What’s trending now?
Selling solutions, not just pushing product.
We are living in a protracted economic downturn where retailers face, not only challenging times in terms of making sales, but also a post recession customer who has not only embraced a “cautious consumer” mindset but is also armed with new technologies that allows for comparative shopping and a means to side-step traditional marketing.
Why it’s important?
Your traditional consumer (pre-recession) wanted acknowledgement for their custom. In a post-recession world consumers prefer relevance. They want brands to mirror their lifestyle values and that translates into a high expectation for empathy and engagement. They want retailers to help them make better decisions not just sell them a product: they want more value for money, and on top of that better service and a tangible reciprocation for their loyalty – the new consumer currency.
An article published in the Wall Street Journal explained this new consumer perfectly:
“Buffeted by high unemployment, heavy debt loads, falling home values and high food and gas prices, these shoppers have been whipped into a permanent state of consumer caution. They buy only what they need, avoid premium labels, clip coupons and scour sales.”
Brands and retailers now have to work doubly hard to lure this cautious consumer.
What’s the butterfly effect?
The rules of marketing and retail have shifted radically. Traditional advertising platforms are proving to be ineffectual. The online world has provided ample means for anyone to compare brands, vent frustrations and buy from whomever offers the best value, quickest response or service and most importantly convenience.
This means that retailers must now view their competition as both local and global. A bricks and mortar store no longer offers a “non-compete zone.” The bitter pill retailers and brands have to swallow is that your product has, in essence, become secondary: how you offer it to your customer is what is key.
Brands and retailers who not only understand, but empathise with this new cautious consumer, are the ones gaining ground in this difficult economic environment. Too many companies have had a haphazard, knee-jerk reaction to new technologies – which ones to adopt and how to implement them – or have simply fallen into the trap of trying to bombard customers via social media. But Paul Taylor, Director of Consumer Planning at spirits retailer Diageo has some sage advice, “Don’t focus on the technology”, he says, “focus on the benefits.”
At Flux we advocate a similar mantra to our retail clients: don’t focus on your product but the solutions it offers to our busy 21st century lifestyles. Take for example the UK supermarket chain, Tesco. They moved into the South Korean market as Home Plus and came up with a remarkable solution that combined technology, empathy for their clients busy lives, and an efficient service that solved a lifestyle problem for their customers.
This video clip shows the full consumer experience, and how some innovative thinking improved Home Plus’ market share radically.
The global hot spots
This new approach – aiming for customer loyalty vs customer satisfaction (which should be a given in this economic climate) – is spreading across the globe. In particular, the Home Plus idea of bringing the bricks and mortar outlet to your customer instead of waiting for them to come through your door is spreading rapidly. A few months after Flux came across the Home Plus case study, we found the same happening in Prague, at a drugstore, and then the same concept popped up in London in December. Department store John Lewis initiated a similar ‘click and collect’ campaign where shoppers could scan the QR codes of items in the window displays and collect them within 24 hours.
All indicators point to retailers providing their customers with a combined on AND off line experience, providing maximum convenience, and perhaps more importantly, a novel and entertaining way of engaging with your customer and holding their attention. In an age of information overload, whoever holds the distracted consumers attention, is more than halfway to winning the battle for his or her loyalty. All is needed is a change in perspective.
In a nutshell, the competition is now for “share of life”, as opposed to “share of wallet”.
By Dion Chang
Dion Chang is an observer and trend analyst, and the founder of Flux Trends. As an intrepid traveller, he uses a global perspective to source new ideas, gauge the zeitgeist and identify cutting edge trends. He currently writes a trend column for City Press and contributes to various print publications and online portals as a freelance journalist and social commentator.
Image credit: Gallo Images/ Getty Images