“We've seen tremendous resilience from the consumer and that's driving a lot of success for retailers in the brick-and-mortar space,” Ethan Chernofsky, senior vice president of marketing at Placer.ai, said during our virtual summit. Despite rising inflation and pullbacks on discretionary spending, consumers are still eager to treat themselves and participate in unique retail experiences.
Here are three trends influencing shopping behavior for the rest of the year, and how retailers can capitalize on them.
“The consumer is looking to orient themselves toward value, and maybe push off heavier costs,” Chernofsky said, adding that consumers are increasingly shopping at discount stores and trading down amid economic headwinds.
For example, consumers across a wider range of incomes, including high-earners, are spending more at Dollar General, said CEO Todd Vasos during the company’s Q4 2023 earnings call. In addition, a third of shoppers have switched grocery retailers to save money, per a February 2024 report by Advantage Solutions.
“But there's also an element there where [consumers] are looking to treat themselves. We call this affordable luxury,” said Chernofsky. These include coffees, movie tickets, and even beauty products that can be an instant mood-booster.
The opportunity: With higher-than-expected inflation in Q1 2024, consumers may continue to be cost-conscious. Retailers should emphasize value in marketing messaging and double down on loyalty programs that are easy to use.
“The idea that a store provides more than simply a place to make purchases is enormous,” said Chernofsky. It forces brands to rethink how they establish their physical footprint, maximize its value, and deliver experiences that align with business goals, he said.
Retailers can tailor their experiences based on the unique audiences of individual stores. Last November, for instance, Lowe’s expanded on its nationwide DIY-U program to offer home repair workshops targeted to new millennial homebuyers looking to save money on patching drywall or replacing a faucet. Other Lowe’s locations provide more family-oriented DIY-U events.
It’s this understanding that even if your brand has multiple brick-and-mortars, it doesn’t need to be seen as a homogenous entity, Chernofsky said. Enhancing that in-store experience will draw more engaged visits, and capture shoppers not only when they’re in discovery mode but also close to the point-of-sale. That will boost your in-store ad opportunities, too.
The opportunity: Retailers should prioritize building relationships with their customers through in-person programming. This gives shoppers the chance to demo products and interact with store experts.
“Pop-ups are a powerful win-win-win,” said Chernofsky. The retailer gains exposure, the ability to engage with customers, and insights into a possible permanent location. Malls benefit from increased foot traffic, sometimes even after the pop-up ends. And it’s fun for consumers.
For example, last month, Bloomingdale’s launched a series of camp-themed pop-ups, which curated a summery product selection of swimsuits, outdoor equipment, and more. One New York City location included activities including a Crocs customization station and embroidery bar.
The opportunity: Use key seasonal moments, such as back to school or wedding season, as a jumping-off point for a pop-up. Use the pop-up to learn more about your customers and what they want.
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