Two Retail Worlds, One Consumer

June 2nd, 2014 by Jennifer Smart

A few weeks ago this essay was published on D Magazine’s Real Estate Daily Blog but you can read Mike Ablon’s full essay on navigating the new retail landscape right here.

There are two worlds for the new, Internet-age consumer to choose from: the reality of the physically present stick-and-brick retail establishment, and the new, virtual store that is the Internet. The maturity of the Internet age has brought with it a renewed effort to qualify and quantify consumer buying habits, in the hopes that they might be easily grouped into predictable patterns. We find ourselves attempting to determine what will become the dominant driver of consumer pattern language in this new arena, at the same time as we wonder how the new consumer will choose where to shop.

Generation Connected, or Gen C (for those of you who are not), is a diverse group whose membership is determined by a shared lifestyle, as opposed to typical generational definers such as age. Gen C includes a collection of Baby Boomers, Gen Xers, Millennials, etc., and might most simplistically be described as a group of people who have altered their lifestyle based on the facility offered by mobile and fixed technology, as it is integrated into each of their daily functions.

For Gen C, technology transcends simple facilitation and becomes a driver, predictor, and influencer of behavior; Gen C not only lives on the Internet, it also lives in the Internet.

There are two dominant influences acting on the new pattern language of Gen C: the distinction between permanent and temporary—not whether the product is durable or perishable, but whether the consumer believes that their consumption buying pattern will be temporary or permanent in that specific format; and, secondly, the transition from a consumer economy to an experience economy.

The parsing between permanent versus temporary reflects human nature’s innate need to establish pattern languages in order to function within our inexorably changing and convoluted society. This creation of consistent and repetitive action is natural and necessary, but must function in conjunction with the imperative need to adapt in an endlessly evolving society.

Consumers behave differently, depending on whether they believe an action of consumption signals a new and more permanent pattern language or is merely a transitory event. Therefore, a new action perceived as permanent leads to a characteristically different change in spending, while one viewed not as permanent is largely viewed as a dalliance.

This occurs in an equally random manner in both retail environments. Therefore, a method of purchase perceived as permanent (in terms of pattern language) leads to a requisite change in spending, while one viewed as temporal is largely viewed as fun but insignificant in driving permanent change. (It is necessary to assert here that nothing is permanent, and that permanent in this context is just an assertion of a longer temporary status).

Moving Toward an Experience Economy

The Experience Quotient is the second driver determining the consumption patterns in this evolution of Gen C, as it undergoes a move from a consumer-driven culture to an experience-driven culture and, therefore, an experience economy. To date, the most conventional thinking has been that what is best consumed on the Internet is based upon “commodity.”

A commodity, for example, a book, is the same in the store as it is online; and when this, or another product, comes in a “box,” no matter where one buys it, what is in the box remains the same. The product is therefore “commoditized,” and the purchase simply comes down to price and timing. Although that may be the case, one cannot ignore the proliferation of experience shopping on the Internet, as well as Gen C’s need for an in-person, emotional experience, which must be supported either in pre-advocacy, the advertising phase, or at the actual point of purchase.

Gen C cannot be naively oversimplified without understanding these more powerful influences driving the decision matrix. Retail consumption in the next cycle, whether consumer or experience in nature, will walk the uneasy tension caused by the fact that retail lives in two parallel universes at the same time, both of which are constantly evolving.

Although the rise of the Internet as the future medium of retail would seem to be a foregone conclusion, things are complicated by the Gen C consumer’s desire for real-time experience and the real or perceived permanence of stick-and-brick retail. Sorting through the value proposition of the online vs. stick-and-brick experience is complex in a world where the nature of the Internet has extended individual exposure, created ubiquitous access, and massively accelerated the speed of life by compressing time.

Generation C is complex and ever-changing, making easy classification of consumer spending patterns impossible. As the 21st century moves forward, I believe we will continue to watch the evolution of consumer perception concerning temporary and permanent point of purchase options while we, Gen C, evaluate whether the Internet or stick-and-brick emporiums offer better experience value.

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