Pandemic Pushed Retailers, Brands to Test New Models, Says Report
The COVID-19 pandemic pushed retailers to experiment with new ways to engage with consumers shopping from home, said a Wednesday report from ICF Next on changing retail trends. Increased use of technology and personalization are now an expected part of consumer shopping, it said, and shopping experiences are increasingly blending physical and online retail experiences.
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A no-contact shopping concept at Men’s Wearhouse has customers use a tablet with a proprietary app to find clothing based on size, fit and style, said the report. Customers can add items to a virtual fitting room, which notifies a store employee to take the items to a reserved fitting room for customers who prefer limited interactions with store employees, without foregoing the in-store experience altogether.
The report cited Walmart’s livestreams on TikTok, where viewers can tap on their smartphone screen to learn more about featured products and complete purchases from within the social networking video platform. Ulta Beauty scaled its GLAMlab virtual try-on app experience to allow customers to experiment with makeup without having to visit a store.
“Retail-tainment” is a way to bring customers to stores, the report said, citing Dick’s Sporting Goods' “House of Sport” that opened this year, giving customers a chance to try before they buy in a recreation setting with a turf field, rock climbing wall, simulator golf bay, batting cage and track. That kind of differentiator brings people into the store in a fresh way, it said.
Some direct-to-consumer companies that started online are finding they need to extend their reach through brick-and-mortar locations. The report cited Harry’s Razors, which partnered with Target on a store-within-a-store concept that exposes new customers to the brand. Target is also working with Ulta Beauty, Apple, Disney and Levi Strauss on similar projects (see 2102250037).
Online spending grew 42% last year to $844 billion, said the report, citing Adobe figures, and growth continued into January and February, which had 34% year-on-year growth, it said. But 78% of consumers planned to shop more in-store after pandemic lockdowns and said they want to interact with store associates and products, it said, citing a ChaseDesign study.
Social, economic and environmental issues are increasingly important to consumers, ICF said. They observe values portrayed through digital tools and “want to see that marketed values are used genuinely rather than for profit.” About 60% of survey respondents 18-34 have started or stopped using a new brand because of a company's response to racial injustice, it said.
Brands that want to grow their most loyal customer base “have to ensure their words and actions reflect the values and desires of that base,” said ICF. “When there are so many options to choose from, it’s impossible to appeal to everyone -- companies should let the values, reactions, and behaviors of their most dedicated customers drive innovation and engagement.”
Fifty-nine percent of respondents said they shop at secondhand stores for apparel. It cited Lululemon’s program to accept “like new” returns for resale at a discounted price so still-wearable, “new-to-someone-else” garments get used, extending the life of its products. Customers using the resale program receive Lululemon credit via an e-gift card when they send items by mail or visit a participating store.
Cross-industry partnerships are helping brands extend product value, said the report, citing eBay’s differentiator, an “authenticity guarantee” to help customers validate estimates for collectibles valued at over $100. Lego and Universal Music Group combined on a TikTok-like app kids can use to create their own music videos with Lego products using augmented reality. Fanatics, meanwhile, partnered with DoorDash, promoting food delivery on game days; fans who opted in to its emails received a 30% discount on the first delivery.