GlobalShop 2013: Understanding consumers today

23, May. 2013

This year’s GlobalShop once again brought together record numbers in Chicago. Thousands of retailers, designers and marketers gathered this past April for the retail industry’s largest annual tradeshow. 649 of the industry’s top suppliers displayed the latest innovations in design and merchandising on an expo floor that spanned 195,000 sq. ft.

GlobalShop is also the place to discover the latest trends in retail from some of the industry’s most respected commentators. This year’s seminar topics spanned the affects of the millennial consumer, technology, online sales, and consumer habits on retail environments. Jump’s President Eric Boulden was in attendance at a number of this year’s sessions and has composed a summary of the key learnings discussed as follows:

There is a growing generational demand for authenticity. The new generation of shoppers demand transparency in the retail experience, along with a dialogue with retailers themselves. To facilitate this new demand, marketers are learning how to close the gap between their logical, metrics obsessed corporate culture and the emotional world of consumers.

When building up meaningful value propositions, retailers must first understand their audiences. If it is a deeper understanding of the product that resonates with the target demographic, that should become the focus. Increasingly, consumers value a sense of interaction with the retailers themselves. The way a number of brands are creating this two-way relationship is through technology that empowers consumers to have an affect through on-going idea generation input on their needs, attitudes and values.

From this, technology is causing a shift in power from marketers to consumers. Research shown highlights this phenomenon as 9 out of 10 shoppers reported feeling that they themselves were more knowledgeable about products than the store salesperson. Accordingly, the trend today is to gather as much information as possible online before entering a store. Similarly, once entering around 40% of consumers use their smartphones to price check. As surmised throughout GlobalShop, technology has changed behaviours and the retail game altogether. Companies need to make it easier for people to gather product information and create environments that facilitate deeper understandings.

Conference sessions also delved further into our subconscious habits. As presented, there are three dominant purchase states. Surprise and delight and conversely frustration and angst only make up a small slice of what shopping consists of today. In these cases, discovery is left entirely to the consumer, meaning there’s no sales focal point. The majority of purchases however result from routine autopilot decisions; items we’re trained to buy through our habitual tendencies. The easiest way to create this habitual mindset is through brand image as consumers register this first. A constant repetition – as presented with Campbell’s Soup and Snickers – has been proven to effectively train the consumer mind.

A typical household actually only buys 300-400 different items per year, while just 300 items dominate total sales in the market. Broken down, only 30 items dominate total categories and 3 items on average dominate total brand sales. When it comes to these items no marketing is required, the shopper is trained. What is important to consider is the halo effect this can have on surrounding items. Shoppers don’t want to stay in a store longer than they need to; meaning convenience is a huge driver of consumer spending. Moreover, there is a positive correlation from the time it takes to make a first purchase to the likelihood of further purchases in-store. The quicker shoppers find the item they are looking for, the more likely they are to buy a surrounding product.

Retailers then need to target habitual paths. Instinctively, shoppers go where there is open space so it’s important to target these visual strike zones. Lowering the angst of shopping with a well-designed space navigation and strategic use of illumination is an approach many retailers are actively engaging in. New curated merchandising strategies also look at cutting back on quantity. The focus of this is on training the customer on what to look at by giving them fewer options. Through this retailers are able to direct them to where they need to be by emphasizing top-selling items.

Another growing trend is creating visual strike zones in-store by employing a visual bowl floor plan that follows a grid around the perimeter, while the middle area is open, low merchandising displays. The wide aisles U-Turn to create trip congruence and faster shopping visits that result in increased sales. Jump employed this technique in the design of the recently opened terra20, North America’s largest one-stop eco store. Unlike the long straight runs traditional to big box retailing, terra20’s floor plan follows the U-turn racetrack aisle set-up with the ecobar at the back-of-store as a strong visual and destination driver. This creates boutique zones and merchandising opportunities that promote discovery as the customer meanders throughout their in-store journey.

End-caps have also shown to be highly effective, generating 20-40% of store sales. It is important to target them with top-selling products to maximize sales opportunities. Mid-caps are proving capable training markers as well, creating a merchandising focus within the aisle. Retailers, like Costco, have employed these to add focus on targeted product items, seeing a tangible lift in sales as well as the added convenience creating a halo effect for additional consumer purchases.

One of the more interesting points discussed is the massive similarity between online navigation and the traditional bricks & mortar experience. ‘Amazonian Salesmanship’, as its been dubbed, allows you to search to get to a place, and gives you five options for everything you want to buy, much like the options in store. This online architecture mimics the U-Turn. Online retailers often also offer bundles as a means to up sell as a last option before clicking to final sale.

An overall sentiment expressed throughout the show was that while money is beginning to loosen up comparatively to years past, the question is still being asked of where to invest those dollars to gain the most ROI. Return on Investment (ROI) is influenced by many factors: location, brand execution, design, construction cost, etc. but ultimately it is the shopper who falls in love with the brand and the product and buys it, ideally over and over again. So it comes down to how we design brand centric store environments that are conductive to an emotionally engaging experience. This way we can count on a committed audience.

Despite lasting just three days, GlobalShop once again exceeded expectation. Bringing an unmatched mix of product innovation and industry insight together, the show fosters a tremendous understanding of where the industry is now, and more importantly what we can expect to see in the future. The retail experience today, probably more so than ever, is evolving in the face of generational shifts and technological advancement. It appears that while retail is still all about the customer, it’s up to designers to keep abreast, and keep ahead of what’s trending, what’s important, and what’s the next big thing that will keep the customer in the store and their carts filling up.

Looking for more insight on the market? Check you Jump’s take on the 2012 Interior Retail Design Conference on the shopping habits of the millennial generation.