Culture, Authenticity Matter to New Consumer

NEWPORT BEACH, CA-A “massive cultural shift through the US that will not happen again in our lifetime” is how Shaheen Sadeghi, president of Lab Holdings, described the way the retail arena has changed since the end of World War II. Sadeghi joined four other experts in a panel moderated by Irwin Miller, firmwide retail practice area leader at Gensler, titled “Retail New Experiences for New Consumers” here yesterday.

Describing the evolution of how food, for example, has been marketed to consumers since the 1940s, Sadeghi moved from TV dinners to microwave ovens to fast-food restaurants to drive-throughs and then to better-quality quick-serve restaurants. “We have made a major shift to personalization, customization and not homogenization,” he said. “We are buying things for and with a purpose and consuming things that are important to us—we're not just buying stuff.”

Another major shift is the way consumers have come to want and expect goods and services to arrive faster than ever before. “People just don't want to wait,” said Herminio Llevat, CEO of Flippin' Pizza. “Everything keeps getting faster and faster.”

But the new trend of “fast casual” restaurants shows that while consumers want things fast, they also don't want to sacrifice quality. The need to provide both is evident in the restaurant business, Llevat said, where 60% of sales come from the drive-through and another 20% are from takeout purchases; only 20% of customers still want to eat in the dining room.

The experience of shopping is also important to consumers and is at the core of bricks-and-mortar stores, said Peter Moersch, VP leasing for the Irvine Co. “You need to create this or they might as well be buying online.” Making the experience as convenient, easy and enjoyable as possible are key to success, said David Cordes with Franchise Project Toyota.

Naturally, technology has changed consumers and the way they interact with the retail arena. The experts said consumers are more knowledgeable than ever about the products they want because of technology, so retailers need to keep on their toes, from providing useful—rather than merely entertaining—technology in stores to keeping abreast of the trends that impact their product—whether it's nutritional facts about the foods they are serving or political issues in the countries where their products are made.

In fact, consumers are better educated than ever, and they want to remain that way, Sadeghi said. His company's retail venues offer classes on subjects ranging from knitting to gardening and farming—part of a return to crafting that is emerging among consumers. “We're making things again.”

Company culture is also critical at the retail level. “What do you stand for?” is how Miller described it. But really standing for it and not just posturing is crucial, since today's savvy consumers can smell insincerity a mile away. “Authenticity is the key descriptor,” said Aaron Birney, senior associate in retail for Gensler. “We're having to integrate with the companies we're working with to see their culture.”

Culture, in fact, transcends age barriers at the retail level. Take, for example, Trader Joe's, which attracts shoppers from age 18 to age 80, Sadeghi pointed out. “And as mass culture breaks down, subcultures form and become very powerful.” Corporate America needs to understand these subcultures in order to be successful, he added.

However, understanding them can lead them to the “avalanche of data” about consumer preferences that is currently available, as Moersch called it. “You have to be careful in your use of technology to keep interacting with the people. Data is the support, not the lead.”