The times are changing, says Retail X founder and retail strategy director Juanita Neville-Te Rito. But are retailers changing with them?
Bricks and mortar retailing is seeing a resurgence internationally. PwC’s Global Insights Survey 2018 records that in the past three years, there have been increases in weekly bricks and mortar shopping from 40 percent in 2015 to 44 percent in 2018.
However, locally I am concerned that we aren’t going to sustain this global story. One of my most key concerns is our retail leadership focus and connecting specifically with the changing face of the New Zealand shopper.
Worldlier, connected, and with many more alternatives, the tapestry of people, ages, cultures, attitudes and behaviours that make up New Zealand has changed and continues to change. Smaller homes, different payment options, sustainability concerns, a push back on “disposable product and daily grocery top-ups are but the tip of the iceberg. Yet we have a dearth of both boards and senior management teams that “get” this change in the retail sector – as they aren’t seeing or experiencing the changes themselves.
International figures suggest that 70 to 80 percent of consumer purchasing is controlled by women. In the US and UK, we are already seeing changes in language from share of wallet to share of purse.
To hone in on market specifics, let’s use Auckland as an example as there are wild changes which should be affecting the retail offer. Fresh Focus discovered some compelling insights in their Changing face of Auckland research findings last year:
- Auckland is growing by more than 700 people every single week.
- Four in 10 Aucklanders were not born in New Zealand and the city has the youngest population with around two thirds aged under 40.
- Millennials are the rising demographic force of Auckland. Most Millennials now access video content through the internet and rely on Instagram and Snapchat for social media.
- The daily commute defines the weekday, with many Aucklanders spending more than 30 minutess commuting each way. This is twice as much time as non-Aucklanders.
- New Zealand-born shoppers typically do the grocery shop alone, while non-Kiwi-born prefer to shop together.
- Non-New Zealand-born shoppers are significantly more likely to gather at community events, church and shop for fresh food on the weekend.
What this means for retail boards and senior management teams is that often, shoppers look nothing like them. At all.
Some recent examples I have experienced either personally or from discussions with frustrated management teams demonstrate that those in charge just don’t get it:
“What’s Matariki? It means nothing to me. It is just something made up and it doesn’t mean anything to my customers.” (Big box national retailer)
“My shoppers are just middle New Zealand women. They don’t have time for Instagram. They are too busy and wouldn’t bother with those micro-influencers. Why can’t we just get Nadia Lim or Valerie Adams involved in a TV ad? Or Richie McCaw’s wife?”
“No one will travel to a store that just sells [my product] at discount prices. This opening will only affect the stores close by.”
“No one goes shopping on Boxing Day in our area.” (Christchurch)
“People say they will pay more for eco products but they don’t. They just want to sound like they are good people.”
“Just get the young girl on reception to do our Facebook page. She is always on her phone and knows that stuff.” (for a product aimed at middle-aged women)
“WePay. We aren’t going to bother with that nonsense. The Asian customers can just pay cash if they don’t have Eftpos.”
If the variances in age and cultural band are shifting, and women are more involved in all the major decisions in a household, decision-makers need to get their finger on the pulse in a very real way. At its worst, we have mid 65-plus-year-old retired white men whose wives have never worked, sitting on retail boards, playing golf all Saturday and making decisions without appreciating the changes in society. Their benchmarks relate to the people and conversations they have. And let’s be frank, what are they hearing in their interactions over a BBQ at Omaha?
Just because you don’t see it doesn’t mean it doesn’t exist. Their marketers are seeing it, but when they present the reasons for proposed changes in marketing and communications, these insights are being shut down.
Comfortable (and change resistant) franchisees are another segment who are living in the past. They are only attracting the same customer they always did as they are only communicating that way. And those customers are decreasing or dying.
Now we all know there are exceptions to this rule – but simply not enough. Tunnel-vision of “shoppers like me and what I know” still permeates decision-making right across the country.
How do you make sure you don’t fall down this slippery slope of not seeing the new wood for the trees you know and are familiar with?
- Insights and research – you need to know who is your market and who could be your market:
- What is unique and different about their attitudes and behaviours?
- What is “their language” and how do you connect with it? (Peeps, you might not get cred just because you think you are lit IRL. LOL!)
- Authenticity – you must be genuine and authentic in tone and intent.
- Today you have nowhere to hide. Say what you do and do what you say.
- Transparency – saying “Thanks” and ‘I got it wrong”, “I’m sorry” goes a long way.
- Storytelling – Content is not advertising. It is entertaining and engaging.
- BTW, you can’t make a video go viral. Just saying. Even with a cat in it.
- Show versus tell – visual storytelling is king.
- Tailor interactions – it’s no longer a one size fits all. Your front line needs training to help them identify and serve different needs.
- Women react more strongly than men to personal interaction with shop assistants.
- Women are gatherers. Men are hunters. Women walk into a store and scan. Men look for a specific location.
- Most Millennials follow brands on at least one social media platform. They are highly driven by price and say they follow brands on social media to get discounts.
- Behaviours – you must adapt what you do to attract different audience opportunities.
- The cashless lifestyle is now becoming a reality in China thanks to the likes of WeChat and Alibaba. As such WePay and Alipay are booming. A huge opportunity to connect with migrants, students and the tourist markets exist using WeChat.
- Sustainability concerns means customers want to reduce the amount of packaging and bags they get when they purchase items. And they want to know what you are doing as your “bit for the environment or better world.”
This is the retail new normal. It’s actually very exciting but it does require some old dogs to learn some new tricks (or at least appreciate the new tricks.)
This story originally appeared in NZ Retail magazine issue 756 June/July 2018