Following up from my trends “insights” in March, I cannot help myself but add to my list of things that I think are coming down the pike. With disappointing sales in June, I am wondering what will the Fall 2012 season will bring us this year?
In my March blog on emerging retail trends, we discussed the New Kid, omnichannel, and mobile commerce. What happens when we put all of these elements together? Well, some fun new concepts that are beginning to take shape in the retail landscape.
- Price Transparency. As I discussed in my post on December sales, today’s consumers have a plethora of devices to shop product and pricing. One thing is very clear with this consumer, make your pricing super clear. The consumers of today already know the prices they are willing to pay for a product. And, oh, by the way, if they do not know the price, they will stand in your brick-n-mortar store, “Red Laser” the UPC, and find the lowest price for that product and where that lowest price product can be found. With that in mind, keep it simple and make your prices transparent. Finding the “best value” actually becomes a game for the consumer, a game they are demanding to win. The other caveat here is Omnichannel. Make sure you have consistent pricing across all channels. Customers are too smart and do not feel they should pay a different price based on geographic location, on-line, or brick-n-mortar. I know, it goes against our founding premise of supply and demand but multi-level pricing just will not sustain over time. The key is to understand the impact of your pricing strategy instead of continually looking back at your competitors for direction in pricing.
- Showrooming. Yes, this is a really fun trend for retailers (not really, it is quite a challenge and a headache). Customers shop the stores for products they like and even will try them on, touch and feel them. Then, coldly, they walk away buying nothing. Instead they will then turn to that arsenal of information they have at their finger tips to find out the best pricing for the fab product they found in the store. They buy it on-line and have it delivered to their door step (usually free of shipping charges, but that will be another blog). Retailers need to make sure they are being competitive in pricing and “transparent” (see the previous bullet) and/or offering unique products in the stores. I do think that once a retailer “proves” itself by being the best value (which is not the same as lowest price), a loyal customer will leave the showrooming to others.
- “Personalized Marketing.” Today’s customers want personalized marketing plans which are directed at them. They want “personal invitations” to save money or be included in a special promotion, with products that they are truly interested in buying at a value they feel is warranted. “I want the product I want, at the price I am willing to pay, with minimal effort on my part to secure the product (I actually want it delivered to me without any additional cost). And please only send me virtual catalogs of products that I want to buy geared to my individual tastes.” Today’s customer wants to feel “special,” and the retailers that can deliver this perception will win. Did I mention commercials on cable that are targeted to different audiences? This mean you and I can watch the same show but when the commercial break comes, I will see that fab shoe ad and you may see the cool Jeep ad…..hang on….it is coming!
- Retail Branding. The concept of brand loyalty is slipping. There of course are always the brands that have a sustainable competitive advantage and will continue to grow. However, I see today’s millennial customer trading in the brand for a comparable product with better value. The key here with the customer is “comparable.” They do not necessarily want a “cheap” version of a desired product but they want a product that can compete with the desired product at a better price. This is one the prevailing issues in the retail industry today and why the bill for the Innovative Design Protection and Piracy Prevention Act was developed. Fast Fashion is one of the contributing factors in this concept. However, they have been able to create a “retail branding” identification with the consumer that brings in the customer time and time again to see “whats new.” This is another reason why private label has become so important in today’s retail environment. Those that are able to gain the loyalty of the customer from a Omnichannel perspective will win (again, see my first point).
- Collaborative Consumption. For today’s millennial customer the need to share, barter, lend, trade, rent, and swap fits right into the need to save the world, recycle, be green, and leave this earth in better shape that what was handed to them. Successful companies such as Renththerunway, Beg, Borrow & Steal, Tie Society, and Zip Car have proven that this concept is officially on the radar. Instead of buying goods, products can be shared, which is more environmentally friendly. Consumers can rent a Chanel handbag for a fraction of the cost of owning one or a Zegna tie can be rented for a month then returned.
When you look at these trends, you see some commonality, which is an indicator of the current state of our macroeconomics. Combine them with our new millennial shopper and it is clear why Price Transparency, Showrooming, Personalized Marketing, Retail Branding, and Collaborative Consumption are key factors in today’s retail environment.
What does this mean for Fall and holiday 2012? Keep your product offerings simple, valued appropriately, directed to “each” customer, and relevant to the user. Today’s customer needs the “emotional” reason to buy. They have the money socked away, but you need to give them a reason to spend it. Create the must-have products.
Happy Pre Fall! Enjoy the Video on Trend 5.
A useful way to troubleshoot counting systems automatically and at scale is to track variance, or the difference between entrance and exit counts. If these are drastically different, then you know something must be wrong, since in reality the same number of people left the store as entered (unless somebody spent the night!).
Californians have been abuzz this spring over the planned openings of multiple Walmart Neighborhood Markets across the state. Unlike traditional Walmart Supercenters, Neighborhood Markets are intended to resemble local grocery stores in size and product offerings. They’re often situated in population-dense areas, but still maintain Walmart-low prices, which I imagine must give them quite an advantage in city centers.
siliconANGLE features RetailNext CEO Alexei Agratchev in its cloudANGLE section