Master's students in marketing envision the future of retail

Master's degree students Jutta Pekkarinen, Nelli Pylvinen, Aino Valonen and Aino Malkamäki participated in the Retail Business Models and Marketing course offered by the Department of Marketing at the School of Business in spring 2023. They had an interest in the retail sector, and the course, taught in Finnish, also provided an opportunity to learn Finnish retail vocabulary. Furthermore, the foursome thought that it would be good for every business student to learn about the needs, perspectives and processes of the retail sector, as the products of so many companies are sold to consumers through retail channels.

During the course, the students completed an exercise in which they came up with ideas for a shop of the future. Jutta Pekkarinen and Nelli Pylvinen created a concept for a food shop and Aino Valonen and Aino Malkamäki for a clothes shop.

Food for the senses

For the exercise, Pekkarinen and Pylvinen examined previous research on trends in the retail sector and consumer behaviour. In addition, they asked a group of consumers aged 25–36 for their views on the grocery shops of the 2030s. They found that consumers wanted shopping to be easier and smoother than it currently is. Collecting basic products is seen as a tedious chore, and consumers would rather spend their time in the shop doing other things, such as exploring new products and tasting food samples. 

Based on these observations, the students created a grocery shop concept in which customers order everyday basic foodstuffs online and pick them up when leaving the shop. While in the shop, customers can focus on enjoying superior customer service and new experiences. 

Responsibility meets a positive shopping experience

The future clothes shop designed by Aino Valonen and Aino Malkamäki also invests in a multichannel approach. The guiding light of the concept is responsibility, which in this case means local products, recyclability, and reasonable and transparent pricing.

‘We know that 58% of consumers want their purchasing behaviour to be more responsible, but young and trend-conscious consumers may have difficulties finding responsibly produced clothes to their liking. Our clothes shop concept offers responsibly manufactured, stylish, affordable, easy-to-use and easy-to-combine everyday clothing for this target group consisting of 18–34-year-olds,’ Aino Valonen says.

‘The consumer interviews we carried out gave us the idea of adding a QR code to product price tags. By reading the code, customers can examine the factors affecting the price of the piece of clothing, such as the costs of manufacturing and logistics and the shop margin. The pre-order range, in which the customer can make small changes to the length of the sleeve or hem, also supports our basic idea of responsibility: we don’t want to produce anything that isn’t needed.’

Another important feature of the clothes shop concept is an omnichannel approach. It includes a brick-and-mortar shop where customers are met by a pleasant shop environment, friendly and helpful staff, limited collections, pop-up sales points and experiential events built around them. An online shop allows customers to order a piece of clothing to the brick-and-mortar shop, where they can try it on before making the final purchase decision. A mobile application can be used to see which sizes are available for fitting at the brick-and-mortar shop. 

‘The goal is that the omnichannel approach will create a seamless and easy customer experience, which we believe will increase customer loyalty to our brand,’ Aino Valonen says. 

The teacher responsible for the course is Professor Arto Lindblom. He explains that as part of the course students envision the future of the retail sector in small groups and work on target group choices, customer promises and competitive assets while taking into account various megatrends and silent signals.

‘This spring's exercises were of exceptionally high quality and showed how comprehensively young students understand the transformation of the retail sector and the ways in which stores can maintain their attractiveness. I was very impressed with the students' ability to envision the future,’ says Lindblom.

‘The themes that emerged from the exercises were the responsibility and multichannel nature of the retail sector and multisensory experiences. Students have a firm belief in the growth of the circular economy. It was also interesting to see that new technology did not play such an important role in future retail as could have been expected. In many exercises, brick-and-mortar shops continued to play a very important role for businesses.’

The students found the course useful and rewarding. 

‘The course included a lot of academic literature, but we got the most out of the hands-on exercises. Marketing studies combine creativity and analytical thinking in a fun way. Marketing expertise is needed in creating new concepts and identifying clients’ needs, and marketing is increasingly part of companies’ strategy work,’ Jutta Pekkarinen says.   

The retail sector is currently undergoing many reforms and businesses need high-quality expertise, robust know-how and creativity in order to cope in the changing competitive environment. According to Professor Lindblom, the course showed that the young students at the School of Business have enormous potential, a genuine interest in the retail sector and the ability to solve key challenges in an analytical and creative manner.