The “ever shifting” customer puts demands on marketplace

Filed under: Uncategorized | Tags:

Consumers are grabbing more power and demanding more from stores—and new research says that’s not going to change.
The study of converging consumer trends by Andersen and Texas A&M University’s Center for Retailing Studies says the rapidly changing retail environment means retailers must be ready to transform their businesses and grow in totally new ways to be able to survive.
The “ever-shifting” customer determines retail winners and losers, but now they also define the actual store’s purpose and function, said Jay Scansaroli, global managing partner of Andersen’s Retail Industry Services and study co-author.
Scansaroli and co-author David Szymanski, a research fellow and director at the university’s Mays College & Graduate School of Business, announced their findings Jan. 16 at the National Retail Federation convention in New York City.
Scansaroli and Szymanski and their research team collapsed 300 identified consumer trends into 46 major patterns that were refined to 14 broader trends. They further organized these into six megatrends, and hosted round-table forums to discuss them with senior executives from 10 leading retailers.
The forums validated the findings and sparked discussion on retail implications for the next three to five years, the researchers said.
Work, social changes and technology have given consumers unprecedented power in deciding where and when to shop, and often are more knowledgeable than retailers about products and terms.
Consumers also want retailers to give them value and reflect who they are. At the same time, they have contradictory demands.
Small and independent retailers could have more leverage in the sea of “big-box” blandness offering similar products, pricing, and store experience. But all retailers will need customer-centric strategies to compete effectively, Scansaroli said.
Who are these new consumers? Six megatrends the researchers found:
1. Composite Nation
The “American Family” has been redefined. What’s typical or normal today isn’t what it used to be. Diversity has always been part of America, but its magnitude continues to intensify, Scansaroli said. Not only are racial, ethnic, and cultural backgrounds increasingly diverse, but so are family arrangements when it comes to gender, extended family, and heads of households.
Americans have become more aware and tolerant of diversity and individual differences, Scansaroli said.
2. Cueless Customers
Retailers are clueless because consumers aren’t giving cues that follow time-worn demographic lifestyle and spending patterns.
“As society increasingly embraces individuality, diversity and self-expression, the once-clear clues to lifestyle and potential spending power — factors such as age, gender, style of dress and even vernacular — seem to have disappeared,” Scansaroli said.
“Young” old people and “old” young people, children taking on more and more adult roles and adults maintaining younger lifestyles are examples. Stay-at-home dads and corporate executive moms, increased urban and ethnic influence, multi-community memberships — these people were brought up on relatively new values and their tastes range from here to there, Scansaroli said.
Complex and multi-dimensional, customers have shorter attention spans, less patience and are accustomed to many choices.
3. Consumer Power Shift
The Internet and consumer-focused media have given consumers near perfect information about sales terms and available service and product options — even before they enter a store. They immediately know “transaction fairness.”
Because of time-pressed lives, consumers also are increasingly intolerant of anyone or any entity that fails to respect their time.
Consumers are increasingly aware of their patronage’s value and have come to expect something in return for it. They seek ways to control their shopping environment and thrive on experiences that put them in control, Scansaroli said, and they’ll reject experiences that deny them that.
4. Stimulation and Sanctuary
Multi-tasking used to be a computer term, now it describes consumers, Scansaroli said. Cramming more activities into shrinking slivers of time and inundated with stimuli, consumers seek “real experiences.’ They turn to extreme sports and adventure vacations and the search for the meaning of life.
Fast-paced lives had already begun to seek refuge, but, coupled with the Sept. 11 terrorist attacks, the search for spaces of retreat, reflection and spirituality are becoming increasingly important.
The search for meaning has led to consumers’ increasing focus on spirituality and religion. Churches, spas, yoga classes, candle sales, and other mood creators are receiving more consumer dollars.
Scansaroli said retailers could be caught in the middle with customers seeking greater solace and stimulation, often from the same retailer at the same time.
5. Amorphous Codes and Spaces
Increasing diversity, changing social and gender roles and self-identity in multiple communities is rapidly changing social norms and mores. Conduct codes of the past have less influence as consumers constantly reinvent themselves, often “on the fly.”
Cell phones, personal digital assistants, the Internet and other new digital capabilities allow consumers to redefine home, car, office and retail to whatever they perceive it to be, Scansaroli said.
“Space is occupant- and task-defined, and the definition changes constantly,” he said. “Consumers will be drawn to space that offers an opportunity to impart their own sense of meaning in their own way onto their own experience.”
6. Communities Everywhere
Multiple loyalties are no longer a contradiction in terms and tradeoffs aren’t necessary, Scansaroli said. People belong to multiple groups: club, church, neighborhood associations, volunteer groups, etc. Today’s youth participate in multiple, seemingly incongruous activities: extreme sports and violin lessons; soccer and ballet.
More options are available and are being pursued and modified throughout consumers’ lives, Scansaroli said. Consumers seek multiple, unique and meaningful communities to share, express and grow with fellow advocates.
Scansaroli said for businesses, the megatrends mean:
– Customer respect is central to business success;
– Retailers must know their customers’ souls, not their demographics;
– Customer satisfaction is minimum, success is driven by customer enthusiasm;
– Customers drive the experience and they customize it, not retailers;
– Customers value retailers who lead causes rather than support them, because it reinforces the perception of community.