Welcome to the third and final part for our summary of Shoptalk for 2017 (you can read our previous posts here part 1 and part 2). In this post we’ll finish our recap on the conference by talking about the move by many retailers towards experiential retail, trying to understand both millennials / gen z and finally our overall thoughts from the last 4 days.
Our shopping experience has changed drastically over the past few years, especially with the advent of the internet. However looking across many retailers the store experience hasn’t changed much since the early 1900s. With that being said, there was much talk over the 4 days around the move towards “experiential retail”.
So what exactly is experiential retail? Much has been talked about how online is taking shoppers away from traditional brick-and-mortar stores, however there is one advantage that physical stores still have over online – that is online shopping lacks the service that can be offered in-store. Whilst consumers can always purchase products online, people will still go to brick-and-mortar locations to have “experiences”.
We saw many examples of retailers moving into the “experiential” by providing more interactive and personalised experiences, but two in particular stood out to us. Firstly let’s talk about Sephora, who are arguably one of the leaders in the space of experiential retail.
Younger consumers in particular (e.g. millennials) are driving the trend in retail towards experiences. We had the chance to listen to CEO of Sephora Calvin McDonald talk how the company is building experiential and playful spaces across it’s stores.
Sephora are really owning the space in experiential retail. Whether it’s through holding in-store beauty classes or inspiring consumers through a virtual assistant that allows customers to play with products digitally (in-store or through the Sephora app).
Another leader in the space of experiential retail is fashion retailer Rebecca Minkoff; and we got the chance to listen to CEO Uri Minkoff talk about what the brand is doing in the space.
Rebecca Minkoff are currently rolling out interactive digital mirrors in their change rooms and even the ability to self checkout in-store. The brand has even recently announced that all of it’s handbags will now be fitted with embedded QR codes. One of the biggest challenges for fashion retailers is that once you sell an item, how do you continue getting your customers to keep wearing? QR codes on handbags allow consumers to remain engaged with the product. Step into a store and the smartbag will provide a “unique experience” by giving consumers access to exclusive content, product recommendations and special offers.
Some insights into the Gen z consumer.
One buzz word we heard throughout the conference ad nauseam was how to target millennials (or Gen Y). But there is now beginning to be some talk in the retail space around targeting the generation below millennials, Gen Z – especially now as they become to older and starting to have disposable income.
At the conference we had the chance to attend a panel of “Gen Z” consumers, where a bunch of marketers asked a diverse panel of Gen Z consumers a range of questions around their shopping behaviours and attitudes. Naturally there were some insights into how they value experiences over products, were more socially / environmentally aware and there favourite place to hang out was the mall. No real surprises there… But there was some insights that surprised even us. Now the below should be taken with a grain of salt given this is a very small sample size, however it still gives us an interesting understanding into how the younger generation are beginning to think.
- When it came to fashion they all wanted the latest and greatest however they’re ruthless bargain hunters. Gen Z don’t care about the brands they wear, but just want to replicate a certain look they’ve seen at the lowest price possible.
- Forget the idea that Gen Z check their mobile devices x number of times a day… they are simply connected throughout all waking hours.
- Generally all members of the panel were active across 3 social media platforms. Snapchat was by far the leader. Most admitted they were using less-and-less of twitter; and generally only used it to follow celebrities.
- None on the panel had a wearable device (whether that be a smartwatch or fitness tracker) or aspired to purchase one in the foreseeable future. Their response – why would they need one when their phone did all this for them?
- Generally didn’t participate in loyalty programs. But for those that did, what was there favourite? Starbucks (mainly because they got a heap of freebies from it).
- And perhaps the most surprising to us, all those on the panel would rather a new model phone than their first car…
Our final thoughts…
Well that’s a wrap for our coverage of Shoptalk 2017! It’s been an great 4 days attending here in Vegas (albeit busy), but it’s been interesting to see the challenges that the US retail landscape is currently presented with. But perhaps more importantly, its been interesting to see how retailers are continuing to change and adapt to these challenges. We expect these challenges to present significant impact on the Australian retail environment in the not-too-distant future – especially with the arrival of Amazon to our shores in 2018 and it’s threat to established bricks-and-mortar retailers here.
Perhaps one quote from the conference summed it up best (from Charles Darwin of all people). It’s not the strongest that survive, but most adaptable.