The ‘Experience Economy’ is here to stay.
The ‘Experience Economy’ is here to stay. At Viranda, we are seeing a rapidly changing world and the impact has never been greater than for retailers – particularly traditional bricks and mortar retailers.
While price, product and promotion all still play a role, the new driver that has consumers’ swayed is the emergence of the value placed in experience. The rise of experimentalism is largely down to major shifts in both technology, culture and society.
Technology has undoubtedly redefined the traditional definition and expression of what being a retailer means today. Viranda’s Senior Property Manager, Sara Sheldon says, “The pace of new technologies has retailers battling to keep up and understand how best to introduce these new tools into their offerings.”
The Internet of Things, Virtuality Reality, and more recently the popularisation of Augmented Reality (which allows you to visualise products in a real-world environment prior to purchase), coupled with back end data analytics and monitoring are meaning that digital retailers can offer shoppers a level of speed, accuracy, volume, personalisation and convenience that bricks and mortar retailers will increasingly struggle to match.
And while technology is shaping both the current and future retail landscape, emerging societal and cultural shifts are having just as significant, if not greater impact. A good example is conscious consumerism and minimalism outshining the old trends of materialism. Will minimalism just be the latest fad, or hype? Viranda believes not, because the evidence is overwhelming that people are buying less than ever before.
This reduced enthusiasm for goods, products and ‘stuff’ in general is being fuelled by a new sharing mentality, supported via technology. If all I need is a hole, why own a drill when technology can allow me to quickly locate someone with a drill that’s willing to let me use it?
A final shift that is having a major impact on people’s behaviour is the way in which status is now derived. No longer is a person’s status defined through the house, car or jewellery. Today’s ranking comes from the experiences you have and your ability to demonstrate that you live a unique and interesting life. Social status now comes from the latest update/post, or Instagram upload.
This rise of emphasis on experimentalism is shifting people’s time, attention and resources away from the acquisition of things, and more towards this new pursuit of experiences.
If all of this is sounding bleak for retailers’, all is not lost! “Learnings from digital platforms can be taken and replicated in to suit your environment, and an understanding of the value of experimentalism allows you to build promotions, store layouts, marketing campaigns and other business aspects to reflect this.” Sara says. While finally intimacy, and human touch not so easily (yet) replicated digital channels will always have strong appeal.
What’s the key takeout for retailers? It’s not so much a matter of fighting, or keeping up – rather it’s about knowing and understanding the technologies that can help strengthen your position in a time of flux.