Earlier this week, I attended the third installment of Adweek and Bloomberg Media’s ongoing Breakfast Series, Marketing in an Interruptive World. The event featured insights on the retail industry from Bloomberg’s Intelligence sector as well as a panel of brand & marketing experts tackling the art of creating human connections. It was a very enlightening breakfast with some amazing intel on the consumer journey which led me to believe that the retail apocalypse we’ve all been hearing about…might not be so apocalyptic.
Not all in the retail industry are hurting according to Poonam Goyal, a Consumer Retail Analyst from Bloomberg Intelligence. While apparel & department stores have seen a sharp decline in recent years, there is hope on the horizon as consumer confidence remains high. As Goyal puts it, “consumers are still spending; what’s different is how people seek out value – and how much they value experiences over things.” Technology, automation and personalization are shaping the future of retail by adapting to new consumer behaviors – the old brick and mortar business model is now a thing of the past. As we look to the future, we can already see brands and retailers leveraging new technologies and experiences to attract customers.
This week it was announced that Lord and Taylor agreed to start selling merchandise on Walmart.com – setting up what they call a premium fashion destination. While this move may seem odd to some, the paring of these brands makes sense in today’s economy. Consumers are looking for new experiences and now Walmart customers can purchase high-end premium fashion alongside their groceries and home needs.
Retailers are also experimenting with new store concepts to boost foot traffic by offering new in-store experiences. Nordstrom Local has unveiled their new concept store which is merchandise free and focused on consumer services like alterations, tailoring, beauty and style consulting. The idea is to create a high value and unforgettable customer experience. Customers at Nordstrom Local can seamlessly order merchandise in-store that is delivered the same day while they are enjoying a salad or getting their nails done. American Eagle is another great example of store innovation – recently they opted to put laundry machines into some of their stores to attract Millenial consumers. So as their customers shop for a new pair of jeans, they can now do their laundry. This new concept ties back to what what matters most in today’s economy and that is the experience.
Not only are brands changing their store concepts but they are leveraging new technology to get product into stores faster. Instead of waiting the normal 4-6 months for new products, brands like Zara make it a priority to get new product every 2 weeks! As Goyal puts it, “that’s the future of retail – the consumer is changing, and you have to change with them, it’s about being able to move as fast as customers do.” Brands like Zara do this by investing in new technology and automation allowing them to keep up with consumer’s changing behaviors.
The old business model employed by brick and mortar brands must be forgotten. Consumer habits and behaviors are changing at a very fast pace due to new technology and the availability of goods. It’s up to brands to make that change and deliver new experiences to their customers. Through technology, automation and personalization – retailers now have the ability to take huge leaps that were never before possible. I’ve heard that we’ve have moved from a industrial economy to a connection economy where the new currency is attention. According to Goyal, “competing today is about connecting with the customer,” she said. “Emotionally, through your marketing, and through product.” That sounds about right to me…
For a full recap on the insights from Marketing in an Interruptive World – please click here.