Have you ever noticed, when you say you work in Retail, no one asks you to explain what that means.
Maybe that’s because as Kip Tindell noted in this morning’s Keynote session, 42 million Americans work in retail, about 13% of the population (as of 2014).Or maybe because every citizen and tourist; every child and adult are also consumers. But no matter the reason, it’s amazing how people respond when you say you work in Retail. Most recite a list of their favorite brands, or mention their first job was in Retail.
With that kind of legacy, I was curious to see what the National Retail Federation’s Big Show is like. I’m here to see if my impressions of some of the major themes, trends, and lessons learned are also yours, because I’m new to the show and to the industry – and if you’re reading this, I’m betting you’re not!
Consumer spending shifting to Hospitality and “Experiences”
From the New York Times to Ad Age, the message is clear – people are shifting their perception of value from things to experiences. In particular, that means spending on dining and vacations (“hospitality”) is skyrocketing compared to the overall retail market. Traditional consumer products and retail companies are working on ways to create communities via mini-experiences in-store and virtually, such as Hershey’s “smile for a Kiss” displays that dispense chocolates for free, to Dia & Co.’s stylist-picked clothing selection shipped right to the door, or Outdoor Voices’ Instagram account for #doingthings. But it’s a myth that it’s just “a millennial thing”, according to multiple sources – this trend is pan-demographic.
Millennial consumers are driving change in engagement models
What IS a millennial thing is the expectation that retailers will engage them in a personal way, and a continual way, combined – seemingly contradictory – with a desire to simultaneously have a self-service engagement model that requires less contact with retail employees. Millennials don’t want to wait a year, or 10 visits, to get ‘status’ with a brand (as Stephen Joyce says Choice Hotels has realized); and they don’t want the brand to sell them a product – they want to choose brands that match, enhance, or fulfill their ideal lifestyle vision; brands that fit the ‘curated’ version of their lives they’re able to craft through social media. All of these aspects drive retailers to think differently about ways to engage the “Born Digital” generations. Virtual Reality, social engagement, and 1:1 marketing are driving retailers to be more creative than ever, and more technology- and data-driven than ever.“Precision data” was a word that came up multiple times – and while it’s not specific to millennial marketing, it certainly is a logical path to better meet their expectations.
Partnerships between Retailers and their manufacturers is unlocking innovation
Hershey manufactures confections, but also runs a theme park (and an amazing spa, for what it’s worth). Electronics manufacturers have forged ever-deeper personal relationships and brand loyalties with their consumers, and opening retail storefronts to reinforce their brand and create a community of interest with their customers.
As changes in consumer behavior drive changes in the Retail and Consumer Product industries, we see – and at NRF hear about – the increasing importance of forging a new definition of “E2E” processes and commerce, where Retailers and Consumer Products companies partner to build a seamless experience for the consumer, and share data, products, and delivery to boost revenue and increase their market impact.
To sum it all up, Retail seems to be on the cusp of a sea change in customer engagement. Omni-channel and digital strategies seem to have nearly hit a tipping point where people agree they are not special strategies to be called out, but rather ‘business as usual’ – the new normal. And it’s being driven by access to immense volumes of data; sophisticated, heterogeneous data aggregation and analytics tools to extract meaning from it; changing expectations across all age groups and demographics for what a retail experience feels like; and the recognition that partnerships enable more and bigger innovations, higher consumer satisfaction, and increased revenue for all partners involved. Phew!
In the words of the immortal Monty Python, “My brain hurts!”
But I mean that in the best way possible 🙂