There is an alien creature that has arrived in our midst, with habits that would be completely unrecognizable to previous generations. And yet they are beginning to re-shape the landscape – tearing down old institutions and building up entirely new ones. I’m referring to the Future Shopper. And they live among us. (In fact, you may even be one.)
As I wrote in last week’s column “we are living in an early beta version of what’s to come.” And naturally shoppers reflect that reality. Not so very long ago, shopping was an event. People went shopping. My grandmother (and even my mother) would go to town to go shopping. Now, for the Future Shopper, retail is ever-present. It’s a constant companion (and temptation) in the palms of their hands, 24 hours a day. Shoppers summon and the stores come running.
“Always-on” mobile-enabled shopping is just one aspect of change. Anne Zybowski, Vice President Retail Insights for Kantar Retail, presented many more revealing facts about the “Future Shopper” at the Intel Futurecasting Summit in Portland Oregon recently. (Anne’s observations were based in part on Kantar Retail’s ShopperScape® study of 4,000 US households on a monthly basis. And while it’s naturally US-centric, the harbingers of change show up first in the world’s largest consumer economy.)
- What they buy is always changing. By 2020, Kantar’s economists estimate, every American household will spend $3 on services for every $1 on goods. Many of those services will form part of “the sharing economy,” or be experiences (e.g. travel) that shoppers increasingly favor over physical “stuff.”
- How they shop is changing. Nearly 1 in 5 US households are now Amazon Prime members, a number that has almost doubled from 11.2 million to 21.5 million in just two years. What’s Prime? It’s a service for which you pay $99 per year, in order to get free two-day shipping on a huge amount of goods. (Customers also receive a host of other benefits, like free video-streaming and access to Kindle books, but it’s the free shipping that is the key trigger for joining.) Over time, Kantar’s research says, Prime becomes more indispensable. 49 percent of Prime members tend to check Amazon before shopping anywhere else. (I’ve noticed that trend in my own shopping habits. Just click and it comes. It’s so easy.) At the same time Amazon is attracting Prime members like filings to a magnet, the US shopper’s core store set is shrinking. The average number of retailers in a shopper’s portfolio has shrunk from 12.4 in 2007 to 10.7 today, and the core set (the absolute go-to stores) has contracted from 5.8 to 5.0. More and more, Amazon is at the center along with their traditional counterparts. Amongst Prime members, 30 percent say they “shop some retail stores less often.”
- Why they spend is changing. As retailers know only too well, it’s becoming harder to persuade shoppers to part with their cash. Kantar’s view is shoppers are actively limiting spending and their shopping behaviors, and customers want to “spend about the same but get a lot more for it.” That’s easier to do when information is transparent and accessible via a mobile device. The “value equation” is not just about “price” anymore, however. “Convenience is king,” along with immediacy, says Zybowski. And “just because the store is there doesn’t mean it wins on convenience.” (Frightening thought for brick and mortar retailers.)
So a pattern is emerging that will result in a fully-fledged Future Shopper: one who aims to conserve cash at all costs; spends on services rather than goods; deals online with a preferred partner because it’s easier; reduces their store set to the bare minimum; and demands convenience and immediacy. Tough customers? Absolutely. But for those (like Amazon) who have recognized where shoppers are heading, the future is absolutely bright.
(Photo credit: allstonpudding.com)