Can Experiences Help Save Ailing Retailers?
According to Fortune, spending on travel, recreation, and eating out has increased from 18 to 20.4% of total household consumption since 2000, and during the same period, spending on cars or household goods has declined. The items that they’re increasingly willing to pay for thus aren’t the kind that can come home in a shopping bag.
This is quickly transforming the landscape for retailers who are also squeezed by a shrinking slice of the pie due to e-commerce. What are brick-and-mortar retailers to do? How can they harness this shift to get consumers off the couch and back into stores where profit margins are higher?
The answer is actually a fairly simple one: they’re going to have to combine the two, items and experiences, and curate retail environments that are in and of themselves, an attraction.
Here are 5 lessons we can learn from retailers fighting this fight:
1. Experiences don’t have to be complicated to work
Chipotle is known for two things: being environmentally conscious and allowing consumers to customize their food at an attractive price point. According to AdAge, an experience like this is sufficient. Chipotle’s consumers appreciate its chain-style consistency enhanced by a touch of personalization—they know that they can always get “their” perfect meal experience, and they can watch it made. It’s fast food with a new-age spin.
2. Consumers want personalization and convenience
Macy’s is reimagining the retail experience in bite-sized experiments, such as with their pop-up beauty shop in New York City’s Herald Square, the Beauty Suite. This store breaks a lot of molds: it responds to consumer desires by organizing its makeup by category (rather than by brand) and only stocks those items that its employees feel strongly about. This allows them to provide a highly-personalized recommendation experience, the likes of which can’t happen online. Personalized approaches like these will lead to increased engagement, time in store, and ultimately, sales.
3. Consumers react best to relevance
People want to be understood, and there’s no more powerful way to achieve this than the sort of contextual serendipity that comes from location data and intelligence. Cookies, pixels, and online ads all have their limitations, but when a consumer visits a physical location, it reveals deep and concrete interests, and sometimes, even emotions. Oxfam, for example, partnered with GroundTruth to target holiday ads at consumers who were standing in locations where they were more likely to be cheerful and saw a 6.5% increase in total donations. Retailers with this sort of power outperform competitors in advertising because they convert interested or nearby consumers into foot traffic at a much higher rate.
4. Share-ability is key
Experiences are best shared and if yours aren’t designed for social media, you’re losing out on high volumes of free foot traffic. That’s why Sonic designed exclusive shakes for Coachella this past year that were meant to be shared via Instagram. It’s the same reason why Starbucks dreams up concoctions like it’s Unicorn Frappuccino and why restaurants across the country are being designed from the ground up with social media sharing in mind. If you create something that consumers can’t take to-go but which they constantly see online, you’ll keep them coming in person.
5. Consumers want a good cause
Today’s socially-conscious consumer wants to patronize brands that stand for the same thing that they do. “If your business doesn’t stand for a cause, consumers may turn to your competitors,” writes Kim T Gordon, owner of the National Marketing Federation, in Entrepreneur, adding that 87% of consumers are willing to switch on this basis. For many brands, that competitor is often an e-commerce one.
Brands like REI’s and Procter & Gamble are fighting back however with causes. In running campaigns like #OptOutside and #LikeAGirl respectively they’re doing more than just good: they’re providing a deep emotional experience of the sort that will keep consumers from settling for substitutes.
Today’s retail brands can still win the war for foot traffic by becoming curated retail experiences. By designing yours to be simple, personalized, relevant, shareable, and cause-based, you too can keep them coming for years to come.