Consumers are steering this industry via preferences that include channel-less shopping, a higher-degree of personalization (and customization), buying online and picking up in-store and shifting their spending toward experiences over the purchasing of things. Shoppers are also not paying full price. For anything. And this has led to the expansion of off-price retailers such as TJX Cos. and Ross Stores as well as bargain chains such as Dollar General, which is opening 1,000 stores this year alone.
Coupled with an overstored environment, and the explosive growth of Amazon, traditional retailers are being forced to close stores and step-up investments in e-commerce technology — or simply go bankrupt.
And while thought leaders and pundits point to consumers themselves and Amazon’s Jeff Bezos as the “disruptors” of the current state of the retail industry, one has to look back over time to see that personalization and being a frugal shopper is nothing new. And with the upward trajectory of online shopping, there were pioneers aside from Amazon that helped propel e-commerce.
Regarding “smart shopping” and personalization, the early Seventies were a seminal time as the “Me Generation” (now known as Baby Boomers) came of age. Although met with distaste from the likes of Tom Wolfe and Christopher Lasch, who criticized this cohort as being anchored in a culture of narcissism, the Me Generation was keenly marketed to by Madison Avenue.
In 1974, for example, Burger King launched a series of TV commercials touting its “Have It Your Way” slogan. In the spot, a family orders Whoppers and Whopper Juniors, and ask if some of the condiments can be left out. That’s when the cashier sings into the order microphone: “Hold the pickles, hold the lettuce. Special orders don’t upset us. All we ask is that you let us serve it your way!” It was an instant hit.
The campaign, created by BBDO (Batten, Barton, Durstine & Osborn), resonated with consumers — especially the Me Generation. From there, the locus of consumer decision-making began to change. In fashion apparel, 1974 also marked the launch of Sy Syms’ TV commercial, which told viewers that “an educated consumer is our best customer.” In the ads, the founder and namesake of the off-price chain, Sy Syms, personally delivered the message and explained that garments would be progressively marked down over time. He encouraged shoppers to come back and peruse his aisles and racks, and see prices slashed.
The strategy worked as it created excitement with consumers who would grab apparel before it was marked down too steeply and purchased by someone else. It played out like a game with shoppers returning to the store to see how low already reduced items would go. There were tales of shoppers hiding products and switching them on the racks to keep it from others. The chain had about 50 stores at its peak, and later acquired Filene’s Basement in 2009. But it would go bankrupt in 2011. Syms passed away in 2009.
Analysts often cite Syms as one of the founding fathers of the off-price sector. And the business model was deployed elsewhere. But in essence, the approach was training consumers not to buy at full-price. Today, frugal and smart shopping is the default behavior, and is an especially keen attribute of Millennials — who have also been called the “Me Me Me Generation” by Time magazine in 2014.
Being a “smart shopper” has also been catalyzed by the Internet, which empowers shoppers to research products and find the best price available. And this is where Amazon has ruled supreme. The company, founded in 1994 by Jeff Bezos, has transformed the shopping experience, experts have said. But there were other pioneers as well, notably Stephan Schambach, who, in 1995 invented the first standard software for online shopping.
Schambach’s company, Intershop Communications, later went public. He then went on to found Demandware, which was acquired by Salesforce and is now known as Salesforce Commerce Cloud. In 2015, Schambach founded NewStore Inc. where the focus is on mobile commerce. He is also a regular contributor to WWD’s Think Tank feature. Schambach’s latest column can be read here.
Inside the cover jacket of his latest book, “Make Over: How Mobile Flipped the Shopping Cart,” Schambach wrote that “retail is in the midst of a head-to-toe makeover. The customer has already evolved — she has left the world of channels and platforms and now seeks to engage with her preferred brands on the go through a device in the palm of her hand.”
The evolution of retailing and consumer behavior apparently continues.
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