There has been a lot of turbulence in the industry since the recession. After such a financial crash, we have questioned our finances and our governments. Understanding the influence on the consumer is crucial to success in modern retail. Ideas put forward such as The Great Unwind by John Gerzema, aim to explain this phenomena. Poor consumer confidence was presumed to be the sole reason for movement of preference but now as recovery is in effect we are seeing different degrees of permanence and an array of new habits. The obvious trend is seeing consumer’s desire to economize but there is more to the story than this:
Experiential retailing – the consumer lifestyle and demand has moved to suit the conditions in which e-commerce creates. Specifically retailers are unable to compete with the convenience, price transparency and range the internet offers. Therefore retailers need to look at the experience they provide within shops to differentiate themselves. A unique fit out can be a key influencer, combined with great staff and an environment that connects to them. Urban Outfitters argue themselves that their successful expansion is down to their shop fittings and environment having such a strong empathetic connection to their consumers, so distinct that it becomes persuasive. You need to immerse them in an ideal in which they can identify with within your store space.
Simplicity – consumer’s are becoming bored with complex offerings. Search costs have come under the spotlight in recent years with new technologies allowing such easy access to goods. With attention being the new metric of a lot of modern economics, brands need to think about edited reduced retail offerings in order to entice consumer’s into shops.
Lack of loyalty – this isn’t in terms of brand recognition, more the reduced search costs that modern times allowed. John Pal (2010) a retail expert suggests that the brand loyalty allowed many retailers to become lazy with their relationship with shoppers during boom time. A more financially pressed consumer will break these bonds typically when their value offering is better elsewhere. Retailers need to constantly challenge, not their price point, but the true value of what they offer the consumer and how that relates in the market.
As a shopfitting contractor, serving the retail industry we see these trends first hand in the rise and fall of different businesses. As an understanding of what works, we aim to provide a physical consultation for our clients to explain to them our experience of working with many successful retailers on great shop fit outs.
Harvard Business Review: www.trajectorypartnership.com/wp-content/uploads/2013/09/HBR-article.pdf