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Retail and the ‘Experience Economy’: are you ready for 2020?

Retail and the ‘Experience Economy’: are you ready for 2020?

Blog by Amy Morgans of ReactCX

With a quarter of the population now made up of millennials, we’re seeing a fundamental and undeniable shift in consumer expectations on the UK’s high street.

Studies show that millennials don’t want to part with their cash for mere “things” like their parents do; their preference is to spend their hard-earned cash on something less tangible. They are looking for the experiential, a preference bolstered by social media culture, where it’s more socially acceptable to brag about a week in the Maldives than a shiny Tag Heuer. 

Of course, that doesn’t mean that people will stop buying products – it just means that the experience of actually purchasing them is more important than ever.

The consequences of failing to innovate in line with these consumer expectations are hard to ignore; we’ve seen many former UK giants struggle to survive, or fold completely, in recent years, with Thomas Cook as the most recent example. Plus, with research from Forrester (2016) concluding that customer-obsessed brands can expect to be 4x more profitable, it’s a complete no-brainer for retailers to get experience-savvy.

Agility

Some of the more agile brands on the UK’s high street have capitalised on this shift in consumer priorities by upping their CX game and implementing creative strategies to win over their customers. 

A prime example is the handmade the handmade cosmetics brand Lush, where a combination of strong brand ethics, theatrical product demonstrations and personalised service has built them a loyal and fiercely passionate following. Sales assistants are trained to tailor their approach to individuals, intuitively knowing which customers are looking for an efficient, no-frills transaction and which ones have time to spare for genuine engagement and carefully considered recommendations. 

Authenticity is also key for Lush, with frontline staff being as enthusiastic and bought-in to the brand as any of its customers. Plus, the in-store environment (and subsequent product usage) is fabulously Instagram-worthy. #bathart indeed.

Another brand doing well is Oasis, thanks largely to their effective omnichannel strategy. Today’s consumers expect a frictionless transition between online and offline, and this is something that Oasis does very well – an example being the iPad-aided sales experience in their high street stores. It’s not enough to have an effective digital presence; it has to work symbiotically with bricks and mortar to ensure that every interaction with your brand is integrated and seamless.

It would be disingenuous to say that price and product don’t matter at all – brands such as Sports Direct and Ryanair are living proof of that, continuing to grow despite notoriously low standards of customer experience. However, the key distinction is this - unless you are the cheapest in your market, or have the monopoly, you need to be competing on CX. 

By taking steps to understand what customers really want and investing in innovations that really matter, retailers can convert their customers into brand advocates. It’s the surest way to succeed in 2020’s experience arms race.

Amy Morgans
Insight Manager
ReactCX, UK

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