The 4-Part Evolution of ‘Retail’

Fifteen years ago, when Nike launched a shoe, every retailer received the same kit that included an end-cap, a pedestal, and a banner to market the shoe. Today, a shoe release is augmented by pre-seeded influencer kits, hyperlocal and immersive in-store experiences, and pop-up events that target social celebrities and fans. This example begs the retirement of the term “retail” and its dusty, bankrupt connotations in favor of something that bares little resemblance to its predecessor.

In fact, these highly tailored brand experiences surely reflect a tectonic shift in consumer habits. Shoppers are looking for an emotional connection with the brands they choose, and while cost, convenience and choice still matter, they're merely inputs into personalized, experience-led campaigns that forge connections and build community. To meet these demands, brands are increasingly shifting perspective and marketing budgets to de-prioritize brand standard consistency in favor of disruptive, one-off executions in key markets. Rather than pushing messaging and products via one-way channels and mass advertising, they're encouraging conversation based upon shared values.

The outcome of this shift is a four-part evolution in how brands interact with consumers. Brands are shifting their metrics of success as omnichannel 2.0 emerges, while shareability increases in importance and brands become more “interested” than “interesting.”

1. Brands are shifting their metrics of success: shared, social and more qualitative human metrics are beginning to join traditional barometers like retail conversion rates and items per purchase. They reflect the questions that need to be asked in order to build long-term loyalty, not just one-time purchases. How to take action:
   • Identify target consumers. The obvious identification is your core group of consumers. Less obvious but of equal importance: Who do you want to be relevant to? L’Oréal, for example, sells to the shopper who has been buying the same eyeliner at CVS for 15 years. But with its Technology Incubator group, L’Oréal is “disrupting the future of beauty” by developing skin care and personalized technology that speaks to an audience beyond the aisle to include dermatologists and beauty influencers.
   • Find that audience. Where are these consumers spending their time? On social, at events, in-store, online? Do your market research, meet them where they are, and invite them to participate.
   • Evolve content and storytelling — and the vehicles to deliver that — then compile relevant metrics for a more holistic return on investment. Get comfortable moving toward a mix of qualitative and quantitative, with traditional stats augmented by newer ones like social engagement or high-value press coverage.
2. Omnichannel 2.0 is emerging. Modern consumers behave differently, so they need to be treated differently. Consumers are savvier and more connected than ever, and digital, advertising, retail, event and other verticals need to merge their spends, metrics and strategies to effectively communicate stories across channels. Selling a product is different than seeping into culture — brands need to do both in today’s consumer environment. How to take action:
   • Create a filter. Start with an initial set of assets for your product or campaign, then use those assets to tell different elements of your story in the appropriate channels. Each piece of digestible information, whether a social post, in-store end-cap, advertisement or packaging, ties into the same message and story in the right way while augmenting the other pieces of the story.
   • Align strategies. At the very least, verticals need to talk to each other. Currently, they almost always exist in a silo. Your ad agency typically has no visibility into your retail or social strategy, which fails to create a cohesive story. Bring them together to create a dimensional and layered strategy.
3. If it’s not shared, did it matter? Shared content and social media will continue to grow as more than a check box for brands. Shareable moments are invitations for participation; they must be culturally relevant and exciting to have any value. How to take action:
   • Create a conversation. Consumers won’t want to be sold to. Instead, create the opportunity for discussion by identifying meaningful shared values between brand and consumer, and create moments that elevate those bigger ideas.
   • Build strong brand advocates. People will only post your content on their own social channels if they believe in your mission. Create a common culture and use that as your foundation for campaign building. By designing experiences that invite consumers to participate, you can spread your brand message aspirationally without dominating the conversation. The most organic and effective marketing is that which is shared by choice by people who truly love your brand.
4.  Brands are becoming more “interested” than “interesting.” Rather than working to attract attention (be interesting), brands are expressing more care (being interested) in their customers. Personalized marketing is on the upswing, as evidenced by Coca-Cola’s Share a Coke campaign, which placed popular millennial first names on bottles, as well as Spotify’s “Discover Weekly” playlists, which tailor content based on a user’s listening history. They add to the brand experience in a personal way. How to take action:
   • Put the consumer at the forefront of all of your decision making. Commit to making their lives better or easier.
   • Focus on solving problems, not creating category-leading products. You’ll end up with a fantastic product as the result.

This evolution is ongoing. As technology and attention continue to change, success will require keeping a keen eye on how people behave and consume content. It will require the ability to create an emotional connection with customers not only in the physical world but also the digital one — and with a story that resonates in a very personal way in an omnichannel world.

While these shifts may seem extreme or risky, the bigger risk in a changing landscape is to do nothing and continue to behave in the same old ways. Failing to evolve will render a brand irrelevant in a world in which consumers must connect to brands in deeper way than ever before.

Peter Beck is the executive vice president of retail strategy and client services at IDL Worldwide, leading its global growth strategy and client services organization.