How Retailers Can Meet the Demands of the ‘New’ Shopper
As retailers gather in New York City for the National Retail Federation’s Annual Convention and EXPO The new, post-recession American shopper is high maintenance, promiscuous and demands an innovative and engaging experience in-store and online. That’s the takeaway from a study released by Leo Burnett’s marketing services arm, Arc Worldwide .
“The recession has forever changed people’s mindset about shopping,” said Alan Treadgold, head of retail strategy at Leo Burnett Worldwide. “People have developed new rules for retailers. As a result, retailers must understand the changed role they play in people’s lives and meet their expectations to maintain customer loyalty.”
The study, “Re-Imagining The Retail Store,” identified five key considerations retailers should keep in mind when implementing new strategies:
DON’T LET TECHNOLOGY UNDERMINE THE SHOPPING EXPERIENCE. Retailers tend to view in-store technologies as a better way to connect with their customers, but customers don’t agree. Yes, people want to experience a seamless transition between the physical and virtual store by using technology, but they also want educated and friendly service when visiting the physical store. Technology is not a suitable substitute and this practice can damage an already fragile relationship.
SHOPPERS ARE PROMISCUOUS. They shop around and their loyalty is hard earned. The recession has taken a toll on consumer confidence and people’s perceptions of retail business. Customer loyalty has to be earned by understanding in detail the expectations of the shopper and delivering every time.
PRICE GETS YOU AN INVITE TO THE PARTY, BUT NOT A VIP PASS. Consumers will not accept a trade-off — low price versus quality experience and merchandise. Today, people are more than happy not to spend if they feel that retailers do not give them a sufficient reason to purchase.
BREAK THE RULES. If you’re not winning by following the rules, break them. There are two clear ways to win in store-based retailing — excel within your store archetype or take a radical path to greatness and create a new store format that breaks out of category conventions and delivers a unique experience.
THE BASICS ARE STILL SEXY. It may not be exciting, but there is work to do and profit to be made from making the basics better. Retailers are struggling to get the basics right and people are visibly frustrated. Taking a page from “Retail 101” will help to improve customer appeal, retention and ultimately, profitability.
“The retail landscape continues to evolve and move further away from being just a place to purchase a product,” Treadgold said. “It’s an experience. As retailers listen to their customers and understand their behaviors, they can create an experience that people come back to time and time again.”
Online Holiday Recap
U.S. consumers spent an estimated $36.4 billion in online purchases during the period Oct. 31 to Dec. 24, according to MasterCard Advisors’ SpendingPulse, registering a 15.4% year-over-year increase over the 2009 holiday season.
SpendingPulse reports on national retail and services sales and is based on aggregate sales activity in the MasterCard payments network, coupled with survey-based estimates for all other payment forms, including cash and check.
Online sales registered double-digit growth for six out of seven weeks, and the apparel category led the growth, according to Michael McNamara, VP, MasterCard Advisors SpendingPulse.
"In terms of sub-categories, apparel was the clear leader, helping increase the channel’s overall lift,” he said. “In terms of share, online apparel sales during the holiday season accounted for 18.8% of total sales in that category, compared with 16.9% in 2009.”
As for some of the other sub-sectors, online electronics also recorded significant gains, while jewelry, although still in positive territory, lagged behind, McNamara noted
There were six days in the 2010 season that surpassed $1 billion in sales compared with three days in 2009. Top days included Tuesday, Nov. 30, which registered $1.16 billion in sales, and Wednesday, Dec. 1, registering $1.13 billion. The Monday after Thanksgiving generated $999.3 million in sales, a 25.3% increase compared with the Monday after Thanksgiving in 2009.
CNBC offers its take on Target
This should be interesting. “Target: Inside the Bullseye” is scheduled to air on CNBC Thursday, Jan. 13 at 9 p.m. EST. The documentary will repeat that evening at 10 p.m., 12 a.m. and 1 a.m. and will also re-air again on Jan. 15 at 8 p.m. and 11 p.m.
Hard to know exactly what to expect, but a brief description on the CNBC website suggests the show won’t exactly break new ground. For example, Target is described as “a $65 billion-dollar discount icon that changed the face of shopping. From humble beginnings as a family-owned Minneapolis department store to retail giant Target — or Tar-zhay. It’s goal: make cheap, chic.”