Oser Communications Group

mass market breaking down, what becomes absolutely critical for the consumer, for the retailer and for the brands you offer is one of two things: a great experience – there's lots of different ways to think about experience. Or you have to have some incredible meaning and relationship to that consumer," he added. " The brand really has to stand for something." That provides renewed opportunities for independent retailers, who are in a better position to create meaning around their brands and to forge relationships and emotional connections to their customers. "One model that is going to flourish are the local stores, the local independent stores," he said. "People like to shop locally; they like to have a connection to the community. They actually also like to know that the people there are knowledgeable about what they're buying and what they're getting." Economic and Social Trends Shaping the Retail Landscape Dart predicts that most shopping malls are simply going to disappear f rom the landscape as consumers grow more and more bored with commoditized consumer goods with which they feel no particular personal connection, he said. "Stores are going to be fundamentally transformed – they need to be transformed," he said, pointing out that we call stores by a name that implies that their entire purpose is as a storage point where goods wait for buyers to come and get them. Amazon has upturned that entire concept by creating shopping experiences that deliver on convenience in a big way. Dart points out that digital sales have been consistently outperforming sales in brick-and-mortar sales for more than 20 years, and e- commerce now captures about 17 percent of core retail sales, and this is a trend that's accelerating. "It's not slowing down – this shift to convenience," he said, adding that convenience has grown increasingly important to consumers. "Amazon is driving a lot of that with what they offer, which is incredible convenience, but we also notice that the consumer is just valuing their time, valuing how they spend every dollar, ever hour differently than before." The convenience that Amazon is able to offer is propelling the growth of the online retailer. "Amazon has penetrated the retail market at almost the same speed Walmart did, but what we notice now, 20 years into Amazon, is that the growth rate is accelerating," Dart said. "Our belief is that Amazon is not only going to surpass Walmart in terms of its penetration of total retail sales; it's going to do it much faster. It's actually accelerating in that direction." Now peer-to-peer commerce platforms like Etsy are going even farther to meet consumer needs by giving consumers a way to shop for customized items that they can feel a personal connection with. "We're seeing a lot of re-commerce – people selling different things; and as technology develops, and it gets a lot easier for these mini-merchants to get payment from their customers, people will be able to do this without a platform in between," he said. "It's an existential threat to Amazon that one day in the future there could be a platform-less marketplace – lots of local people trading with each other in ways you could never imagine." Investment in shopping malls is declining on Wall Street in a way that suggests to Dart that we can expect to see a high proportion of existing malls disappear over the next few years. There are roughly 1,400 shopping malls across the country now, of which about 200 are high-end specialty malls and around 300 or so are strong regional malls, he said. The other 900 malls "actually need to disappear," according to Dart. " Wall Street's woken up to the fact that the mall structure is going to go through a massive economic dislocation. Some people, I think, are still in denial," he said. Successful Retailers Create Connection Independent specialty retailers have some opportunities to become the last places left on the retail landscape where consumers actually go to shop, according to Dart. "Number one, you can become a great entertainment destination," he said. Or you can work to make sure that your store is an active part of the community, the way that farmers markets are part of the communities in which they operate. "The farmers market you go to on a Sunday, and it's incredibly vibrant. There's a lot of people; there's music; there's food; people are talking to each other, discussing different things," he said, drawing a sharp contrast with the conventional supermarket that also offers f resh produce. It's all food; but what's sold at the supermarket is offered in an environment that doesn't offer the excitement and entertainment of the farmers market. "Retailers that don't define themselves in either one of these spaces [as an entertainment venue or as a part of the community], I think are really going to struggle in terms of getting great economic returns." To look for a model to emulate, look to independent bookstores, which took a beating when Barnes & Noble and Borders came into the market. They took another beating with the ascendance of Amazon. Now Borders is gone; Barnes & Noble is struggling. Independent bookstores are one of the fastest-growing segments of retail, according to Dart. Among the attributes contributing to that growth is their curated assortment that plays into customer desires to connect to the community, for customization and convenience. "Local bookshops have just done a phenomenal job of that," he said. "It's clear the consumer is responding to them." He predicts that this particular sector will continue to grow. Dart recommends that retailers think about how they can help their consumers see their stores as a memorable place that's far f rom boring, although, admittedly, that's not necessarily easy to do. "Use services as the stage and products as the props to create a memorable event that only exists in the mind of an individual at that time who has been engaged on an emotional, physical, intellectual or even spiritual level," he said. This means understanding what's really bringing your customers into your stores and appealing to that. Dart calls this empathetic retailing. "You really don't view your consumers as someone who's just going to be buying more product, you're really thinking very much differently about their lives," he said. As an example, he points to Patagonia's success with a 2011 advertisement directing its audience not to buy the outdoor outfitter's latest new jacket unless they really needed it. The ad actually suggested that prospective customers think about whether they could buy a used jacket and use that instead of buying anything new. During the campaign, Patagonia sent out an email to its customers on Black Friday asking them: "We ask you to buy less and to reflect before you spend a dime on this jacket or anything else. "Environmental bankruptcy, as with corporate bankruptcy, can happen ver y slowly, then all of a sudden. This is what we face unless we slow down, then reverse the damage," the email read. Environmental concern is at the core of the brand's ethic, and so this message resonated with Patagonia customers while it also, subtly, communicated a message to prospective customers that Patagonia's products are high quality and durable – a message that ultimately allowed the company to raise its prices, according to industry observers. " That was an incredible branding message for them, because it really did answer a lot of the questions that their constituents have, and that's why Patagonia has such a phenomenal following," Dart said, suggesting that retailers think about, "What would be the equivalent message that you would have for your brand that defines it in this interesting way, as Patagonia did, that would truly connect with the customer?" he said. "It's actually an extraordinarily difficult exercise to do." "How you connect with consumers is extremely important," he added. In a world of product ubiquity, consumers are looking for real connection, according to Dart. "It's all about fans, and how do retailers and brands create those fans?" KN KITCHENWARE NEWS & HOUSEWARES REVIEW • NOVEMBER 2019 • www.kitchenwarenews.com CREATE COMMUNITY Continued from page 1 10

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