Here’s part 2 of my interview with Dave Cherry, Executive Advisor for Cherry Advisory and retail industry thought leader. Dave is a retail industry expert with over 25 years of experience with top companies such as LBrands, Polo Ralph Lauren, Easton Town Center, Journeys and more. Gain more insight into how he interprets the changes in consumer behavior due to COVID-19 in our first part of this series.
“It changed consumer behavior because it disrupted our normal patterns. If I went to Easton every Saturday, all of a sudden I couldn’t go because the stores weren’t open. We weren’t going to work in the office, we weren’t going out to parties, so we didn’t need to buy things for those events. It shifted what we value and early on, aside from groceries and other essentials, our only option was eCommerce.
Why do you think consumer behavior changed as a result of the COVID-19 pandemic?
It [consumer behavior] will continue to change. If you think about retail in the past 50+ years, everything started with the corner store, then we had department stores, then we had malls, then ecommerce, then mobile and now soon we’ll have the metaverse. Retail changes as society changes.
We also saw some changes in what consumers value. Experiences and time spent with family and friends became more valued. Some material possessions became less valued. But then when we could buy more, we had this concept of “revenge shopping” based on pent up demand.”
Do you think these changes will be permanent?
No I don’t think these changes will be permanent because they never are. As I just mentioned, we’ve seen the rise and fall of corner stores, department stores, malls, and countless big retail brand names. The continued evolution of ecommerce, mobile, social and the metaverse, ever increasing supply chain delivery speeds and capabilities and new innovations from brands we’ve never heard of will continue to drive change. And on top of that, as the bulk of spending power shifts from Boomers to Gen X to Millennials to Gen Z, retailers will see new priorities and desires that they’ll need to meet.”
You mentioned the metaverse. Do you think shopping in the metaverse is the next big thing for retail?
There are two forms of shopping in the metaverse. There’s shopping in the metaverse where I can go in a store and shop for an item and have the physical item delivered to me all while in a virtual world. The other aspect of shopping in the metaverse is digital only products. Gap recently released the classic Gap hoodie in the metaverse as an NFT (non-fungible token). It’s only digital, so you own that only in the digital world.
The metaverse is not going to be for everybody, but I think that we have to pay attention to the unique consumers. You can’t group consumers in generation because there are some Generation Z consumers who behave like Baby Boomers. You have to pay attention to the unique customer.”
Do you think the metaverse will be the final nail in the coffin for brick and mortar stores?
“Oh no, definitely not. Steve Dennis, who wrote a book named Remarkable Retail, said ‘retail isn’t dead, boring retail is dead’. For example, I’m a runner and I like to go to Road Runner Sports. I may pay a little more for a pair of shoes that I could get for cheaper on the web, but when I talk to the sales associate and they’re a runner, there’s a connection. I bought the shoe in three minutes but we had a 30-minute conversation because I just enjoy being there. There’s an experience that I gain that can’t be replicated online. Brick and mortar stores that don’t deliver a meaningful experience, or as Steve would say, are boring, will be in that coffin soon.
There are going to be consumers who don’t like the metaverse. The most important thing for brick and mortar stores is to make yourself interesting and exciting. The best customer experience is memorable, personal and leaves an impression.
Brick and mortar is here to stay, but it depends on how you use it.”
People have been more consciously spending throughout the pandemic; do you think this will change or continue?
“I do think that this will continue. Consumers don’t mind spending but want to do so with brands that match their values. That might mean meeting their primary desires around quality, service, value or convenience or alignment with social values. There will be lots of new entrants both into the retail landscape and the retail cemetery, but the ones that survive will be those that cultivate a deep customer relationship based on a foundation of experiences consistently exceeding expectations.”
Regarding changes in consumer behavior, what’s an important question I didn’t ask you?
“What’s the most important strategic advice that you’d give to a retailer to help them remain relevant and successful?
Pay close attention to your customers. Understand their primary drivers for engaging with you (and realize that those change often in and sometimes simultaneously depending on context) and get several steps ahead of them. Innovate in those spaces and wildly exceed their expectations. Experiment freely and often. Fulfill their needs before they even realize they are there. By significantly exceeding expectations with “surprise and delight”, the experience and satisfaction of your customers is increased exponentially.”
The past couple of years shifted our lives in many ways. Although the changes in consumer behavior due to COVID-19 may not be permanent, we should expect these changes to inform the future of the retail industry . Your defined customer personas from 2020 greatly differ from what they are now. Instead of targeting your customers the old way, learn more about your new customer persona with one of the many customer insight platforms on the market. Futurety built a SaaS platform, HUCKLE, last year that goes deeper than just demographics. The era of data-driven marketing and decision making is here, so learn more about your audience today!