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11.28.2007

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UNDERSTANDING THE CONSUMER REDEFINTION OF QUALITY

Quality is undergoing a makeover. Premium Experiences: Understanding the Consumer Redefinition of Quality focuses on documenting how consumers define premium products.

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For more Hartman Group articles on RETAIL EXPERIENCE, click here...

10.31.2007 "Ghostly Tale of Food Retail"

07.12.2007 "6 (Tough) Tips for Food Retailers"

03.21.2007 "Near Miss Retail Opportunities"

02.07.2007 "Shopper Cards: Popular, Yes...But Special?"

11.15.2006 "Simplicity at Retail"

07.19.2006 "The Role of the Exit Experience"

10.27.2005 "Retail Experience on the Front Lines"

08.25.2005 "Costco vs. Wal-Mart: Getting Beyond Utility"

05.19.2005 "The Myth of One-Stop Shopping"

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Reimagining Retail: A New Model of Shopping

In recent years, retailers have been trying to come to grips with consumers’ declining interest in shopping. One doesn’t have to look too deep, however, for reasons why shoppers might be less than enthusiastic with shopping: cluttered stores, confusing or irrelevant product assortment and sets, uninspiring cookie-cutter chain-store formats and so on and so on.

Retailing in the 21st century has become so wrapped up in its own world that it has quite literally lost significance with consumers. Today’s retail landscape is a picture of complexity, congestion and consolidation. It is a story about tired legacy retailers struggling to fit in with consumers. While its marketers and analysts assess problems, analyze mountains of sophisticated data and make well-thought-out business decisions, they still cannot seem to close the relevancy gap that exists between their retail environments and consumers’ changing and evolving lifestyles.

Historically, The Hartman Group has been immersed in consumer culture; we know that retail is an important aspect of consumers’ lifestyles. The unprecedented success of our Tinderbox group, launched in 2006, in helping CPG companies revitalize their brands piqued our interest in creating a new group focused solely on the World of Retailing. With retailers poised at a strategic crossroads and building from our platform of strength in consumer insights, The Hartman Group is announcing the launch of our newest group, RetailIntel. RetailIntel’s mission is to foster new ways of thinking about retail for creative insights and transformative innovation.

In this exclusive HartBeat video, Hartman Group Founder, Chairman and CEO, Harvey Hartman shares his thoughts on reimagining retail and the launch of RetailIntel.

Run-time: 1 minute, 36 seconds

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Culturally, the marketplace has changed in many ways; consumers are dramatically changing the way they shop, they are redefining not just the meaning of quality, but lifestyle itself is undergoing a significant transformation. These shifts in consumer behavior require a fundamental departure from past notions of what retail is and how it is thought of. As RetailIntel prepares to set sail, we offer the following insights about the state of retailing today.

Retail should not just be a place for “good enough”

Occasionally, it is possible for a consumer to have a truly positive shopping experience. In this instance, the buyer and seller, face to face (or otherwise) align effortlessly in fulfilling a desire. The buyer leaves the retail space—real or virtual—truly satisfied, with the right item, feeling that they’ve made an informed decision that they feel good about. Most shopping experiences, however, end more along the lines not of “satisfy” but “satisfice” (the latter a technical term meaning that the purchase decision has been arrived at because it is “good enough” rather than “optimal”). It’s often invoked when a shopper grows tired of trying to make a decision: “It’s good enough; this store is loud and crowded, and it’s been a long day, so I’m out of here.” In our opinion, this “satisficing” happens far too often, and we think that retailers can do better.

It’s not just at-the-shelf

While important things happen at the point-of-sale, there is a vast world beyond that point. The Hartman Group has studied that “world beyond,” as well as at the point-of-sale, for years. Our collective research continually reinforces the notion that “retail” is not just a space where things are sold or, rather, that retail has fingers that extend into numerous aspects of consumers’ lives. These “other parts of life” have immense impact on what gets sold in the retail space. But only a few retailers have internalized this notion to the point that their stores reflect it.

While the idea of “lifestyle marketing” has been around for a long time, it’s not in evidence in the vast majority of retail spaces. Retailers get locked into the limiting universe of traditional practices, such as category management and slotting fees in the grocery channel and loyalty “rewards” marketing in all retail channels. These and other constraints divert their eyes from the consumer, and keep them focused on the shelf and little else. Again, we think retailers can do better.

Six blind men and the elephant

There are quite a number of companies that specialize in various aspects of retail operations, management, logistics, assessment, data collection, strategy and consultancy. For instance, there are those that perform something reminiscent of time-and-motion studies, tracking consumers’ movements through stores, counting “eyeballs” and “engagements.” There are other companies that move into the broader world beyond the retail space, tracking what media and advertisements consumers are exposed to, and measuring those consumers with demographics. While many of these companies do great work, we see limits to what they can tell us.

It’s like the old (East) Indian story about the six blind men trying to describe the elephant. Each man can describe a part of the elephant, but their descriptions don’t come together as a whole. They produce a series of six observations (the man who grabs the trunk pronounces, “The elephant is very like a snake!”) that ultimately aren’t particularly descriptive of what the elephant really is. This is why we not only place a great deal of emphasis on understanding the connections between what happens outside the store (i.e., the lives of consumer) and what happens in the store, but we are equally focused on understanding the dynamics of these two as individual elements.

Reimagining retail

How can retailers do better? While we have some solid ideas, which will be articulated through a RetailIntel pilot study over the next several months, fundamentally we must move from a mindset focused on just “retail” to talking more about “shopping” because that is what consumers are engaged in.

We think of shopping as a process, which in some cases can extend out for months between the time of the first interest in a product and its purchase. We begin with the goal of describing the shopping process—in its entirety—to illuminate points of opportunity within it for various types and categories of goods. We seek to “align the stars” for consumers by understanding how lifestyle, knowledge-gathering, decision processes and other parts of the shopping experience fit together. Armed with this acquired knowledge we can help retailers convert that understanding into increased customer satisfaction. In simple terms, by helping retailers understand how shopping comes together for consumers, we make it “all come together” for them, which in turn makes decisions easier and more intuitive and, in transcending traditional categories, giving them relevant choices they did not know they had.

RetailIntel will be refining a language for understanding and discussing shopping to include retail in ALL of its forms, be it apparel, grocery, restaurants, consumer electronics, etc. We're doing this by using a master framework and several sub-frames that are applied and studied uniformly across retail categories. While the measures within these frames will vary highly (e.g., shopping for bar soap and shopping for a new car are vastly different propositions), those measures thus provide for a high level of cross-comparability and measurement, and, importantly, show us where to pay the most attention to specific measures (e.g., in some types of shopping the most salient measure may be pre-retail product information, whereas in other cases it may be at-retail product information). Drawing all of this together, a clearer vision of retail will emerge.

If you are interested in learning more about RetailIntel please contact us.

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