Let’s give ‘em something to talk about! That was the vibe as thousands of retail changemakers descended on Las Vegas last week at the Shoptalk conference to explore the future of retail, from the latest tech breakthroughs (ahem, AI) and shopping trends, to business models (move over, direct-to-consumer) and lots more. At M Booth, we’ve distilled all the buzz about consumer behaviors and emerging technologies into five trends retail marketers should know and act on right now.
1. We’re Experiencing a Retail Renaissance
Retail trends during the height of the pandemic were as unpredictable as Vegas’ blackjack tables. There was speculation over the future of retail, with many predicting once again that the physical store was dead—not the first time in recent years that we’ve heard that kind of message. Luckily for retailers, brick-and-mortar is here to stay. But for stores to succeed, they must be agile enough to keep up with the rapidly changing expectations of today’s consumer.
For example, prior to the pandemic, stores looked to “retailtainment” to drive foot traffic. Now, consumers look to physical stores to discover and buy products—and don’t have the time or desire to be entertained while shopping. In fact, brands like Zara are finding ways to make the in-store shopping experience seamless, allowing shoppers in their London flagship store to search a product’s availability in the store’s mobile app and pay for it directly in the app. Canada Goose also got rid of their in-store monogramming offering when they realized it took up too much floor space, which was better served housing inventory and giving customers room to try them on. Bottom line: As long as the in-store experience is frictionless and continuous, customers will return.
2. High-Touch is the new high-tech
It’s not just about the latest technology. Human interaction is more important than ever. In fact, there’s a juxtaposition between emerging technology and a renewed focus on the importance of store associates—on the front lines, they hold the key to the relationship with customers and are receiving feedback directly. Consumers have endless options of where to shop, so it’s vital every interaction is perfect and to give them the frictionless experience they want, it’s important that store associates are knowledgeable and helpful. It’s no coincidence that Foot Locker refers to their Stripers as the face and heart of the company given the vast amount of one-on-one interactions with customers. Stores need to strike a balance between physical and digital (a term recently coined “phygital”)—and the store associate can help bridge that gap, especially when armed with the right technology. Panera Bread’s implementation of Amazon One technology to use handprints to greet loyalists by name, suggest menu items, and enable to pay seamlessly is just one great example.
3. No More Secondhand Stigma
Gen Z is taking secondhand shopping from stigma to status. The rise of resale—which is growing 16x faster than retail—allows for personalization and can be a great side hustle, as consumers carve out their own identities and discover one-of-a-kind finds. At the start of the pandemic, people looked to resale sites like ThredUp and Mercari, an M Booth client, as a reason to clean out their closets and earn some extra cash. Now, 50 percent to 60 percent of young consumers are more likely to buy a used product instead of a new one, demonstrating a major shift in consumer behavior from shopping secondhand out of necessity to shopping secondhand out of choice.
The resale mindset is also informing purchase behaviors of new goods, particularly when it comes to luxury items, as consumers view them as investments and consider the resale value when purchasing. The thought process is that if you buy things of quality, you’ll get your money back. Nonetheless, sustainability is also important to this customer base and it’s inspiring brands to build sustainability into their business models. 2024 will see brands doubling down on purpose, and supporting the circular economy is a great way to do that.
4. AI for Good
Despite the buzz around AI, our prediction is that the technology will not be replacing human jobs. Instead, it will be used to drive efficiency and lower costs. In fact, it will make it possible to supplement jobs that people don’t want to do and make them more efficient, such as predicting stock inventory in warehouses and writing product descriptions. Take IKEA, for example, which replaces low-value tasks such as warehouse stock inventory with drones, robotics, and automation to enable employees to take on high-value tasks that are consumer-facing. While there are risks with AI, such as bias being built-in unwittingly, when used thoughtfully, brands can use the technology to supplement human jobs by taking over low-value tasks and allow people to take on more desirable and high-touch, consumer-facing responsibilities.
5. DTC Takes On a New Meaning
Goodbye, direct-to-consumer and hello, demands-of-the-consumer. Convenience is the top priority for consumers, giving retailers a need for speed. Believe it or not, consumers are still willing to pay a premium to fulfill their “see it, want it, get it,” mindset. The standard of two-day shipping has been eclipsed by the expectation of same-day delivery—just look at DoorDash’s recent partnerships with Victoria’s Secret, Lush Cosmetics and Party City to deliver merchandise in a jiffy. Gen Z’s discretionary funds, and the proliferation of “buy now, pay later” tools, let customers access more, immediately. To survive in the new DTC world, brands will need to shift from product-led marketing to consumer-led marketing, putting forward meaningful big ideas rather than simply selling a product.
For more information, or if you want to discuss where to focus your retail marketing and communications for impact, please contact BariK@mbooth.com.