Pushing More Than Just Product: What Retailers Need to Know to Lure Back the Mid-Tier Shopper

My father used to have a saying, “If you own a worm store, remember you aren’t simply selling worms, rather you're selling them the ability to catch the biggest fish.” While dad would be hard-pressed to tell you the difference between cashmere and cotton/polyester blend, it's amazing how much mid-tier retailers can learn from this simple, yet poignant witticism. After all, you know the sector is struggling. Yet major retailers continue to focus on product, product, product. As a result, more and more consumers are walking past the front doors of their stores in search of a little something more.

But here’s the thing — it’s not the retailer’s fault. They’ve been doing the best they can, and have been making critical business decisions based on what traditional research has told them. The problem with this approach is when you employ a focus group and ask consumers who are sitting around a table WHY they choose one retailer over another, you're going to get nothing but rational responses. This is because the moment you ask anyone a question, that person has to take all their emotions and motivations and try to synthesize them into words.

Why Humans Aren't Equipped to Articulate the Whole Picture
Like so many other industries, retailers have been forced to rely on antiquated methods of research when making the most critical decisions. The premise seems solid, but the reality is that consumers resort to rational reasons to describe what's driving intent. As a result, mid-tier retailers are made to believe that the following three factors affect their business and profits:

Myth No. 1: It’s the Economy’s Fault
Traditional research suggests that the middle-class has less money and are less likely to spend. Therefore, retailers respond with sales and discounts to draw crowds and move merchandise.

Myth No. 2: It’s the Internet’s Fault
Traditional research suggests online retailers are gaining momentum largely for convenience, as they allow shoppers to browse and buy without getting out of their pajamas. As a result, mid-tier retailers have been reacting by making product available online.

Myth No. 3: It’s the Consumer's Fault
Traditional research suggests that most shoppers don’t see a significant difference between the products offered by low- and mid-tier retailers. So mid-tier retailers invest in new, unique product lines and pay greatly for celebrity and designer endorsements in an attempt to highlight what makes them different.

Worms. Worms. And more worms. But for all the solutions that retailers have already applied to answer these concerns, shoppers still aren't biting.

The Big Unveil: People Don’t Want to Simply Make a Purchase, They Want Knowledge
Thanks to the internet and the whole digital disruption landscape, innovative new research methods have emerged that allow businesses to analyze people without observational bias. Looking to understand what really motivates shopper behavior, our team of PhD sociologists set out to understand who was the most likely person to shop at a mid-tier retailer, and what would help the retailer get consumers back on the proverbial hook.

Analyzing over 4,500 consumers across the United States and using a proprietary methodology called Digital Motivation Research, our researchers were able to observe consumers online as they shared their beliefs and underlying motivations in and around shopping and retail. In contrast to the three myths discussed above, here's what we learned and why it's very different than what traditional research tells us.

Nearly one third (30 percent) of the U.S. population — which comprises more than 90 million shoppers — share a common belief that's motivating which retail store they patronize. To put it bluntly, this group of shoppers do not feel like they’re moving up the socioeconomic ladder fast enough. They feel stuck, and the more someone feels their disposable income and lifestyle has stopped progressing, the more motivated they become to acquire material possessions that give them an appearance of greater wealth. To stagnate is to fail in our culture, so consumers want access to brands and knowledge that, simply put, will help them look richer than they truly are.

In fact, consumers look for essentials at low-tier retailers so that the money saved can be used to access higher-end brands available at outlet malls, or during big sales events. If you try to understand WHY these consumers — who were previously more than happy to shop at mid-tier retailers — are suddenly changing their buying behavior, you’ll realize that they're not buying into higher-end brands because of quality (although that’s often the rationalization). They are buying an artifact that will create the illusion of upward social mobility.

But it’s not enough to simply own an artifact. You have to understand it, know what works with it (and what doesn’t) and be able to talk about it. This is why this 30 percent is seeking out knowledge around the brands they purchase, the fashion that complements it, and the lifestyle it represents. Without this knowledge, one cannot adorn the artifact and feel confident they'll be able to legitimately appear as though they belong to the class they’re looking to emulate. This is exactly where the opportunity lies.

Reaping Huge Rewards by Turning Consumers Into Fashionistas
While brick-and-mortar retailers have struggled to look beyond the item on the shelf, web-only retailers have naturally taken on the role of knowledge building. They look to build rich, fashion-based content strategies to not only keep people coming back to their website, but also to reinforce the quality and compensate for a consumer that can’t pick up and touch a garment. Therefore, the most successful e-commerce sites don’t just sell clothes; instead they sell knowledge by creating both online and real-world magazines. They focus less on sales and instead create lifestyle events. They don’t just sell you an outfit, they sell you the story behind the outfit. This approach provides consumers with alibis that remove barriers to purchase. It provides consumers with the knowledge to wear a garment with confidence. A well-trained fashionista can talk the talk, even if someone more knowledgeable asks them about the clothes they’re wearing as they walk the walk.

This is the kind of thinking that will motivate consumers to visit mid-tier retailers. Maybe it's an operational change like hiring personal shoppers on the floor instead of sales associates. Maybe it could be as simple as rethinking and reimagining point-of-sale materials to reflect the knowledge and information this group needs to arm themselves when they wear that shirt out for drinks on a Friday night. However, given the size and importance of this group of shoppers, we believe this 30 percent will continue to disrupt and reshape the mid-tier retail landscape. But like the worm, the clothes aren't enough. The mid-tier retailer that realizes the most valuable product in their store is knowledge will be the one that thrives in this hypercompetitive market. After all, you can sell someone a shirt and they’ll buy today. Sell someone a lifestyle, and they’ll buy for a lifetime.

Ujwal Arkalgud is a cultural anthropologist, strategist and co-founder of MotivIndex, a pioneer of digital motivation research. Jason Partridge is an insight strategist and business consultant, as well as co-founder of MotivIndex.