Jon Weber


As technology continues to transform consumer behavior, fashion apparel retailers and brands are struggling to engage shoppers — and get them to spend as well.

It’s a difficult task. And one of the biggest distractions keeping shoppers from buying apparel and perusing the aisles of a department store are mobile devices and social media — the very technology that retailers need to embrace to better engage consumers.

And as the recent Pokémon Go phenomenon shows, consumers are easily engaged. But it has to be the right type of engagement. Here, Jon Weber, managing director and partner in L.E.K.’s Boston office where he heads the firm’s retail and consumer products practices, discusses consumer behavior as well as how the retail market has changed in recent years.

WWD: From your perspective, what are some of the challenges and opportunities facing retailers today? And in particular for fashion apparel, luxury and accessory brands?

Jon Weber: There is a tremendous amount of change happening almost everywhere you look. Whether this translates into an immediate opportunity or challenge really depends on who you are.

Let’s start by looking at the consumer. Their shopping behavior is dramatically different today than even a couple years ago. It doesn’t just start and end in the store or simply involve one channel, for that matter. Consumers are constantly engaged — whether they’re interacting on social media platforms, assimilating content on blogs or other media outlets, browsing web sites or simply texting.

The source of influence on consumers’ needs and wants, brand and product preferences, and place of purchase, can come from anywhere. Therefore, brands and retailers need to find the right ways to be active participants in this new environment so they can continue to be relevant. But cutting through all the noise fighting for consumers’ mindshare is not easy.

WWD: What is informing the actual purchasing decision?

J.W.: Consumers’ expectations have changed, and they’re demanding even more from the brands and retailers they consider. Product quality, performance and price attributes remain critical, but there’s a long tail of other things that also matter and are shaping purchase decisions. For example, our research shows that consumers increasingly value attributes like authenticity, social responsibility and community.

They also consider transaction “norms” to now include free shipping and returns, and two-day shipping. Conversely, we’ve also seen some areas that matter less today than before. For example, younger consumers place great value on time and experiences versus ownership of “things,” and you see this happening in apparel where more consumers are shunning the brand badge. They can dress to a “look” without touting marquee logos head-to-toe, and you’ve clearly seen evidence of this in the winners and losers in the marketplace.

Another broad theme we’ve seen across many product categories is consumers’ desire for specialty brands — they’re looking for brands that excel at delivering on a clear value proposition and are wary of those seeking to do too many things where they don’t have permission to play. For many consumers, “smaller is better.” So while the brand is far from dead, the role and importance of brands have certainly changed for many consumers.

WWD: What’s your take on the current landscape from a channel point of view?

J.W.: From a channel perspective, there have been major shifts in the winners and losers. Online sales continue to take material chunks out of brick-and-mortar, and you see large disparities in comp-sales trends across channel segments over the last several years — just look at department stores, big-box and mall-specialty versus off-price and dollar stores. So there’s a lot of focus right now on repositioning to win in this environment.

What’s more, with the general downward pressure on store traffic that retailers face, it’s an understatement to say that they are confronting major challenges in their store strategies. And so too are the brands who rely on retailers to sell their products.

We will continue to see a spate of store closures, remodels and formatting, and brands taking on more direct distribution to try to combat these issues. I think more players will try to use the store in different ways to engage with consumers, create excitement and ultimately inspire new reasons to come to the store and buy — things like in-store product education and demonstrations, trunk shows and other events. I also think retailers need to get back to some key basics, like providing great service and delivering a compelling experience, which in a gross generalization has not been a strong suit among retailers for years.

Also on the channel side, today’s consumer has an endless array of choices readily available to them; and there’s little friction exploring different brands and retailers and switching between them. Major online retailers like Amazon and Zappos, as well as the web sites of large brick-and-mortar players, present large assortments and drive substantial traffic.

These characteristics create a world where emerging brands can get themselves in front of consumers and gain share, and the attributes that made incumbent brands and retailers successful in the physical world don’t always translate to the digital. Furthermore, with everyone online today, it’s important for brands and retailers to have clarity on the roles and rules they adhere to in their channel strategies. It’s easy for conflicts to arise when you’re participating in different channels, yet important to have strong reach if you want to be where your customers are.

WWD: You previously noted that there are too many choices in the market for consumers. What are the implications of that from a consumer spending perspective?

J.W.: Today’s empowered consumers are more resourceful than ever — they’ll spend a lot of time learning/comparison shopping, browsing, etc. before making a purchase. We’re seeing this translate to a high degree of fragmentation of spending across brands, as they discover new brands or can more easily access different brands for specific needs. Furthermore, for products available across multiple distribution channels, consumers can easily find the best price and shipping terms. Once they know what they want, they won’t let retailer loyalty get in the way of a better deal. Therefore, you need to deliver what consumers want, at a fair value.

There are also real challenges for brands as shopping continues to migrate online — a big one is merchandising in a digital environment. In a physical store, a consumer has a reasonable chance of seeing your product on the shelf, which prompts a purchase consideration. But if your product isn’t visible within a few page clicks during an online visit, brands and new products may never be seen. It is even worse for products that rely on impulse buying.

Nevertheless, all brands face potential “leakage” in consideration as consumers move from physical to digital purchasing. Finally, it’s hard not to mention Amazon here. Amid all the choices from a brand and retailer perspective, its power as a retailer of choice is clear and vast; and with the continued enhancements to Amazon Prime, among other things, this doesn’t appear likely to change anytime soon.

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