Consumer Shopping Habits Continue to Change. Here’s How Retailers Can Keep Up
From pick-up only parking spaces and curbside delivery services to scan-and-go checkouts and touchless shopping, stores look different now than just a few years ago. Prior to the COVID-19 pandemic, retailers knew they needed their stores to become more than just a point of sale and started to make changes. Over the last two years, consumers sought increased convenience and safety when it came to shopping, and retailers rose to the occasion. Now, as inflation continues and a possible recession looms, brands must continue responding to consumer needs.
In a recent survey, Tango set out to understand how Americans' shopping habits and behaviors changed after two years of a global pandemic, which accelerated the shift toward consumer demand for a seamless in-store to e-commerce shopping experience. The survey found that a majority of consumers (94 percent) are satisfied with the changes stores have made to accommodate this shifting demand. However, it also revealed that over four in five (83 percent) Americans say stores can become more innovative in how they utilize their retail space for in-store shopping, order fulfillment, and pick-up.
Innovating With Experiential Retail
A good store layout is no longer just about improving navigation for customers. Shoppers have shifted from searching for products in-store to seeking a more streamlined experience. And lately, the experience has become more important than the goods themselves. Apple demonstrated that a store doesn't need to be filled to the brim with products to be successful. In recent years, several direct-to-consumer brands have moved into brick-and-mortar spaces and followed Apple’s model. The travel brand Away is a great example of using retail space as a beautiful showroom for your products, with dedicated space for customers to test products before purchase.
Another experiential trend in retail are shop-in-shops, when a brand opens up a small-format space within a separate brand’s larger location. For example, a popular beauty retailer commanding space within a big-box retailer’s store. This not only satisfies the beauty brand's existing customers by making it easier to shop its products, but is also an opportunity to draw in new customers.
Optimizing Store Layouts to Expand Service Offerings
Though a retailer no longer needs its entire inventory on shelves, it does need to offer all the service options customers are seeking to see continued success. This includes shoppers’ new mainstays like buy online, pick up in-store (BOPIS), curbside pickup, and dedicated pickup parking spots, in addition to future-proofing retail space as trends in consumer demand continue to shift rapidly.
Displaying What You Stand For, Not Just What You Sell
A recent global study conducted by Ipsos found that 70 percent of consumers buy from brands they believe reflect their values. A growing number of retailers seeking to increase the "stickiness" of their brand with shoppers are dedicating retail space to demonstrate priorities instead of product. This includes brands launching specialty stores that completely forgo packaging to reduce waste; brands repurposing flagship stores to tell a cause-focused story they believe in, rather than the products they sell; and brands including community space in their retail footprint, offering educational programs and hosting events to benefit the local community.
Meeting Consumers Where They Are
The rise of hybrid work has changed both how and where people work and live. The suburbs around cities like Austin, Texas, Phoenix, Arizona and Boise, Idaho are some of the fastest growing in the country, while populations in dense urban areas like Los Angeles and Chicago are decreasing. So whether a retailer is improving its in-store offerings or finding new ways to bring in consumers, one thing remains unchanged — location is still everything.
To manage these challenges, retailers must have the right technology solutions to yield the insights needed to inform location-based decisions. A store lifecycle management (SLM) solution that leverages machine learning removes the inefficiencies of traditional location modeling by sifting through large data sets to develop models that best interpret the current environment.
Retailers have had to make many adjustments over the last two years to meet both consumer needs and market changes. Though the consensus on their work has been favorable, that doesn’t mean they can be complacent. As we emerge into the “next normal” phase of the pandemic and beyond, retailers that continue to innovate will continue to reap the rewards.
Bart Waldeck has more than 22 years of real estate software and consulting experience. Prior to joining Tango Management Consulting, he was VP of Marketing and Product Strategy at Accruent where he worked with more than 100 clients including Family Dollar, Charming Shoppes, Panera Bread, Starbucks, and Target.
As a founding member of Lucernex Technologies, Bart was VP of Professional Services and Business Development, working with clients such as Chipotle, YUM Brands, and Carmax. He has held positions as Managing Director at NorthStar Advisory Group and Manager of Retail Financial Services at CB Richard Ellis, where key clients included Home Depot, Bridgestone Firestone and AT&T Wireless. As a member of Accenture’s retail practice, Bart consulted with several strategic clients including Best Buy and The Gap.
Bart received his BS in Economics from Northern Illinois University and his MBA in International Marketing & Finance from the Charles H. Kellstadt Graduate School of Business at DePaul University. He has been a speaker at ICSC, CoreNet, IFMA, the National Retail Federation (NRF), Realcomm, and numerous other industry events.