Are Shifting Consumer Values Changing Retail?

Is it merely the weak economy that is changing consumer buying behavior, or is the shift due to something more fundamental to our values?

Recent retailing research is indicating that we are moving from “conspicuous consumption” to “calculated consumption”. The trend is that people are saving more and spending less; buying more with cash and less with credit. Smaller homes are gaining in popularity over “McMansions”. Conspicuous consumption is becoming passé, causing some high end shoppers to request unmarked brown bags for their merchandise instead of incurring the guilt of strolling down the avenue carrying Gucci and Armani-emblazoned bags. (It’s tough to enjoy being well-to-do when unemployment is high and people are being evicted from their foreclosed homes.)

People are clearly seeking more value and long-term satisfaction from their carefully-considered purchases. It’s more satisfying to have the experience of a cruise vacation than to cuddle up with a new fall wardrobe that will be out of fashion next season. Cooking lessons that enhance at-home dining have long-term payback. Seeing Paul McCartney in concert creates a memory that lasts a lifetime. “Staycations” can be very thrifty, and also conducive to family bonding. Activities that build relationships and cherished remembrances deliver more happiness than material possessions.

Assuming that consumers continue with this modified behavior, the challenge is on the table for retailers to create binding loyalty through experiential retailing and customer service. If people find out that they are happier spending this way, this shift may be permanent.

There’s an exciting opportunity for retailers to act on this trend and break away from the pack in terms of sales, loyalty, and profitability. Retailers that really know their customers and engage them in buying experiences that break the old-fashioned mold will be the big winners. When was the last time you saw an Apple store that wasn’t mobbed? Why does Sephora have department store cosmetic counters frantically re-tooling? Why do we shop at Whole Foods even though it’s more expensive?

Critical components of success in this new world:
• A brand identity that stirs the emotions of customers
• Unique offerings aimed with laser-like precision at target consumers
• Sophisticated integration between web sites and brick and mortar stores
• Strategic partnerships that deliver special experiences and exclusive products
• Responsive and interactive application of business intelligence
• Personalized customer service that binds us to brands and products

Acknowledgements: Thanks to Mary Gendron for posting the New York Times article that inspired this blog: http://www.nytimes.com/2010/08/08/business/08consume.html?_r=1

Customer Service at Retail Stores-Dying or Already Dead?

I am an enthusiastic shopper, and find browsing stores to be a form of relaxation. Besides, it helps me stay knowledgeable about current styles and trends. (I have a fear of slowly sliding into a decidedly middle-aged look.) So why do stores seem so intent on driving me away to shop on the Internet? Customer service issues are at the heart of the issue. That trickles down from the capabilities of the management team, how they hire, and how they communicate priorities. Retail is in crisis, folks! Don’t you think that requires you to think differently? Most of my corporate career was spent in service-related roles. The pursuit of great customer service is a passion of mine, and you will often find me on a soapbox on this subject. The crime of it is that the techniques involved in delivering really good customer service are simple, even FUN, and yet few retailers have found the secret to motivating consistently positive behavior from their associates. Recently, while shopping at The Sports Authority for a specific item I was told, “We don’t carry that in the store, but you might try the Internet.” Yes, I might. But why couldn’t the store offer to obtain the item for me and either hold it for pick-up or send it to me? At Macy’s, I had to return a pair of shoes because the clerk had mistakenly put the wrong shoes in my bag at the checkout counter. When I came back to the store and explained the problem, I wanted to buy two pair of shoes to replace the one pair I was returning. Gosh, I was treated like that was an unsolvable problem! Return one pair, buy two. That’s good for the store – right? When the dust settled, I had a refund for the original purchase, no new shoes, and no apology. I called the General Manager the next day to explain how her associates don’t seem to want to actually make sales. Have you noticed how you often can’t find an item in the size or color you want in the brick and mortar stores? But go home and search the Internet, and you find what you want right away. Why wouldn’t I stop trolling the stores for hours, going home empty-handed, when I can shop online and have my purchase sent to my home? Then when the package is delivered, it’s almost like getting a gift in the mail! You often have to pay shipping fees, but you didn’t drive your car or take public transportation to get to the store – so it’s almost a wash. My call to action for retailers is this: Stop thinking like it’s still 1980! Put yourself in the customer’s shoes and deliver a shopping experience that they can’t get online – in a good way. Clueless, inattentive, lazy, gum-popping drones as sales associates are driving us away forever. Establish a well-communicated service philosophy, make sure management ingrains it into the culture, hire people who will respond to coaching, and deliver real service to your customers. Otherwise, kiss your stores goodbye one-by-one.