There is an inescapable power shift taking place in retail and it’s affecting every corner of the landscape.
By the time a consumer enters a store, there’s a good chance he knows more about the product he wants than the sales person peddling it.
Many consumers are "showrooming," visiting a store only to touch and feel a product they plan to purchase online for the cheapest price, delivered the very same day. All things being equal, why wouldn’t he choose the digital option? There's less friction in the experience.
This fundamental change in consumer behavior is causing some retailers to rethink their business model.
“The role of the retail brand is different than it ever has been before because it’s competing with itself in multiple channels,” said Michael Goldberg, CEO of Zimmerman Advertising. “Some would parallel a retail brand to that of the network of a television show. I know the program I want; I know the distribution source I want to get it from; I’m not sure if it’s on Bravo or A&E. I’m just not sure anymore.”
The changing power dynamic in favor of the consumer is not going away, according to Mr. Goldberg. In fact, it will increase exponentially over the next 25 years, he said.
This installment of Marketer's Playbook explores how changing consumer behaviors are forcing some retailers to embrace the theater of retail.
Laith Murad, CMO of Pirch, says the sterile nature of a digital transaction is creating an opportunity for experiential-minded retailers.
At Pirch, customers can cook a full meal with the help of a gourmet chef, take a shower in their sauna or run a load of dirty clothes through a washer and dryer.
“People don’t realize the emotional element in retail is so strong that people actually gravitate to different products or different brands because they feel compelled to,” Mr. Murad said. “From quick-serve restaurants to some of the highest end retailers, everyone’s kind of returning to this theater that retail was originally intended.”