LSN : News : UK faces mounting debt concerns as buy now, pay later credit surges

World Retail Congress 2024 daily recap: Olympic fever, emotioneering and engaging Gen Z

Sephora Champs-Elysées, Paris, France

France – On 16 April, World Retail Congress 2024 opened in Paris, focusing on the theme of High-Performance Retail. The day started with a retail safari on the iconic Champs-Elysées, taking in JD Sports’ new flagship store opposite Louis Vuitton, which opened just last weekend ahead of the 2024 Olympic Games in July.

A few doors down, Sephora had renovated its existing premises, closing for six months to transform the space into a landmark destination for incoming tourists. Inspired by its location, the store has a pitched roof and central tiled ‘street’. Designed with Gen Z in mind, signage points to products trending on social media, with cult favourites Drunk Elephant and Sol De Janeiro taking up space near the front and Selena Gomez’s Rare Beauty taking over the beauty hub. For VIP clients, a private lounge area is available for appointment-only product demonstrations and brand takeovers.

One key topic of the day was how to bring humanity back into retail. Beth Ann Kaminkow, global chief commerce officer and CEO New York of VML, suggested two ways to engage consumers during the current global economic turbulence. The first is focusing on ‘personalAIsation’, where AI is used to offer a hyper-personal purchasing journey, something we covered in our macrotrend EQ-Commerce. The second is the need to respond to increased ‘emotioneering’ in which consumers are seeking brands that trigger emotion. One example of implementing these strategies came from Crate & Barrel, the US-based interiors brand, which walked us through its New York flagship store, where its home design service is responsible for over one-third of in-store sales. This bespoke service has become so popular with consumers that the company has been able to downsize to a smaller outlet with less off-the-shelf merchandise on display.

Closing the day, Anastasia Pelot, senior content marketing manager at YPulse, explored how to authentically engage with Gen Z, revealing that half the generation feel that brands don’t understand people their age. To combat this disconnection, she suggests building lasting relationships through conversational commerce, embedding core values in every interaction and prioritising value alignment throughout your strategy. To learn more about this contradictory generation, read our latest macrotrend, Gen Z Now and Next: From Vision to Contradiction.

Strategic opportunity

Consumers are embracing new technologies such as generative AI. Don’t be afraid to integrate these into each stage of the purchasing journey to create a seamless, hyper-personal experience

Nike House of Innovation transformed into breath-focused experience

BreathLab for Nike House of Innovation by Random Studio, France

Paris – Amsterdam-based Random Studio, in collaboration with Nike House of Innovation, has re-imagined the Paris-based store as an embodiment of the brand’s Holistic Fitness campaign, shifting the focus from movement to feeling. The redesigned space now acts as a living organism shaped by the power of breath, and invites customers to explore wellness through product innovation and breath work skills.

Interconnecting aesthetically and energetically, the space reflects the soft materiality of new products and the vitality of breath. A window display featuring mannequins in dynamic yoga poses celebrates the power of collective breath, leading visitors to the centrepiece: the BreathLab.

Guided by shifting light, visitors embark on a breath work exercise while a thermal camera captures their changing breath rate, projecting it as a unique ‘aura’ portrait. The space itself transforms in synch with the aura portrait, culminating in a collective gradient of breaths displayed on the walls of the BreathLab.

This immersive experience encourages visitors to explore their breath and collective energy, embodying Nike’s commitment to holistic wellness and innovation, and showing how a store can transform to offer consumers Retail Therapy.

Strategic Opportunity

Brands should consider how elements such as materials, colours, textures, sounds and lighting can influence the mood of an individual during their shopping experience and help to convey brand message through experience.

UK faces mounting debt concerns as buy now, pay later credit surges

Klarna

UK – Campaigners and lawmakers are calling for government action as the use of unregulated buy now, pay later (BNPL) credit skyrockets in the UK, raising fears of widespread financial strain among consumers.

According to data from Adobe Digital Insights released in April 2024, British consumers used BNPL services to finance £1.3bn ($1.7bn, €1.6bn) worth of online purchases in March 2024, up 8% year on year and representing 15.9% of total online spending for the month. Debt advisers warn that many individuals are turning to deferred payments for essential purchases, risking financial instability if they miss payments and face debt collection.

Morgan Wild, interim director of policy at Citizens Advice, told The Guardian there is an urgent need for regulation: ‘Our frontline advisers are now seeing three times as many people who need help to repay their debts as a result.’

Despite these concerns, some consumers are drawn to the convenience of BNPL deals, which typically offer interest-free instalments over three or four payments. But critics argue that the ease of access to credit can lead to overspending and debt accumulation.

In our Cost of Living Crisis topic, we analyse how all industries, from fashion to food and drink and retail, are embracing resilience and agility to reach consumers in new ways.

Strategic opportunity

Explore innovative payment options that offer flexibility without the risk of debt accumulation, such as instalment plans with transparent terms and lower interest rates

Stat: Employee engagement in the US hits lowest level in over a decade

Photography by Liza Summer

US – Employee engagement in the US has reached its lowest point in more than 10 years, according to findings by Gallup released in April 2024. The downward trend, which has continued since 2023, underlines significant challenges facing the workforce.

In the first quarter of 2024, engagement dropped to 30%, representing a decline of three percentage points from the previous year. In addition, the ratio of engaged to actively disengaged employees stands at its lowest since 2013.

Gallup’s data reveals a worrying disconnection between employees and their employers, with factors such as role clarity, organisational satisfaction and connection to company mission all declining. This trend is particularly pronounced among remote, hybrid and younger workers.

Despite these challenges, some organisations are defying the trend. Gallup’s research highlights how top-performing companies maintain high levels of engagement, with 70% of employees engaged, on average. These organisations prioritise strategic planning, clear expectations and robust support systems for their workforce, offering a blueprint for navigating the complexities of modern work culture.

For more insights on the workplace, head to our Work States Futures macrotrend report.