This upset has been felt industrywide — and while this evolved behavior has caused the constriction of physical footprints for many department stores, it’s paved the way for online-only retailers and niche brands. Colliers International’s latest report devised in collaboration with GlobalData, “Time for a Change: As Shopping Behaviors Evolve, the Retail Experience Must Follow,” provides a snapshot of the state of retail, and tactical steps to appeal to consumers’ ever-evolving priorities.
“Over the past 10 years, the way in which Americans have approached shopping has changed. Behaviors initially influenced by the economic downturn have now become established and have resulted in a more considered form of consumption. Arguably the ‘contemplative consumer’ is also more demanding,” the report said. “For example, 88 percent of U.S. consumers believe that it is unnecessary to spend a lot in order to have a good time. In addition, 70 percent say they are focusing on buying the right product rather than buying lots of products.”
Authors of the report suggested that the transition of shopping habits are a symptom of a larger update in values and beliefs. “The average American woman has 164 items of clothing in her closet, of which she doesn’t wear 41 pieces. Aggregated to a national level, this equates to 5.3 billion pieces of unworn clothing, valued at $219.8 billion,” the report said.
To motivate a purchase and survive this shift, the report suggested a heavy increase of experiences.
“For retailers, thinking beyond traditional retail practices to focus on offering true experiences can help strengthen customer traffic and other critical metrics,” the report said. “This could involve regularly changing assortments or offers, incorporating services like beauty treatments or spas and offering entertainment like fashion shows.”
To perhaps add insult to injury, today’s consumers tend to be more selective and patron a wider variety of retailers and brands. “This shift is driven by a desire to seek out the best value as well as unusual, interesting products and experiences. This shift is also a consequence of consumers being less loyal and more interested in convenience,” the report said. As technology continues to flatten the access to international retailers, the report said consumers have a larger range of products to consider and a larger range of types of retailers — both online and off-line — to visit.
In order to weather the unstable market, the report recommended that retailers take a scrutinizing look at their current offerings, their consumers, and their methodology of selling products. What’s more, it warned against casting too wide of a net to capture consumer interest. “Rather than attempting to be all things to all people, retailers must target discrete groups of consumers. But focusing on specific customers isn’t enough: To be successful, retailers must understand consumers’ needs and then deliver on them,” the report said.
To roll out the most on-target strategies, deploying platforms that collect and analyze data will serve as an integral tool, the report suggested. What’s more, applying said insights to personalized features and promotions will resonate with today’s fickle consumer.
The report said that in addition to leveraging insights, marketers need to ensure that each channel serve a specific purpose and supplement the others. “Retailers need to think about how consumers use different tools and channels and ensure that each is optimized to deliver. It is also critical to ensure that stores, the Internet and other channels work together in a cohesive manner,” the report said. The extra bonus? A larger range of consumer data to collect.
And while brands and retailers should segment shoppers for the highest gain, they should also do the same to the verticals and categories offered. The report said, “Retailers should target the segments of the shopper population that are more lucrative than others. The same applies to certain categories, like beauty, that are growing more rapidly.”
When in doubt, up experiences. “Retailers must provide shoppers with persuasive reasons to engage with their brands and visit physical stores. Part of the solution is giving consumers a truly immersive experience,” authors of the report said.
“Retailers must rethink how they engage shoppers with more interesting, compelling experiences that leverage the inherent benefits of physical stores over the virtual world of online shopping,” the report said. “It’s no longer a focus on sales per square foot but experience per square foot. The solutions will not be the same for all retailers. Shoppers are using multiple channels, so retailers need to adopt approaches that resonate with their target audiences across these different mediums.”
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