Article

GlobalShop 2012: Consumers have a 'need for speed'

Retailers must be fast, flexible and mobile to succeed.

February 29, 2012

"The slower you move, the faster you die," is a line George Clooney uttered in the movie, "Up in the Air," but David Bosshart applied it to the retail industry Wednesday during his keynote presentation at Global Shop at the Sands Expo Convention Center in Las Vegas.

Bosshart, CEO of Gottlieb Duttweiler Institute, a research firm in Switzerland, told retailers those who were willing to listen to customers' needs and adapt to them quickly and creatively will succeed. The rest will fail.

"Winners will be those who can put creativity over money, so hyper-creativity will win in a hyper-speed world," he said.

The key is no longer about how much money people will spend, but about how well they spend, according to Bosshart, who pointed out that as buying channels increase it's harder for retailers to compete solely on price. Therefore, relationship building is important.

"Spending well means they're becoming more relationship oriented, so you can build up relations, the most precious asset, he said. "People who have strong relations, of course, become more loyal, and you know how much it costs to acquire new customers. So building relationships by being creative is very important."

Consumer behavior trends that affect relationship building

Retailers must be mobile, creative, flexible and fast paced to develop a loyal following from customers, Bosshart said.

H&M and Zara, known as "fast retailers," have literally changed the fashion retail industry by playing on consumers' need for instant gratification. Those lower-end retailers have even forced luxury lines like Prada to make its collections available more quickly. Customers not only expect new collections to have fast turnarounds, but they also expect discounts. Instant gratification is also showing up in children who no longer want to make Christmas lists and wait six weeks for their presents.

"These days what they see on the screen is 'I see it now, I want it now, and of course with a discount,'" he said. "People now take it for granted even before Christmas that they get a discount...new collections they expect a discount. I think that's amazing and very dangerous for the retail business if you go further and further into instant gratification."

Besides instant gratification, other behavior trends that retailers must understand are:

Decision fatigue, the stress created from giving customers too many choices that ultimately leads them to leave without buying. It may be best to offer them fewer choices.

Speed greed, the consumer's unwillingness to wait in line. Research shows that shoppers used to wait in line for 10 minutes before becoming agitated and leaving. That's now down to 5 minutes, Bosshart said.

And the stickiness factor is how customers overestimate their use of technology, specifically applications for their phones Most consumers say they download and use a plethora of apps when in reality, Bosshart said, they really only use their smartphones for games, weather, maps, music, social networking and news.

"If you are working with applications you must make it as simple as possible, as good as possible, otherwise people will not use it." he said.

Read more about consumer behavior.