Kearney Report Reveals Changing Consumer Preferences – WWD

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In the latest report from the Kearney Consumer Institute, researchers found that while shoppers want to have “experiences,” the notion of what makes an experience is ill-defined. At retail, is it pop-up shops? Or events and displays? Or is a retail experience connectivity between online and the physical store?

It could be all of that and more. And it could be more mundane. Either way, experiences are defined by the shopper. More importantly, when asked what they like to spend money on, consumers offered a list of things and experiences.

In the survey, respondents were asked to choose three categories of what they like to spend the most on. At 60 percent, clothes and shoes topped the list, followed by restaurants at 51 percent. Next came things, home improvement and electronics (36 and 35 percent, respectively). Also at 35 percent was an experience: travel. Makeup and beauty came in at 27 percent and were followed by experiences in gaming (22 percent), concerts and plays (12 percent) and sporting events (11 percent).

The report noted that experiences “can establish an emotional connection with consumers.” The experience of shopping helps consumers “feel seen and provides an outlet or escape” from the daily toils of life. The research found that 71 percent of those polled said shopping helps them relieve stress, while 69 percent found shopping to be a “fun activity” that is done with family or friends.

And 64 percent of respondents said shopping helps them “feel more confident and secure,” while 63 percent said shopping improved their mental health.

To better meet consumers’ demands, the report’s authors urged retailers and brands to redefine experience “by the consumer’s end goal, rather than by elements.” With that in mind, Kearney suggested looking at customer engagement from the perspective of the emotional (which includes customer service and connectivity), environmental (which includes ambience, store layout and merchandising) and transactional (which includes processes, queues and policies).

Given the complexity of all the elements involved, the report’s authors suggest that retailers and brands evaluate the trade-offs across all the elements. For example, the researchers said inventory on the floor, “such as apparel or beauty, can make the transaction faster but the environment less tidy.” Regional differences and expectations also need to be considered when creating an experience. For example, the waitstaff at restaurants in Europe step back from the diners to create a self-paced restaurant experience. In the U.S., waiters are proactive in their attention to the diners.

Other considerations include exploring ways to remove friction in processes and transactions, which can impact the entire experience. “Starbucks is expanding drive-thru locations and reconfiguring store counters to make pick-up more accessible,” the report noted. “It starts with an environmental change, but it improves transaction efficiency and provides optionality and engagement.”

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