions for more than 150
ongoing disruptions, as well as 400 historical ones.
The material weighed in at about 3,500 pages.
Over a considerable period of time, we whittled
this down to our 55 favourite case studies. And then
we chose 21 to present to you in this book.
Now it is complete, we hope the study will
spark a dialogue between TBWA, the retail sector
and all those who are interested in this fascinating
business.

Introduction

One field we can claim to be experts in is


Disruption. After all, we invented it.
To be more accurate, the father of the theory
is TBWA Chairman Jean-Marie Dru, who wrote
his first book on the subject simply called Disruption
in 1996. Two more volumes have followed. But
the seeds of Disruption go back to the 1980s, when
Jean-Marie Dru co-founded the French agency
BDDP. The agency specialized in helping problem
brands. It did so by seeking solutions that were
drastic and intrusive, provoking a rupture with the
past. This evolved into Disruption: a controlled but
dramatic change. It soon became apparent
that successful brands could benefit from Disruption,
too. Even the most solid brand needs to constantly
criticize and push itself if it is to thrive.

Disrupti
on
is abou
t
challen
ging
rules

s
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p
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Di
r
e
n
n
i
w
e
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a
l
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a
t
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in

When BDDP merged with TBWA (and


subsequently joined forces with swashbuckling
Los Angeles agency Chiat/Day), Disruption slowly
seeped into the culture of the organization. John
Hunt, of TBWAs South African office, began
staging Disruption Days for clients. News of the
success and popularity of these brainstorming
sessions spread around the agency. Finally,
Disruption became the backbone of TBWAs
approach, worldwide.
Disruption is about challenging rules. Its
about identifying the self-imposed restrictions that
stifle brands, companies and individuals from true
creativity. We call these restrictions conventions.
The disruptive idea is one that overturns these
conventions and allows a company to adopt a
unique standpoint. The summary that outlines this
new positioning is known as the vision.
Over the years weve worked with many
visionary clients. If Apple is perceived as a brand
that makes tools for creative minds as opposed to
a computer company its partly due to the disruptive
approach that we ve supported. Disruption is all
about thinking different.

Introduction

For Adidas, we helped refine the notion that


sport is about finding your limits and overcoming
them. With training, determination and the right
equipment, something that at first seemed impossible
becomes achievable. Impossible is not a fact: its
a phase. The vision that sprang out of this is summed
up by the words Impossible is nothing.
One of our favourite disruptions involved
Pedigree. The dog food company was finding it
difficult to stand out amid an array of conventional
advertising. TBWA came to the conclusion that dog
food ads failed to capture the close relationship
people had with their pets. People love their pets
so much that dogs are often featured in family
photographs. So Pedigree adopted an ambitious
stance: Everything Pedigree does is done for the

Introduction

love of dogs. That changed not only the brands


positioning, but also its behaviour. Pedigree employ
ees were now invited to bring their pets to work.
Salespeople could visit their clients with their dogs.
The company became dog crazy.
By now you get the point: disruptive companies
are original thinkers. Their disruptive tendencies
allow them to take a leadership position and
distance themselves from their competitors. Disruptors
are winners.

As we said at the beginning, the aim of


this project was not to reposition ourselves as retail
experts. Our skill lies in creating disruptions and
applying them using the tools we call Media Arts.
But we are also keen observers of marketing and
communication practices. This book, then, is a series
of observations. And, we strongly hope, inspirations.

D i s ru p to
rs
are win
ners

Disr
upti
com
ve
p
a
nies
are
orig
thin
i
n
al
kers

All our retail cases prove this point. Many


of them feature companies that were solid but
unremarkable performers before they decided to
take a disruptive approach. Thailands Krung Thai
bank transformed itself from a stuffy bureaucratic
organization into a youth brand. And environmentally
neutral Marks & Spencer became one of the UKs
most admired green companies within a year.
One of the most successful retailers in the
world, the UKs Tesco, has achieved enduring success
because it has shattered a convention: you cant
have low prices and high quality. An unflinching
commitment to both has allowed Tesco to sell more
and grow bigger. Now, its sheer scale allows it to
buy produce for less, thus keeping prices down and
quality high. We could write an entire book about
Tesco, so we have not included it among our top
case studies. But we d be happy to share our
Tesco findings with you as well as all the other
case studies that didnt make it into the book. Just get
in touch!

Introduction

TE
N
RE
G
A N TA I LO
L
BA
TR D
L
EN CO
DS N
SU
M
ER
Our study of the worlds most innovative retailers
left us marvelling at the number and diversity of methods
that are being used to seduce and serve todays consum
ers. The examples in this publication are the crme de la
crme: a handpicked selection of our favourite cases.

Trends

But first, in order to navigate the rapidly changing


world of retail, we identified ten trends that are
impacting consumers now. But beware: trends are
tricky. The concept of disruption is all about overturning
conventions. To emulate a trend is to create a conven
tion. This book should inspire you to set trends, not
slavishly follow them.
Of course, you may be able to come up with a
disruptive concept within one of these trends. If so, we
applaud you. In the meantime, peruse this shopping list.

ENABLEMENT
THROUGH
TECHNOLOGY

These days, when you book a hotel, whats the first thing you do? If youre anything like us,
you check the guest reviews online. The hotels website showed you spacious rooms and an infinity pool
but it didnt mention the construction site next door.
Consumers are better informed and more demanding than ever. Blogs, social networking, price
comparison and travel sites allow them to uncover the truth about brands. And brands that fail to provide
impeccable service will be exposed.
Some brands have bravely taken matters into their own hands. For instance, American Apparel
customers can critique their purchases on the retailers site. Uncensored feedback strengthens the relationship
with the consumer.
Technology has put the consumer in the driving seat. Self-check-outs and cashless payment (just
swipe and go) are creating a swift and efficient shopping experience. There are even stores that turn windowshopping into a reality. Ralph Lauren has experimented with touch-screen window displays. Customers can
touch the item they want and then pay for it by swiping their credit card through a wall-mounted reader.
Or they can create a digital shopping cart and pay for the items online the next morning.
All of these developments will have a massive impact on store design and shopping habits.

S U P P O RT T H E
T I M E - S TA R V E D
CONSUMER

We know youre in a hurry, so well make this quick. Today, time is a luxury. According to Trend
watching.com, half of US consumers now say that a lack of time is a bigger problem than a lack of
money . Even teenagers feel there are not enough hours in the day. New services and solutions are spring
ing up to help consumers grab back some time.
Concierge services are becoming familiar. Door-to-door luggage delivery services help time-starved
travellers avoid lines at check-in. A site called City Servant in the UK offers a whole range of services, from
supermarket shopping to dry cleaning. Just fill in the form online and at one click a concierge comes to
your aid.
The existence of magazines like Organize in the US underlines consumers deep-seated desire to
bring order to their busy lives. Brands that wade into the breach will win.

Trends

NO MORE
ONE SIZE
FITS ALL

Todays consumers defy easy categorization. Populations are becoming more cosmopolitan as
borderlines blur and overseas living becomes more accessible. Age does not define attitude: the boomer
generation refuses to grow old. Can I borrow your PlayStation, grandpa? Society is a kaleidoscope of
social situations: singles, non-married couples, empty nesters, older singles. Retail concepts need to reflect
this diversity.
The resurgence of items made just for you is part of this trend. Objects can be personalized or
made to measure, from jeans to laptop computers.
Practically the only thing that unifies consumers is their expectance of high standards. Price is no
longer a deciding factor. Todays shopper demands value AND quality. Hard discounters are being
forced to rethink because cheap and cheerful is not enough to retain customers. Fast fashion must offer
cut-priced clothing AND cutting-edge designs.
Consumers refuse to be trapped in class categories. If they cant afford a Louis Vuitton handbag or a
Prada dress, they can rent one for the evening via an online service. Be whoever you want to be, as long
as youre unique.

COST CONVERGENCE
OR THE RACE TO
THE MIDDLE MARKET

Dont mess with Mister In-between. Luxury brands introduced accessible items in order to boost their
profits and satisfy shareholders. As a result, consumers developed a taste for luxury and began to won
der why cheap had to equal nasty. In order to please them, retailers like H & M, Zara, Target and Japans
Uniqlo began trading up, improving the retail environment and adding catwalk zest to designs. H & M
even brought in the firepower of designers like Karl Lagerfeld and Stella McCartney.
Other sectors have followed suit: McDonalds is giving many of its restaurants a sleek makeover.
Burger King has launched the worlds most expensive burger, made of Kobe beef. But with high-end mov
ing down and high street trading up, some brands may be left floundering in the middle. Accessible luxury
and cheap chic are both on the money. Retailers selling so-so goods at mid-market prices should start wor
rying, and this squeeze is likely to intensify within the context of the global credit crunch.

Trends

SUPER BRANDS
KEEP ROLLING
O N ward

E- COMMERCE
KEEPS
GROWING

The giants will not be vanquished. Despite occasionally expressing concern about the growing reach
of retail super brands, consumers continue to use them. Thats because the sheer scale and power of WalMart, Carrefour, Royal Ahold, Metro Group, Tesco and their ilk allows them to constantly innovate. Super
brands can cater to every whim of todays super demanding consumers.
These brands exist in many sizes, from hypermarket to neighbourhood store not to mention website
with home delivery. They go far beyond food, to provide everything from CDs and books to furniture. They
even offer travel agents and financial services. They have launched organic, fair trade and eco lines. And
they cater to every taste and budget, from cut -price to gourmet. In a time-starved world, they offer a onestop shop.
But retailers have also become skilled in striking partnerships with complementary brands: think of
branches of Starbucks within Borders bookstores in the UK, or McDonalds in Wal-Mart in the US. Well
see more retail brands joining forces to launch store within store concepts.

The store may be the star, but the role of the web will continue to expand in the coming years.
In the US, onlines share of retail sales is expected to reach 6.9% in 2011 ( Jupiter Research). In
larger European markets it could hit 11% (Forrester) and in China it is expected to sidle up to 3%. As you
can see from these figures, the web is not a threat to the traditional retail experience but rather a comple
ment to the bricks and mortar setting.
According to WGSN, vast numbers of consumers as many as 69% research product features
online before buying. And 68% compare prices so they know what they should be paying in stores. As for
online purchases, books still lead the way (according to Nielsen), with clothing, accessories and shoes in
second place. Videos, DVDs and games are third and airline tickets and reservations are fourth.
Even the most technophobe retailers such as the luxury brands have now grasped that an online
shopping offer is an essential part of the marketing mix. But they should also be present on community sites
such as eBay, Facebook and MySpace.

Trends

10

RETAILERS
BECOME
BRAND MANAGERS

Private labels are here to stay, and they re expected to make up 30% of global food sales by 2020
(Admap). In Northern Europe, private labels account for some 40% of sales, falling to 30% in Southern
Europe and 20% in the Eastern countries. In the US, sales stand at 19%. Interestingly, only 5% of brandaddicted Asians prefer to buy products labelled by their retailer. Watch the emerging markets for this grow
ing trend.
The success of private labels is no doubt due to their flexibility. Retailers now have a range for
everyone. Take Carrefour in France as one example. It has several different own brands, covering budget,
organic, baby, mid-range, low calories, kids, gourmet, exotic and traditional. In the UK, Tesco customers
know they can look to the higher-priced Tesco Finest range when they want a gourmet treat.

WELL-BEING,
THE PLANET
AND ME

Ecological issues, ethical consumption and health consciousness have somehow become intertwined
in an aware citizen retail trend that will only get bigger. As IPSOS put it: Until recently the concept of
green or being green was a fringe issue Moving forward, being green will not only become main
stream, but will become the norm for most consumers.
Retailers are still coming to terms with the pressure they face to go green. Many of them have only
superficially addressed the issue, which leaves them open to charges of greenwashing. However, Marks
& Spencer in the UK has publically promised to overhaul its business model, putting the environment at the
heart of everything it does.
Meanwhile, concern about fair trade and the carbon footprint left by imported foodstuffs has driven
an ethical sourcing trend. The provenance of food is clearly marked, allowing consumers to favour local
producers or those who are paid fairly for the crops they grow.
Finally, concerns about over-consumption, diet and obesity are driving a health conscious trend.
Many food retailers now indicate the levels of fat, saturates, sugar and salt in foods. Advertising
campaigns and in-store marketing are pushing healthy eating plans and prominently displaying fruit and
vegetables. And fast food giants face even closer scrutiny.

11

Trends

SHOPPING
CENTRES
ARE SEGMENTING

The mall is about to mutate. The shopping centre as we know it is a jumble of different universes,
experiences and offers, crossing many price ranges and customer typologies. Over the next few years,
new shopping centres will have coherent identities, targeting particular styles of shoppers. Tokyos Midtown
complex, opened in 2007, set the scene: shopping, office, residential, hotel and leisure space, but all at
a luxury level.
Says Trendwatching.com: The shopping centre of the future will need a clear market position
the most promising position for malls will be value, entertainment, luxury or lifestyle driven.

10

EXPERIENCE
EXCELS

Lets face it: you re the customer who has everything. You ve shopped til youve dropped; your
home is bursting with stuff. What could possibly drive you into another store? Lets see. Entertainment?
As trend-tracking organization WGSN says: The big trend is for more engaging store environments that
encourage interaction and entertainment e.g. the Apple Store.
Providing an exciting in-store experience encourages customers to linger. And increased dwell time
boosts sales and long-term loyalty. WGSN adds: Never before has the physical store mattered so much
for making purchase decisions. Up to 75% of all purchase decisions are made in-store and not on the
internet.
Samsung has recognized this by opening an Experience Store in New York. The equipment is not
for sale its just there to play with. That way, customers can have all the fun and get someone else to do
the heavy lifting, by completing their purchase online when they get back home.

Trends

12

To get your personal copy of the complete


document including 21 case studies go to
disruptioninretail.com and send an e-mail.
Disruption in Retail 2008, TBWA Europe.
All rights reserved. No part of the document may
be reproduced or stored in any form or by any
means electronic, mechanical, photocopy,
recording or otherwise without the prior
permission of TBWA Europe.

tbwa.com