OAK BROOK, IL— Talk of the urgency for retailers and suppliers to adapt to an experience-focused marketplace gripped industry leaders at the recent IHA Chief Housewares Executive SuperSession here.
Marshall Cohen, chief retail industry advisor for The NPD Group, underscored the challenges faced by retailers because some 36% of consumer discretionary spending power has been gobbled up by increasing “committed consumption,” which today layers higher health care costs and subscription services, such as streaming music and video, atop traditional monthly expenses.
This has spurred an on-demand retail market, Cohen said, that should be an impetus for mainstream retailers steeped in traditional to break from conventional merchandising practices, such as stocking swimsuits in February and winter coats in August.
“People aren’t rushing ahead of schedule,” Cohen said. “People want to buy something when they need it.”
Cohen said the shift in shopping habits also should push retailers away from traditional category sections and toward lifestyle presentations.
“Consumers are shifting spending to creating memories,” Cohen said, noting, for example, the opportunity for housewares to ride the projected 6% annual growth of the outdoor living busines the next five years. “It’s all about lifestyle merchandising. Make it easy for them.”
Michael Dart, consumer and retail practice partner for consultancy A.T. Kearney, heralded the “end of the mass market— of standardized retail experiences.”
Dart said retail destinations that provide entertainment options and/or active shopper involvement (such as farmer’s markets) can be big winners in a marketplace that finds convenience to the top of most consumers’ shopping lists.
Noting the rise of peer-to-peer commerce, such as Etsy, as another threat to traditional retail, Dart encouraged brands to apply “empathetic retailing.”
Estimating that emotionally connected consumers spend some 52% more on products and services, Dart cited vital shopper considerations: “Do you understand my life? Are you really trying to improve my life? Do you have my best interests at your core?”
Dart identified several attractive brand attributes: immediacy, personalization, interpretation, social sharing, embodiment, patronage, discoverability.
“Meaning is king,” he said. “A brand has to stand for something.”
Dart added the conditions favor a resurgence of independent specialty retailers, as he calls it, “Revenge of the mom-and-pops.”
“People like to shop locally,” he said, noting that independent book stores, among the first retail segments hammered by e-commerce, are among the fastest growing segments. “They like a connection to the community. They like a place with knowledge and service.”
Telsey Advisory Group’s Dana Telsey, CEO/chief research officer, and Joe Feldman, managing director/assistant research director, echoed the re-prioritized consumer values driving retailing in an experience marketplace.
“Personalization. Customization. Localization,” Telsey said. “This will feed the growth of consumer spending, the growth of brands and the growth of retailing no matter where you shop.”
While Telsey said retailers typically aren’t the earliest technology adopters, Feldman said many are catching up to the opportunity to use technology to “revolutionize the back and front of the house.”
“Everybody is working to give consumers back their time,” Telsey said.