The New Shopper Mindsetcentric mindset and evolve or risk becoming irrelevant. “Shoppers are becoming immune to traditional retail propositions like superbugs have become immune to antibiotics” says ChangeUp Partner Bill Chidley, “now stronger medicine isn’t adequate, we need a new way to make retail more relevant for them.”

ChangeUp has identified four significant changes in shopper behavior, chosen for the impact they have in driving new retail strategies. Together they represent a foundation for innovation and, ultimately, a retail renaissance that can benefit both retailers and shoppers. Continued on page 3

PHYSICAL RETAIL IS ALIVE AND WELL, IT JUST NEEDS A RELEVANCY MAKEOVER.

This year is on pace to have a record number of store closures, yet we see Amazon.com opening more stores and Target announcing a billion-dollar investment in their physical stores. This dichotomy signals a new age in retail strategy and design, driven by the changing ways shoppers choose how and where to shop.

Shoppers are changing faster than traditional stores have been able to keep up. Paradigms that guided an industry’s decisions for generations no longer deliver results. Retailers must embrace a shopper-

BRANDSDRIVINGCHANGE

TREEHOUSE: Reimagining Home

TreeHouse is a home improvement company focused on making homes thoughtful, sustainable and healthy through a “ let’s do it together” attitude. Offering a curated selection of products and services, the concept aims to bring a green conscience to home improvement. The retailer’s second location is scheduled to open in Dallas on June 1 and will be the nation’s fi rst ever net-zero energy store, meaning it will put energy back into the city’s grid.

The Retail landscape is always evolving, as is the technology that propels it into the future. Companies merge as others fi le for bankruptcy and it’s important to keep up with the ebb and fl ow of business. The reason one company excels is just as revealing as why another cannot survive; we have something to learn from each of them. Here are four companies we feel are doing unique things to raise the bar.

WORKBAR AT STAPLES: Delivering Value

Workbar has teamed up with Staples to open a new co-working space. Each location has 3000 square feet of custom-designed spaces offering fl ex offi ces, reservable conference rooms, free onsite parking and unlimited coffee—all inside Staples stores. With over 34% of the workforce in the US doing freelance work, this concept provides a professional workspace to millions who would otherwise conduct business at the local (and noisy) Starbucks.

BEAUTY & ESSEX: Upending the Status Quo

Part pawn shop, part lounge, part restaurant...Beauty & Essex has mastered the art of the unexpected with a unique approach to blending retail and restaurant. The overwhelming juxtaposition pushes the boundaries with dramatic elements, unique theming, and delightful, yet surprising, extras like free champagne in the restroom. The clubstaurant has consistently been ranked as one of the hottest spots for its food, service and ambiance.

THE BLACK TUX: Perfecting the Experience

For men, black tie events are often met with a heavy sigh. The thought of renting attire for such an occasion conjures up bad memories of the senior prom. Enter Black Tux—a modern suit and tuxedo rental, ordered online and delivered for free. Nordstrom took notice and carved out space within selected locations for the ecommerce retailer. Customers get expert advice and try on various options to fi nd the perfect fi t.

will enable ‘total basket savings’ propositions to occur in-store in real time. Retailer apps and smart store technology that can link the individual shopper with their past purchases and unique preferences to create tailored offers will be an expectation.

But innovative rewards will need to involve the experience overall. Retailers must integrate knowledge of their shopper’s lifestyle with what their brand stands for, and craft innovative rewards and experiences around a unique proposition. Lowe’s MyLowes program, which allows shoppers to keep track of past purchases online, is a great example of rewards being a service linked to the store experience and brand. The goal is getting shoppers to invest time, either in-store or online, so that switching stores feels like they are losing something.

4. SHOPPERS JUDGE EXPERIENCES ACROSS CATEGORIES AND CHANNELS

In a time when Alexa can summon an Uber car with your voice, every experience is evaluated against the easiest option. Retailers need to innovate stress-free ways for shoppers to buy. In brick and mortar retail, the mental stress to fi nd the items, physical stress to get to the item location, and the emotional stress of interacting with associates, are weighed against ordering online. Shopper Journey work seeks to uncover the pain-points and shopper work-arounds in the process, and enable the experience design to eliminate or minimize them.

Millennials in particular have moved from judging one store against another to seeing shopping through the same lens as dining out or traveling. “We often hear respondents in shop-along research bring up experiences like ordering pizza on their phones, wondering why pre-ordering deli items can’t be as easy” says Cornelius. Retailers need to broaden their perspective on making experiences easier in order to stay relevant and hold shopper’s interest.

Today, consumer confi dence is at a 15-year high, so shoppers are willing to spend and there is money to be made for retailers who adapt to changing shopper behavior and expectations. ChangeUp believes that there is growth waiting for retailers who acknowledge this and innovate in response. The relationship between store experience and shoppers is like a lock and key. The store is the key, and the more tuned in it is to the shopper, the more likely it will unlock their underlying wants and needs.

1. SHOPPERS USE STORES DIFFERENTLY

The path to purchase has shifted from predominantly in-store to predominantly digital. Webrooming—researching purchases online and making destination trips to stores for purchase—is the new normal. The role of the store is shifting from infl uencing purchases to validating the decisions made before arriving. This means that stores designed for browsing and impulse need to be reconfi gured for buying missions. Stack it high and watch it fl y no longer works.

Shoppers appreciate the key advantages of physical retail. Try it before you buy it affi rmation, combined with instant gratifi cation and easy returns are critical for higher ticket and fashion related goods. “Today retail merchandising needs a mindset change from persuade me to help me choose,” advises Jamie Cornelius, ChangeUp Creative Director. Shoppers on a mission don’t need to be cajoled and converted.

2. SHOPPERS SEE VALUE AS MORE THAN PRICE

Technology now makes it easy to fi nd the lowest price, so value becomes an equation: is the potential savings from hunting for the lowest price option worth more than my time? Time spent to research, drive farther, or for shipping is often as valuable as money. Retailers tend to focus on price as a primary benefi t, when shoppers are not necessarily seeking lowest, but low-enough prices. Shoppers need to believe that they aren’t being overcharged, so ultimately low price is an anxiety to be overcome, not a game to be won.

Price is always a trade-off. Dollar stores are not the lowest unit cost on most consumables, but smaller sizes enable the budget-driven to buy across more categories for their money. Knowing your shopper allows you to better deliver what is important to them, creating an opportunity to forge a relationship that goes beyond a transaction. Instead of relentlessly talking about low-prices, store design must connect emotionally, using messages and imagery that make your shopper feel understood, appreciated, and entertained.

3. SHOPPERS EXPECT TO BE REWARDED

Loyalty is elusive and open to the highest bidder. New buy-more-save-more strategies, like those from Jet.com and Kroger Fuel Points will drive retailers to rethink what it takes to retain shoppers. Embedding digital engagement into physical retail experiences

NEED TO KNOW

From Our PartnersThe ongoing conversation in retail today is how to create engaging experiences that inspire shoppers. At ChangeUp we develop innovative solutions for today’s unprecedented retail challenges, from working with startups to re-energizing existing concepts. We are passionate about having a consumer focus as we build brands and reinvent retail. As ChangeUp continues to grow, we are excited to announce the opening of a new office in Detroit. This addition will enable us to extend our service offering and provide our clients with the high level of service they expect and deserve. Always here and ready to talk - feel free to reach out to start a conversation.

BUILDING FUTURE FOCUSED BRANDS AND RETAIL EXPERIENCES

Contact Us1-844-804-7700retail@changeupinc.comchangeupinc.com

LEE CARPENTERPartner - CEO

LYNN GONSIORPartner

BILL CHIDLEYPartner

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AREAS OF EXPERTISECustomer Insights | Retail Experience Design | Brand Strategy | New Concept Innovation | Digital/UX Design

64% OF MILLENNIALS to place their order via self-service kiosks at restaurant

80 MILLIONnumber of Amazon

subscribers worldwide

DeipnosophistA person skilled in the art of dining and

dinner-table conversation

1 IN 4online shoppers shop online

at least once a week

Consumers who use their mobile devices while shopping in-store spend as much as 150% more

than consumers who don’t

IN-STORE VS. ONLINEThe ability to see, touch, feel and try out items is the

#1 reason for choosing to shop in-store vs. online

66%OF GEN Z SHOPPERS

prefer the in-store experience

OVER 6 MILLION US homes have purchased

an Amazon Echo

$21.2 BILLION is spent on Mother’s Day each year

and 70% of consumers purchase in-store