NEW YORK — At last month’s National Retail Federation Big Show, Westfield’s co-chief executive director Steven Lowy implored retailers to share their consumer data with the shopping center developer so that it could improve customers’ experiences.
Now Westfield is sharing some data of its own with retailers.
“Westfield: How We Shop Now, What’s Next?” surveyed 12,000 consumers in the U.S. and U.K., and leveraged the knowledge of Westfield Labs, the firm’s technology arm, as well as experts in retail analytics, industry strategy and insight, trend spotters and architects.
“How We Shop” identifies five trends that collectively Westfield believes could signal a new era for retail. The trends include a new pay-as-you-go retail model, stores as classrooms, a lifestyle approach to loyalty rewards, assisted reality and “supra-sensory” experiences.
Pay-as-you-go retail is seen as emerging and is based on renting rather than owning the key pieces women want. According to the report, a drawback of online and digital retailers such as Rent the Runway, Girl Meets Dress and Vinted is that they focus largely on special occasions and don’t provide the immediate gratification shoppers seek.
Pimkie’s Mini Fashion Bar in a hotel in Antwerp was cited for the ease of its transactions. Customers can rent clothing and accessories for their trip and pay for them when they’re returned at checkout. At the Westin and Fairmont hotel chains, guests can rent workout apparel and footwear from national brands for a nominal charge, along with an MP3 player and yoga mat.
There’s a strong appetite for rental models. About one-fifth of British and American shoppers said they’re interested in renting from their favorite stores. Pay-as-you-go’s appeal was higher in cities, with nearly a third of Londoners and a quarter of New Yorkers and Angelinos expressing interest. Most enthusiastic were Millennials. Nearly half of those in the 25- to- 34-year-old age group in the U.K. and more than one-third of the consort in the U.S. liked the idea. City-dwelling Millennials expressed even higher interest, with 58 percent of Londoners, 45 percent of New Yorkers and 43 percent of Angelinos reporting as such.
One-fifth of U.S. and U.K. shoppers are willing to spend $200 or more a month on unlimited clothing rental subscriptions.
Westfield wants retailers to take advantage of the actionable ideas in the study. Retailers should “cast the classic rule books aside and rethink everything from pricing models and store design to the retail experience and the relationships forged with shoppers,” the report said. “Only then can you gain a competitive advantage, not just versus other physical retailers, but also against the growing army of online retailers.”
“Could we get to the point where big-name retailers have [rent] or buy sections in stores? We think so,” said Myf Ryan, Westfield’s marketing director. “We believe pay-as-you-go retail is coming to a mall, office and train station near you.”
Retail loyalty programs are due for an overhaul, according to the report, which found “a real consumer desire for lifestyle loyalty programs that reward based on criteria other than the transactional relationship with the retailer.”
Ryan said lifestyle loyalty programs can be more closely aligned to what a brand stands for and why it exists, rather than just what it sells.
While 52 percent of shoppers in both the U.S. and U.K. still want rewards for spending with the brand, nearly one-quarter of consumers in both countries would like credit for making good lifestyle choices. About 13 percent in both countries want volunteer work or charitable donations to be rewarded. Sharing branded content on social media appealed to 16 percent and 14 percent in the U.K. and U.S., respectively, and cocreating new products for the brand, 15 percent in the U.K. and 14 percent in U.S.
Gen Z and Millennials were most interested in getting rewards for non-transactional behaviors.
When presented with 12 lifestyle loyalty options, recycling scored highest in London, New York, San Francisco and Los Angeles. About one-fifth of shoppers chose regular exercise; one-fifth spending time with family and loved ones, and one-sixth said making good financial decisions. Those were followed by eating a balanced diet and getting enough sleep. Getting off-line, as in shutting off your phone, and cutting down on alcohol intake were low on the list.
Shoppers have an appetite for learning that’s not being satisfied and retailers have an opening to jump in. The Westfield study said helping consumers develop skills around their passions could bring retailers outsize returns.
At Westfield London, Nespresso offers coffee connoisseur classes and De Beers gives gemological and gemology courses.
“Retail outlets could become the new creative playgrounds and upskilling classrooms,” Ryan said. “The physical retail environment lends itself to this kind of experiential immersion.”
The survey found that 35 percent of U.K. shoppers and 32 percent of U.S. consumers want to learn new skills at their favorite stores. Classes about health and well-being were of interest to 34 percent, and creative inspiration, 34 percent. Digital upskilling appealed to 29 percent of Londoners, 27 percent of shoppers liked makeup masterclasses and 21 percent were interested in book clubs.
Westfield envisions virtual reality and assisted reality becoming enhanced assistance and used to help explain how things work, show how products will look inside a home and provide assistance in dressing rooms. Thomas Cook has used the technology to give consumers a taste of the holiday they might buy and Tommy Hilfiger used virtual reality in his store to bring his spring 2015 runway show to life.
About 41 percent of shoppers said the best use of VR would be showing how products will look in the home, followed by seeing virtual demonstrations, 39 percent; trying on clothes, 33 percent, and seeing how products are made, 22 percent.
Multisensory is the name of the game and inside-out retail is the name Westfield’s given it. The idea is based on the notion that in this screen-dominated age, consumers are looking for artificial sensory stimuli to supplement that lost feeling. “We want to overload our senses with ‘supra-sensory’ experiences,” Ryan said.
While Hollister’s dark, fragrant and loud stores were cited as an example, Ryan said, “a sensory experience doesn’t need to mean perfume and loud music. Consumers are simply expecting more, and the research suggests that the successful retail formats of tomorrow will be shaped by scientists, architects and designers working together to delight shoppers’ all five senses across the board.”
When asked which senses most enhanced the shopping experience, shoppers put vision at the top, with 83 percent and 81 percent in the U.K. and U.S., respectively. Touch was important to 77 percent in the U.K. and 76 percent in the U.S., followed by smell, hearing and taste.