The retail market is evolving, and shopper behaviours and expectations are changing with it. As the Strategic Insights Lead for Retail at Google, analysing shifting consumer behaviours has become part of my daily routine. After two years of constant change and uncertainty, now feels like a good time to take a step back and think about where we’re heading this year and beyond.
Joining me are Cate Trotter, founder and head of trends at Insider Trends, and Seth Godin, marketing thought leader and entrepreneur. I spoke to them about the future of shopping, customer trust, and more during Google’s online summit, Path to Peak. I asked them some of my initial, burning questions.
Justine L’Estrange (JL): Cate, before the pandemic, you predicted that the role of the store would become more experiential and less transactional. Has this been the case?
Cate Trotter (CT): For some retailers, yes. But ultimately every retailer has to work out what’s right for them. That’s why, at Insider Trends, we ask our clients to think about what they would do if they had all digital channels at their disposal. Only once they’ve built that out, it makes sense to think about what that ecosystem can’t do. And those are the elements you want to put into your physical experiences.
There are plenty of things physical spaces are best at; touching, smelling, tasting — you can only do that in a physical space. In many cases, it’s still the best place for fulfilment or returns, and hard to beat when it comes to live streaming or community events.
Retailers need to realise that their job is not to make more stuff — instead, it’s to help people tap into that feeling of joy and connection to the brand
JL: We know that consumer behaviour has changed drastically in the last few years — Seth, how has this shifted the way retailers and marketers approach and engage with their audience?
Seth Godin (SG): The biggest shift in consumer behaviour was triggered by the mobile phone, causing a fundamental change in the way human beings are wired.
When we think about how people interact, we know they’re going to buy into the story that gives them joy, connection, and status in the digital space. Retailers need to realise that their job is not to make more stuff – instead, it's about bringing authentic stories to people and helping them tap into that feeling of connection to your brand. Retailers are perfectly positioned to do that. They’re all perfectly positioned to do that. They’ve got to get their head out of the warehouse and the square footage on the high street, and instead realise that customers want to be seen and connected.
JL: Seth, you've spoken about how marketers are trying to turn the internet into TV. What do you mean by this?
SG: When you think about the way marketers spend their time and money online, most of them are saying, “Look at me”. But the internet is about building connections. Effective marketers aren’t yelling at people, they’re giving their audience something to talk about.
Unfortunately, that idea is lost on retailers who try to be everything for their customers. Somebody will always be bigger or cheaper than you, so the only real alternative is to offer a specific experience based on status and affiliation that people will really want to tell others about. That’s where you build true connections.
JL: Gen Z is also top of mind for retailers. They've grown up in the digital world, but research shows they feel less impressed with the online retail experience. What role does social commerce have in engaging them?
CT: A big change we're seeing is that Gen Z is mostly interested in non traditional, digital experiences. 97% of Gen Z consumers use social media as their top source of shopping inspiration, so conversational and social commerce is particularly important for reaching this generation. But their experiences are also going to set the expectations of other generations. Retailers that are starting to experiment with selling in these new ways, will be able to expand it to other generations in the future.
A big change we're seeing is that Gen Z is mostly interested in non traditional, digital experiences
JL: A hot topic: What about immersive virtual reality? Is it the future?
CT: I don’t think it will solve everything in retail, but I think it holds so much potential and we’re only scratching the surface at this point. I think it’s exciting that brands can offer rich, immersive experiences cheaply, reliably, and at scale. And they can express their brands in a way they can’t in-store.
But, where brands are missing the trick is when they try to recreate physical retail experiences in virtual environments, while the first focus should be on engaging customers around the core of their brand essence.
Thinking about the future of shopping, I envisage retail to be embedded into every part of the world around us. From the customer's point of view the retail experience will be all about engagement, discovery, education, and inspiration.