Engaging the new consumer
One of the truest sayings must be the famous adage ‘The only constant in life is change’. In the world of retail, this has never been as relevant as it is today.
If we just think of what life was like, say, 10 to 15 years ago, when we lived in a world without internet shopping and the likes of Amazon, Google, MySpace, iPods and PDAs. We now embrace recycling, organic food, electric cars, home delivery, cheap flights, farmers’ markets, spas and massages, art galleries and museums. From these examples we get a sense of how much and how quickly our social and commercial environments have changed. So how will brands and their retail environments change in the next 10-15 years?
To address this question we should first look at the lifestyle, habits and behaviour of our customers in the future and assess how this will influence their expectations from shopping. Currently, our customers can access thousands of songs, video clips and photos in any order, instantly whilst on the move. We casually use the internet to learn, speak to friends, form new social groups and create our own media content. ‘Kryder’s Law’ states that in 12 years the mobile devices we carry will have the capacity to store all commercial video and music ever created. These devices will be the ‘remote controls of life’. As well as computers, phones, video recorders and navigation aids, they will be our keys and wallets. They will have the capacity to video a user’s entire life and access vast amounts of online content. This will give customers of the future the power to choose like never before.
While shopping, customers will be able to try, view comparative products and read reviews online, share opinions with their friends, get comparative prices and buy the product online while in the store.
In this new paradigm, stores will have to re-think their roles. Shopping will no longer be about stores – it will be about stories, and customers will turn their attention to those brands with a story. They will have to offer a compelling narrative and raison d’être whether that is about provenance, processes or care for the environment.
Added to this, consumers have an ever-increasing thirst for learning. They want to improve
themselves and be more interesting. According to the National Center for Educational Statistics, in the US 50% of 35-54 year olds take personal enrichment courses aside from work-related training. 32% of Christmas presents bought in the UK last year were for ‘doing things’ as opposed to receiving things. Visits to the Tate Modern gallery in London rose by 45% between 2004-2005 according to Pompei AD LLC. These are some examples that suggest that people will no long just want things – rather, they seek meanings.
There is a developing shift from people seeking status from ‘status symbols’ to ‘status skills’. Consumers will want to master the skills to make the most of what they buy and be able to tell the story that comes with it. Shopping will no longer just be about buying a brand but more about buying into a brand.
Consumers will no longer be content with being passive buyers, they will want to learn, partake and influence. I have spoken at length about the ‘experience economy’ – we are now entering the ‘being economy’ where consumers will desire places ‘to be’. On threadless.com, customers submit their own t-shirt designs, the online community votes for its favourite and the winning design gets produced and sold on the site, with the winner being paid for the design.
Our new customers are the ‘C’ Generation; they want to ‘create’, ‘contribute’, ‘connect’ with like-minded people and expect things to be ‘custom-made’. They also have a ‘conscience’; they will be riddled with fear and guilt. They care about the environment, health, human rights and their local communities, and will turn to those brands and retailers that can prove their CRS credentials.
What has happened in the online retail world will filter down to the physical retail environment. This trend towards ‘social shopping’ already happens online and has moved offline (in-store); it is a growing phenomenon that will turn the retailer-customer relationship on its head.
Today, there is an increasing number of consumer groups and communities, which take advantage of their buying power to negotiate group discounts. For example, Dutch United Consumers negotiates mass discounts on insurance, petrol and electricity on behalf of its 250,000 members. In China, the tuangou (‘team purchase’) phenomenon involves strangers organising themselves around a specific product or service. They then meet up in real-world shops on a specific date and time, and negotiate a group discount on the spot.
Stores have started to harness some of the techniques that e-retailers use. Location-based SMS marketing will become an important weapon in every retailer’s armoury where they communicate on a one-to-one basis with a potential customer and create instant, bespoke offers for them on the spot.
‘Pop up’ stores or guerrilla stores are not new but have moved into the realm of mainstream, global brands. Here retail brands take up temporary space where they sell products along with putting on performances to create a theatrical experience where spectacle comes first. The whole concept of pop-up stores gives consumers something that is limited, exclusive, discovery-driven and ‘of the moment’. Retailers following this trend range from American Apparel and Target to high-end fashion brand Comme des Garcons.
As well as developing cleverer ways to market to potential customers, stores need to offer more
compelling reasons to visit and linger as the internet will be where we ‘buy stuff’ and stores will be where we ‘do things’. So, how can we expect to see stores responding to this challenge?
London’s Selfridges has been a pioneer of retail theatrics with its seasonal campaigns of Tokyo Life, Brazil and Las Vegas. As well as having the odd wedding ceremony in-store, more recently it has unveiled a sound and vision installation in its Ultralounge, designed by Brian Eno. Maybe this is because Selfridges knows that the Olafur Eliasson’s Weather project, which was exhibited at the Tate Modern in London, attracted more visitors a day than the store did.
Brands will also need to embrace a tangible commitment to ethical and green retailing. Timberland now has ‘nutrition labels’ on its shoeboxes. These give information on environmental impact and the number of hours and holidays taken by its workers. American Apparel’s marketing proposition is that it does not use sweatshops and provides a very progressive employment policy that is not typical in its industry. So authenticity, provenance, transparency and ethics are now expected and no longer aspirations; these are important components of the ‘brand story’ and customers will need reassurance.
All this points to a world where customers will abandon ubiquity and seek bespoke, personalised
experiences. In this new world the idea that we are time-poor is a lie; we are willing to wait for those things we deem worthwhile, be it a freshly squeezed juice or an explanation of a new gadget we want to buy.
Brands will no longer control their message. Customers will turn away from mass media to personal media where peer to peer communications will be more trusted than brand communication. Brands and stores will become evermore specialised following Chris Anderson’s ‘Longtail’ theory, creating a world of ‘Massclusivity’.
Added to this, stores will become social networking environments where customers will record and share experiences with like-minded people. They will become brand communities built on strong relationships between customers whilst merging the on-line and off-line.
As conventional stores lose their appeal, customers will turn their attention to those stores that demonstrate social responsibility and offer the magic of immersive, tailor-made experiences, encouraging participation, social networking, sharing, exploration and indulgence, and allowing customers to feel good about the store and themselves.
In the TR environment – where people are ‘captive’ for a fixed amount of time and usually bored, restless or stressed – relevant, bespoke retail offers and services can help to alleviate this problem and make people’s dwell time enjoyable and productive rather than be seen as ‘dead time’.
In the new retailing landscape the old success criteria of price, variety and convenience will be replaced by customisation, learning, authenticity, storytelling and sharing, where the winners will be those that are responsive to the new consumer. As Charles Darwin famously wrote: “It’s not the strongest of the species that survive, nor the most intelligent, but the one that is most adaptable to change.”
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