The Show Must Go On

Nowadays, the discussion of retail requires an approach where a set of variables must be considered. These include multi-format and multi-channel possibilities that can only be effective if retailers understand what drives costumers, and what kind of strategies are needed to deliver an effective response to them or how to improve the experiential marketing.

These days, consumers vary from informed to unfaithful, and those who no longer differentiate between online from offline, and want to buy anytime and anywhere. Therefore, the transaction of goods and services is no longer confined to limited consumption alternatives, but rather demands a merger that requires retail brands to make quick and constant changes that are not restricted to technological options. Innovation, creativity and flexibility are the keywords in today´s challenges. Time, space and resources drive the redesign of retail business models.

Trying to reach customers through different channels is, therefore, an obvious strategy and one of the reasons we talk about retail ‘hybridization’: online businesses open physical stores and physical stores turn into showrooms for online sales.

Take Amazon, which continues to test retail. After Amazon Go and Amazon Books, the company takes a risk with Amazon 4 stars; a brick and mortar store selling articles classified by customers with four stars and up. Some brands are betting on Showrooming (opposite of ROPO— research offline, purchase online) as another option to engage with consumers in a physical space. Recently, Facebook made its presence at Macy´s with a pop-up concept selling brands that advertise on the social media platform.  With these examples, it becomes clear that we are standing before a hybrid of “clicks-and-bricks” and vice-versa.

Nevertheless we can’t put these shifts down to mere to purchase decisions, there’s another side of hybridization at play. In the future, brick and mortar retailers need to respond to customers who no longer purchase to fulfil basic or material needs. Their consumption will be more and more related to establishing emotional connections, based on rewarding experiences, underlined with symbolic, aesthetic and sensitive actions and, therefore, of a hedonistic nature.

Retail brands are dealing with customers that are eager for experience and inclined to share their experiences. This presents a merger of roles, a transfer of control that obliges brands to interact with their customers and improve their experiential marketing.

Brand perception results in a sum of what the brand wants to communicate, and that relevance to the customer that speaks about it.

Previously brands spoke to customers, now customers speak to brands.

This explains why brands are so concerned with getting customers to participate, asking them to express their opinion, interpretation, comments, photographs, videos, etc.. Brand ambassadors are no longer just known personalities: actors, singers or sportsmen, the average consumer takes lead role in putting out legitimate opinions. He or she is now a co-creator (BtoC + CtoB) and also plays a multifaceted role since social media consumes information shared by others, and simultaneously produces information, making customers (CtoC) co-producers. And if we consider physical store space at the store they are in fact also actors on a carefully designed stage.

All these circumstances are making brands rethink their communication and marketing strategies and blurring the tangible and intangible qualities of the product. The DIY and home wares giant Leroy Merlin for example places emotional messages such as “Imagine”, “Dream”, “Be inspired” in their catalogues. Advocating people over product, meaning instead of being fixed on goods, brands will bet on establishing a more transparent approach, inevitably more focused on the individual, and user/buyer emotions.

This changed brand mind-set is already present in stores.  It´s not difficult to find examples that demonstrate the relevance of the overall store atmosphere, and products are there to enrich the scenery. For instance at the new Hawkers sunglasses store in Barcelona, products are “submerged” in a stimulating and inviting blue swimming pool. Indeed, more than ever, retail brands need to take into consideration good store design and visual merchandising as two fundamental tools to increase experiential moments.

Macro is losing to micro because global is boring and anonymous, and local is synonymous with differentiation and authenticity. This may explain the growing demand for organic products, or how food retailers rely on product origin to promote them in a “farmily” store environment (light coloured wood, dark green, organic shapes, etc.). Self-service is no longer stand- alone; it exists side-by-side with DIY, responsible consumption with smart shopping. These are some aspects that prove we are facing a consumer who does not aspire to consume more, but rather better.

Physical retail is by nature a natural choice to attract this emotional and participative consumer, and the store atmosphere can and must provide special moments: triggering the five senses, nurturing interaction and entertaining customers, who are increasingly becoming collectors of experience.