Retail Insider and K3 Retail bring you a monthly column taking a look at some of the most pertinent and interesting topics of the day in the big wide world of retail.
Retailers must answer the ‘why buy?’ question
Retail is not only undergoing a digital revolution – with sales moving from physical stores to online channels – but is also dealing with the early signs of a generational shift in consumption, which is undoubtedly fuelled by digital.
We are seeing a move away from the collecting mentality of older consumers who place a value around accumulating physical goods. Instead younger people are looking more for satisfaction from experiences. This goes hand-in-hand with the desire for greater mobility that is enhanced by having fewer physical accoutrements –aka baggage.
This new thinking is manifesting itself in myriad ways. Having easy, cost effective, access to the likes of taxi service Uber combined with the growing number of car-sharing schemes is negating the need for individual car ownership.
This effective sharing of assets has led to the rise of businesses like Rent the Runway whereby clothing is rented out to shoppers for one-time usage before being returned, cleaned and made available for the next customer. For higher value items the question arises of why buy?
The increase in house rentals is undoubtedly a result of disposable income constraints among young people and higher property prices but a general reduced desire for ownership – and hence limitations on mobility – is also at play.
If this is the reality for just a modest number of individuals then the ramifications for retailers will be sizeable. A large number of categories will be adversely affected by such a shift in the mentality of consumption. What will be the effect on home-wares, high-end clothing, and cars etcetera?
We are not painting a potential doomsday scenario but retailers must at least acknowledge that such broad market changes are taking place as they look flex their models to take into account basic digital trends and re-engineer their stores to create a greater experience.
Glynn Davis, editor, Retail Insider
K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.