Many of the brands millennials and Gen Z shoppers are turning to today have done a better job of creating immersive, in-store experiencesthat offer some appeal beyond the products sold there. --Amelia Lucas and Lauren Thompson for CNBC
What's up with brick-and-mortar retail? Is it tanking? Is it flourishing?
Retail has always been cyclical. We can count on a single hand retailers that have been around for more than a century. Almost all the giants of the past have crumbled. Why, you ask? Because change comes for us all, and change is upon us again.
But, what IS happening beyond a shadow of a doubt is a total Reshaping of Retail and in this post, we're going to address a few ways in which this industry is changing.
One crucial decision driver that has begun showing a strong effect on the retail industry is brand identification. With Millennials hitting their 20s-30s, all eyes are now on the up and coming Gen-Zs and brands are competing to see who will connect with the demographic of the next decade.
There was a time when companies shied away from politics and ideals, fearing that it might possibly alienate, or limit their consumer base. The generations of today have forced organizations to change this.
"Brands no longer have the luxury of not engaging with their customers... Customers, especially millennials and Gen Z, have high expectations and want to know with whom they're doing business." -- Megy Karydes for INC
Nike is a perfect example of this. Their "Just Do it" Campaign tends to focus on inspiring grit, determination and overcoming hardships.
The most recent and polemic ad landed *free* nation-wide coverage by featuring Colin Kaepernick's face with the words "Believe in something. Even if it costs you everything".
Some folks burned their sneakers, company shares tanked for a day, but ultimately, shares recovered and Nike not only saw an increase of 31% of online sales, but gained $43 million worth in news coverage and buzz.
REI, Patagonia, Facebook and Target are other examples of brands that strongly advertise their beliefs and rally behind socio-political causes.
Shifting The Focus Towards Experiences
"Many of the brands millennials and Gen Z shoppers are turning to today have done a better job of creating immersive, in-store experiencesthat offer some appeal beyond the products sold there."
A lot of futurist brands have begun shifting towards offering experiences as opposed to products.
"While there are plenty of reasons malls are dying I would wager that the primary one is that they sell nothing that the average young person wants, especially given all of the choice on the Internet" -- says a TechCrunch article from 2017, "The experience of clothes buying, the micro-retail experience of finding something only you know about, will become far more important. Retail isn’t dying, it’s changing."
Micro-retail Will Replace Maxi-retail
The buying experience is just a relative as ever. The problem is that most big retailers no longer provide an experience that consumers look forward to. Shopping has become a task, and tasks should fall under Joe Pine's category of time well saved as opposed to living experiences through time-well spent.
Verizon is taking the lead in this area by designing Destination Stores that are a completely new concept. The stores look more like high-end coffee shops, with lounge areas and artwork. The idea is for customers to allow time to go by while experiencing life with Verizon, as opposed to only purchasing a product or service from them.
Nordstrom is also innovating with new concept stores that focus on experiences. They have set out to create neighborhood hubs that offer personalized experiences such as tailoring, grooming, bar service and refreshments as well as a personal shopper to curate selections to the individual taste of the shopper. Purchases will be delivered to customers’ homes on the same day. There is no in-store inventory.
The message here is simple: the brick-and-mortar retailers that WILL survive are those that, like Verizon and Nordstrom, understand and bring back the experience of shopping. The rest will eventually migrate to time well saved, web-based alternatives like Amazon, or cease to exist.