Retail Revolution: The Customer Is Now In Charge

Rose Hamilton, Chief Digital Officer of Vitamin Shoppe, noted at eTail East this year, "We are moving from a retail business to an experience business." People buy experiences, not just things. Recognition of that truth is changing the balance of power in retail and opening new opportunities. San Francisco State University research found that spending money on experiences rather than material items makes people feel "the money was better spent." People would rather spend money on joyous, novel experiences.

"We are moving from a retail business to an experience business." - Rose Hamilton, Chief Digital Officer of Vitamin Shoppe

Of course, people have to buy less experience-based items such as toothpaste and toilet paper. But even when consumers purchase seemingly trivial goods, they often choose among similar options or where to buy them based on which provides the most happiness. Consumers do not coldly calculate their expenses; they prefer warm, emotional exchanges. Retailers that recognize and address this reality have a leg up on their competition.

What do consumers expect?

Finance and retail savant Walter Loeb recently wrote a piece detailing this phenomenon. In essence, Loeb explained that retailers cannot resist change. Rather, they must embrace "forward-thinking" technology like Macy's Magic Mirror. They have to champion omnichannel retailing. They have to go out of their way to make sure customers come back again and again.But how exactly must retailers tailor their omnichannel customer experience? A 2016 IBM study on customer expectations speaks volumes toward a substantial answer.

  • Based on their findings, "inventory visibility is now essential." 81% of customers would choose a different retailer based on inventory visibility alone-- they absolutely need to know whether an item is in stock (and in what quantities) before they come in.
  • Further, the study revealed the importance of mastering the omnichannel environment, which is now being influenced by experiences outside of traditional retail. IBM calls it the "Netflix Effect": consumers want the freedom to start shopping in one channel and continue seamlessly in another. If they walk into a physical store, employees there should be able to help them with purchases started online. The data shows that this desire is increasing on the whole, and is even more prevalent in younger age groups.
  • Thanks to Amazon, 72% of consumers now expect free two-day delivery for online purchases. According to IBM, the impact that swift shipping has on a consumer's decision to buy is "significant."
  • Most concerning of all? There is a huge gap between what consumers say is most important to them and how retailers are performing against those capabilities. For example, 88% of consumers in the IBM study said that “providing detailed order status via any channel” was very important, yet only 48% of retailers are delivering.

An important opportunity

Obviously there’s still quite a bit of work to be done to meet these evolving consumer expectations -- what research firm Euromonitor has dubbed "the new consumerism". Retailers should not see this as all bad news, though. Rather, it’s an opportunity to re-focus efforts on creating a great shopping experience that consumers are excited about frequenting. Fast & free should be considered table stakes at this point. Communication and package status details are true differentiators, and also serve to provide consistency which is key to building trust. But it’s critical to seize this opportunity now to stay competitive; time and consumer tides wait for no one -- and consumers have made their requirements clear.How are you meeting the new consumer expectations? Hit us up on Twitter @narvarinc.

Andria Tay

Andria is Global Director of Marketing & Communications at Narvar. She grew up in entertainment at iconic brands like EMI & MTV before pivoting to ecommerce, most recently at

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