Modern values
"Pile it high, sell it cheap" is typically what comes to mind when people think of value retailers, but in recent years some value operators have been modernising their propositions with clever innovations.
We pick out four types of innovation which we think are particularly interesting:
Store concepts
The notion of experiential shopping is not lost to the value sector. Dutch lifestyle value retailer Hema has been focusing on UK expansion, having opened a London flagship store with products showcased around themes such as `study', `living' and `cook' that enable people to shop with greater inspiration. The brand has also partnered with Next, opening a shop-in-shop allowing it to access a customer that may not typically shop in their stores. The concession showcases a curated range that looks more in line with a mid-market retail experience.
In the US, Dollar General has introduced DGX, a smaller convenience concept putting urban millennials, the typical grab and goers, at the centre of their growth plans. Dollar General is also rolling out in-store technology which includes scan and go and payments app DG GO! The app includes a checkout feature which allows customer to track expenditure and has been popular as it proves useful to a customer that wishes to track their budgeting.
US value retailer Target has invested in the functionality of its app to respond to customer pain-points by aiding customers with in-store navigation through interactive maps and offering relevant promotions to what they’re browsing in-store with beacon technology.
Leveraging social media
A strong online presence and rich content is no longer just reserved for mid-market or luxury retail, particularly in an age where there is no longer a stigma around wearing a Primark outfit with a Longchamp bag. At over 7 million followers, Primark effectively uses social media influencers and lifestyle bloggers to advertise its clothing in a more relatable manner. Though the website is not shoppable, Primark feature user-generated content to provide inspiration to shoppers. As Instagram trials the function that allows shoppers to buy products directly from influencers’ posts, social media is increasingly poised to be a pillar of multichannel marketing strategies.
Delivery
Target has partnered with fulfilment provider Shipt to offer same-day delivery for core product categories in order to compete with the likes of Amazon. Target has also launched the subscription service Target Beauty Box, a combination of beauty products at the affordable $7 price-point, as well as Harry’s, a shaving kit subscription.
Championing sustainability
Affordable fast fashion brands such as H&M and Pretty Little Thing understand that the millennial and Gen Z customer is becoming more environmentally conscious. In response, H&M now accepts unwanted clothes by any brand and in any condition at their stores which are then reused, re-worn or recycled with 0% going to landfill. Pretty Little Thing has partnered with clothes recycling app Regain which allows users to donate unwanted clothes at pick-up points for reuse to prevent them heading to landfill. Meanwhile Lindex has a new sustainability promise which focuses on the circular economy whereby it looks to prolong the lifetime of its products by setting a target of having 100% of materials recycled and sustainably sourced by 2025.
Being competitive on price and price only is no longer enough for value retailers, innovating the offer and developing the value proposition in a way that is relevant to their target customer is increasingly important, not only to grow but to survive.
Aman Kaur Paul