Key insights to help with retail customer engagement
Connecting observable shopper behaviour to strategic design solutions is essential in developing long-term strategies for retail growth, according to New York-based strategic design group Brew/SDC, which has researched four key cultural insights linked to successful in-store customer engagement.
All four insights focus on one specific cultural product dichotomy: traditional versus new. Both categories hold personal meaning for shoppers. But while those perceived as "traditional" products often rely heavily on marketing incentives that are consistent with pre-conditioned needs based on consumption experiences in the home (often learned during pre-adolescence, the company says), the "new" products must be handled differently. According to Brew/SDC, new products have to be made perceivably relevant and valuable to shoppers - through more compelling retail experiences.
Insights for consumer engagement The four insights revealed by the company's research are as follows:
- 21st century Alpha female shoppers According to Brew/SDC partner Ben. C. Roth, "36-24-36 relates more to the modern woman shopper in terms of her median age, hours she manages in her day, and the number of buying decisions she weighs at any one time. Busier, more educated, having more say in the workplace, and having deeper pockets defines the 21st century Alpha female shopper."
Indeed, her preferences have now extended to include categories such as technology, travel & leisure, and fitness. When shopping for new products, she is receptive to a range of unobvious lifestyle and cultural product combinations (e.g. food and fashion, fitness and technology, and so on). Who would have imagined running shoes that communicate fitness data to an iPod? Nike did, and that combination has become a hit with women. In summary, what the 21st century Alpha female shopper wants are smarter, timesaving, fresh, healthy, service-oriented products and shopping experiences.
- The retailer serves as a lifestyle tour guide In-store studies have exposed opportunities for retailers to connect with and influence shoppers through more targeted and cohesive messaging strategies aligned to lifestyle. Roth explained that many retailers are driving increased purchases by creating relevant segment and sequence cues through the shoppers' entire buying cycle - beginning with inspiring messages at home to guide shoppers to the store, then using supporting messaging in-store to drive in-aisle shopping behaviour.
For new products, cohesive lifestyle messaging along the shopping cycle brings potential buyers closer to influential information at critical moments while they are in the store. It is difficult to argue with the success Starbucks has experience by translating every cultural cue possible into a branded customer message. For example, Starbucks sells music, employs in-house fine artists, provides Wi-Fi internet connectivity, and most US stores sell the New York Times and local papers. Beyond selling coffee they also sell food, water, juice, tea, and almost every drink-related accompaniment that can be imagined. Retailers are increasingly aiming to apply that concept to their stores, brands and products.
- Ready-to-go products According to partner Brock Danner, shoppers are increasingly wrestling with the problem of fulfilling all their shopping needs within their ever-diminishing free time. And with women making the main buying decisions for households, retailers have found ways to accommodate her needs by preparing and packaging ready-to-go products in culturally relevant ways.
For example, there are family-friendly assortments, table-ready food combinations, after-school snack packs, and of course in-store merchandise assortments and adjacencies, all providing evidence of this growing cultural phenomenon. A good example is the Ready-in-5 service offered by Sears.
- Environmental consciousness It is difficult to analyse consumer motivation without coming across environmental concerns, and Brew/SDC's research confirms the idea. Nitrates, trans-fats, artificial colours and sweeteners, pesticides, hormones, and antibiotics are all consumer concerns. Empowering shoppers to embrace sustainable products that provide a healthier option is gaining momentum with retailers.
According to partner Lyle Sandler, "We could credit Whole Foods Market for the decisive 'healthier standards' proof-point with its consistent posting of nearly 40% gross margin, +3% net profit margin, 9 consecutive quarters of +20% sales growth and 10% - 20% national expansion growth. And, tracking the recent actions of Wal-Mart and Target, it's clear that long-term opportunity lies in delivering culturally relevant products aligned to both health and the environment."
Indeed, a walk through almost any of those big discount stores will reveal the ways they are capturing value from affluent buyers by offering greener stores with upgraded merchandise assortments and improved store design.
Brew/SDC uses customer lifestyle insights to help retailers better understand shopper buying tendencies and develop in-store design strategies that provide shoppers with a more intuitive and more enjoyable buying experience.