Luxury goods chain Barneys, which has been in business since 1923, will close all of its stores including its flagship Manhattan store if it can’t find a buyer by tomorrow, October 24th.
CEO Daniella Vitale is on record stating that, “Like many in our industry, Barneys New York’s financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand.”
Bullshit. Retail as we know it is dead and no, us Millennials didn’t kill it.
October 2016, I remember it being a muggy fall morning in High Point, North Carolina. I was in transit from my former start-up’s trade show booth at High Point Market to a shoddy conference room where I wanted to attend a seminar on digital best practices for growing furniture based businesses.
Everyone else in attendance looked as if they could have been my Mother or Grandfather, and the speaker only shared very granule baseline statistics and conjectures with the audience. From having a Google Business Page to making sure you share content consistency on Facebook, these strategies were not going to exponentially grow the businesses of the attendees; regardless if they thought so or not.
The truth is, the “Retail Apocalypse” is merely a scapegoat for the following: Shopping behavior of the 21st Century Consumer has radically changed from the 20th Century Shopper and will only continue to do so.
Here are the facts:
- The amount of time that people shop has fallen nearly 20% since the 1960s and the “Golden Era” of advertising.
- Today, people spend nearly 50% of their day being spent in front of a screen; something that was nonexistent in the 1960s.
- The amount of time people spend online has more than doubled since 2008. The way we go online has also shifted from a desktop to mobile device focus since then.
- To make matters more interesting is that the little thing in our pocket that we call a cellphone receives close to 50 notifications a day.
Technology has not only reshaped our society, but it is reshaping media, retail and how we behave and interact with both.
Since 2008, social media has become a prevalent force in our day-to-day lives. At its core social media is a catalyst for inspiration and discovery; regardless if we’re looking for new sneakers or memes.
Getting a message through to customers, and not just in front of their eyes for a split second before being fed to the trash can takes some radical rethinking in today’s marketplace.
What will ultimately save some retailers through all this noise is that us Millennials have FOMO big time.
69% of Millennials admit to experiencing Fear of Missing Out and their spending patterns reflect a shift away from goods and services to events and experiences (Shout-out to McKinsey on the cool statistic).
In fact, this fear doesn’t just plague Millennials, McKinsey has also found that “experience spending” across all generations has increased significantly. Money spent on live events from the US consumer has jumped 70% over the past 30 years.
Ok, what does this all mean for retail?
Experiential marketing and strategies that disrupt your respective market niche need to be in your playbook for 2020 and onward.
The best companies on earth are already implementing this by creating a uniform customer experience.
Think Apple. You go into Apple, and you are immersed into an experience that is a technological playground paired with excellent levels of customer service from all those Blue shirts running around asking how they can help you. You have droves of people WAITING for new product launches once they are notified on Instagram. The Apple experience is uniform from their physical retail fronts to even ordering product online after the fact. Apple’s physical retail presence focuses on effectively communicating and engaging the consumer; not necessarily selling to them. New retail is building brand loyalty and customer trust, not just getting 20% off.
The right product, in the right place, at the right price is no longer relevant in today’s retail landscape.
Retailers must reach consumers where changing behaviors lead new channels and new experiences that drive new insight into consumer behaviors, preferences and expectations.
If you wish to better understand your customer in today’s retail world, feel free to further contact us, as we exist to break through the noise in your market.