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.
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.
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 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 Walmart.com.