Mixed experiences and mixed realities.
If there’s one way to succinctly sum up retail’s current state, that would be it. Lucie Greene, worldwide director of The Innovation Group at J. Walter Thompson, has been studying the consumer for some time and the shifts taking place in shoppers’ mind-sets leading the upsets now being seen at retail.
To know the future of retail, Greene pointed out, is to understand the changing dynamics, particularly as it relates to the Millennial and Gen Z cohorts.
As much of the industry has already chattered about, many Millennials are funneling their money toward food, travel, well-being, beauty and self-improvement. For the group of 12- to 19-year-olds in Generation Z, Greene said, there’s an even bigger change taking place where “They see themselves as the brand; you’re not the brand.”
“Experiences really are becoming the social currency and the key focus of what consumers are spending their money on,” Greene said, hammering home a point that’s become ubiquitous within retail in recent years.
What experiential actually means continues to evolve. Some good examples, Greene pointed to, include The Wellness Clinic at Harrods and Saks Fifth Avenue’s Wellery in New York which boasts a Breathe salt room, Skinney Medspa and activewear among other things related to personal health. Other retailers have designed their spaces with the camera in mind, creating Instagrammable backdrops for snap-happy shoppers.
While much of the talk around what to do to remain or regain relevance among consumers has focused on buttons and screens, Greene argued retail’s evolving “to something much more ambient and all around us” to the point where the actual meaning of what defines a store or even a product for that matter is shifting as the popularity of experiences continues to rise.
As a result, technologies such as augmented reality, sensors or connected devices that learn with the consumer are becoming increasingly important.
Greene called it the era of mixed reality.
With all roads of conversation tending to lead back to Amazon, Green pointed out 89 percent of Millennials consult with Amazon first for any product in any category.
“You have Amazon not only owning that shopping search space, but also setting the base rate expectation of commerce,” she said.
This reflects a shift from the past where the actions online were largely separate: Google was used for information and Amazon for shopping. That was a sentiment shared by Pinterest head of market development Vikram Bhaskaran later in the day when he said bricks-and-mortar has always been a place where discovery and actual purchasing occurred in the same place. That’s in contrast to online where companies have historically only been able to successfully offer one or the other. In other words, Instagram or Pinterest for inspiration and perhaps Amazon to shop. That doesn’t necessarily hold true any longer.
Greene also pointed to Amazon’s Echo as a game-changing device along with the broader verbal commerce movement as market watchers have moved from talking about connectivity with the Internet of Things to voice-activated everything.
It’s not the end of typing in a search, Greene said, but there’s certainly change afoot.