First came the Great Depression. Then, more recently, the Great Resignation. But for retailers, particularly retail marketers, the new reality post-COVID is the Great Compression.
“The compression isn’t in the idea that technology moves so fast — it’s always been that way,” said Mitch Joel, founder of Six Pixels Group, an advisory, investing and content producing company that is focused on brands, commerce, community and what’s next.
“What we’ve seen is not that these tools are moving fast and we need to adopt them. It’s truly that from a consumers’ perspective, they’ve changed the way they buy. Break down the idea of digital or physical, there’s just the customer.”
Take a look at the NRF Nexus 2022 event recap to learn more from sessions at the show.
The Great Compression has two components, Joel explained during his closing session at NRF Nexus. One was amplification. “As a retailer, you became fundamentally sensitive to the idea of how digitally first you truly were in March of 2020,” he said. “You knew right away.”
Second was distribution. Everyone was online, and retailers were “suddenly in a world where we could see the discernable market is everyone,” he said. “Now the excuse of ‘our customers don’t do this’ was gone.”
All of this represents an “incredible opportunity right now, and this is an opportunity that’s happening at a time when inflation is real, supply chain problems are real, getting stuff to stores is real,” Joel said. “This stuff is easy and fast and simple — it just takes a bit of rethinking. It actually takes you not looking at it as destructive, but looking at it as disruptive and opportunistic.”
One of the lessons from the pandemic has been the value of services, Joel said. “I believe we’ve spent way too much time in the past talking about the experience. I believe if we saw anything in the pandemic, the real win was in services.”
He pointed to Walmart, which saw right away that people were adopting more pets during the pandemic, so in addition to stocking up on pet supplies, the retailer began offering pet insurance. Or banks, which have recently gone from charging per service to charging a monthly fee for access to all their products and services.
The lesson for retailers? If you sell products, what services can you supply?
The pandemic also shined a light on the differences between online buying versus physical shopping.
“I would argue that physical is experiential and mostly shopping, where online is transactional and mostly buying,” Joel said. In the case of physical stores, marketing was changed to be more transactional; Joel said his local bookstore started shelving books backward so customers wouldn’t have to pick up a book to read the description.
The online experience, meanwhile, has not yet tapped into the experiential, shopping consumer, but some new platforms are getting there. Joel pointed to Whatnot, a mobile-only live retail shopping experience online that enables anyone to create a virtual store and sell to the world.
“In watching what these retailers are doing online, it’s an amazing story for you. A lot of these retailers are pushing the boundaries of what a store is. They’re entirely virtual. They have a Shopify store and a Whatnot store and that’s it. And they are doing a ton of business,” Joel said.
NFTs represent another opportunity for retailers, Joel said. For example, the NBA partnered with Canadian-based Dapper Labs to digitize traditional trading cards. The result was NBA Top Shots, a crypto-collectible NFT; a LeBron James Top Shot NFT sold for $208,000 in February 2021.
The key to successful NFTs, however, is provenance and scarcity: Joel challenged retailers to think about their digital assets and how they can tap into that collector audience through special, limited-edition products only available directly through their brand.
Explore more about the behaviors of consumers post-pandemic.
Joel finished his session by discussing what he said was perhaps the “greatest retail success story” when it comes to embracing disruption: Mattel’s Hot Wheels, a product that anyone can buy for less than $1.
Not only is Hot Wheels constantly adapting and changing — partnering with retailers, licensing merchandise, offering exclusives — the non-digital-first business keeps its foot on the gas, as Joel put it. It’s experimenting in subscription models (the Hot Wheels Red Line Club), experiential retail (Hot Wheels Legends Tour) and NFTs (Hot Wheels NFT Garage).
The brand also taps into its fan base. Not only does Hot Wheels encourage collecting, trading, and buying and selling on other community platforms like Whatnot, eBay and Facebook, it’s created Treasure Hunt and Super Treasure Hunt products to keep collectors chasing after them.
The main question retailers are facing right now, according to Joel is, “Do you think the pandemic changed customer expectations forever or are we going to go right back to how things were?” For his part, Joel believes customers have changed and retailers and marketers must adapt.