Hearth & Home May 2017

Experience Preferred

By Lisa Readie Mayer

Consumers are choosing experiences over things. Here’s what that means for barbecue and outdoor living retailers.

There is a gradual consumer shift away from buying “stuff,” to spending money on experiences. Rather than buying clothing, housewares, decorative accessories, furniture, appliances, and other “things,” today consumers are increasingly spending their disposable income on experiences such as recreation, dining out, and travel.

Some say the trend is the latest rendition of “keeping up with the Joneses,” only instead of having the biggest home, the coolest sports car, or the priciest luxury watch, consumers are looking for the most unique experiences to tell their friends about (often on social media).

Others argue that the movement fits into a growing mindset that possessions are not important, and the path to greater fulfillment is found while experiencing new activities and adventures, making memories, and living life. Whatever the reason, many of today’s consumers value experiences over goods, and they’re willing to pay for them.

A 2016 survey of 7,000 consumers by the National Retail Federation found that 40% would like to receive a gift of experience, such as concert tickets, a weekend getaway, dinner out, or a yoga session, as opposed to a gift of “stuff.” The result was highest among younger consumers (57% for 18 to 24-year-olds; 50% for 25- to 34-year-olds), but the trend is growing among all age groups (44% for 35 to 44-year-olds; 20% for ages 65 and older) as homeowners downsize their homes and possessions.

A study by Millennial market research firm Ypulse, shows 74% of 13- to 33-year-olds would rather spend their money on experiences than products. That age group is also looking for better in-store experiences when they do shop; 56% say they would go to stores more often if there were more to do there.

An analysis of Chase debit and credit card purchases in 2015 showed Millennials (born between 1981 and 1997) spent 34% of their total annual spending on experiences such as travel, entertainment, and dining out, compared with 28% for non-Millennials (born before 1981).

According to the Chase report, “The spending patterns of the Millennial generation are important, as they’ll be shaping consumer demand for years to come. The compound annual growth rate in retail spending from this group is forecast to be 15% from 2014 to 2020, versus a 4% increase (in retail spending) for those ages 35 and up.”

Wine tasting at a vineyard.

Why the Shift?

According to Fortune magazine, the appeal of experiences is fueled by pressure to post about them on Facebook, Instagram and other social media platforms, something that is becoming increasingly important to people of all ages, but particularly to Millennials. Does anyone go to Starbucks and pay $4.95 for a venti Caramel Macchiato because they’re thirsty? It’s more likely because it’s a fun social experience, and it doesn’t hurt that the puddle of luscious caramel dripping off the cloud of fluffy whipped cream down the side of the cup will rack up a lot of likes from one’s Instagram followers.

But even experiences that were once considered special are becoming next-level. Someone planning a trip to Italy, for instance, might forgo touristy stops at the Trevi Fountain, the Coliseum and the Pantheon, in favor of a culturally immersive culinary tour of Tuscany with wine-making at an ancient vineyard and cooking classes in a rustic villa. Rather than simply going on a hike, travelers are joining hiking-trail restoration projects in national parks.

Instead of vacationing at a luxury hotel on the beach, growing numbers are paying to take volunteer vacations to build houses in third-world countries or work on conservation projects. There are yoga retreats, craft brewing workshop weekends, farm-to-table immersion experiences, and countless other ways to spend one’s money that are far more interesting than buying a new set of throw pillows or a pair of jeans, or even a grill.

Experiences like these are competing for your customers’ discretionary dollars. Add in the cost of everyday “necessities” such as Starbucks lattes, fitness classes, Netflix subscriptions and cell phone bills, and there’s even less disposable income with which cash-strapped Millennials and post-Recession savings-minded older adults can buy “things.” When they do, they are increasingly buying them online.

Experience-Driven Retail

Retailers can and should tap into this experience trend in two ways. The first is to emphasize how the products you sell can enhance your customers’ lifestyle experiences. You’re not selling grills, outdoor kitchens, fire pits and patio furniture; you’re selling a way for customers to enrich their lifestyle and experience greater enjoyment of their home.

A grill or smoker will help customers cook fantastic barbecue worthy of a TV pitmaster that will impress their friends. A fire pit and outdoor TV will become the gathering spot for watching football on Sunday afternoons, or for making s’mores and memories with the grandkids. An outdoor kitchen will help customers host epic backyard parties that will be the envy of the neighborhood.

The products you sell are at the heart of many of your customers’ most desired experiences and Instagram-worthy moments. You need to point that out.

A museum quality display at Cabela’s in Glendale, Arizona.

Experience-Driven Retail: Part 2

Another way to tap into the experience trend is to make your store a destination experience, giving people a reason to shop there beyond the merchandise. Known as “Shoppertainment,” the idea is to use events, activities, and other value-adds to create a memorable in-store experience that will attract customer traffic, engage them in the store longer, and increase sales.

As an article on the trend in Forbes magazine puts it: “If people can shop online, why bother going into the store?” The advice: make it worth the trip. The article points out that consumers will go out of their way to spend money with businesses where they enjoy the experience, even if prices are higher than the competition’s. But it cautions, “If retailers don’t figure out how to bring in foot traffic, (they) will …potentially die out.”

In fact, the number of small, independent retailers in the country has been shrinking. According to the U.S. Census Bureau, in 1992 there were approximately 990,000 retail stores with fewer than 20 employees in the U.S. By 2014, that figure was down to 664,000 stores. Even once-powerful, large brick-and-mortar chains such as Macy’s, Kohl’s, Sears, and JC Penney, are struggling, closing stores, laying off workers, and looking for ways to stop the bleeding.

The retailers that are doing well have figured out how to make their stores a destination by enhancing the shopping experience. Many small, independent booksellers are doing this effectively and are thriving, despite competition from Amazon. According to the American Booksellers Association, there were 2,227 independent bookstores in the U.S. in 2015, up from 1,651 in 2009. The stores have succeeded by building a loyal customer base through extras such as in-store writing workshops, book clubs, preschool story times, and local author visits, and by getting to know their individual customers’ reading preferences so they can recommend books.

According to the The Wall Street Journal, shopping malls are attracting shoppers by filling the empty storefronts left by shuttered retail tenants with experience-centered businesses such as virtual-golf driving ranges, skydiving simulators, escape rooms, laser tag, glow-in-the-dark miniature golf, and movie theaters with gourmet dining and reclining seats. A study by commercial real estate research firm CoStar shows food-and entertainment-focused businesses now account for 22.1% of leased space in shopping malls, up from 19.2% in 2012.

Sports outfitter Cabela’s uses free fly-fishing lessons, indoor trout ponds, and archery ranges to draw customers. A Texas grocery store has live music every weekend. Trader Joe’s offers free food and coffee samples, occasionally surprises random customers with bouquets of flowers, and rewards kids with free stickers at the check-out and a prize for finding a toy lobster hidden among the shelves.

Luxury appliance retailer Pirch may sell grills, kitchen, bath, and laundry appliances at its nine locations across the country, but it prefers to say it’s in the “business of Joy.” Offering services such as valet parking, a coffee bar, cooking classes, chef demos, and the opportunity to test out appliances first-hand before buying is part of a company philosophy that says, “Creating joyful experiences is more powerful than simply handling business transactions.”

What all these businesses have in common is that people enjoy shopping there. The chance to taste something good, learn something new, try something fun, and interact with pleasant, knowledgeable and helpful salespeople, are compelling motivators to shop in that store, rather than point and click online.

Beer-and-burger night with a craft brewer.

So What Can You Do?

Here are four things you can do right now, for little or no money, to engage and educate customers and turn your store into a destination experience.

Play Music. Studies show in-store music not only creates a positive experience and atmosphere for customers, it can lead to greater sales. Research shows slower-paced music encourages shoppers to linger longer in the store, and boosts sales by as much as 38%, according to one study. This is particularly true of impulse items, which could be a potential boon to the barbecue accessories department.

Another study showed that when classical music was played at a wine store, it increased sales, especially of expensive wines. (FYI, fast-paced, up-tempo music results in faster shopping and fewer purchases.)

Classical music might be the soundtrack to increased sales of luxury Outdoor Rooms, or maybe all-American country, blues or jazz music might be more effective in your store. A membership to Apple Music costs $10 a month and gives you access to millions of songs to create your own playlists, or offers curated stations for every genre and mood. Switch it up to see what works for you. Or consider adding live musical performances to the festivities when hosting large-scale demos or other store events.

Scents create a sensory experience for customers.

Tap the Sweet Smell of Success. From banks to hotels to retail chains, businesses are increasingly using scents to create a sensory experience for customers. The scent-marketing industry is growing by 15% annually, according to Advertising Age. Scent experts say the sense of smell triggers memories faster and stronger than other senses because it is directly connected to the limbic system, the part of the brain responsible for storing emotions and memories.

According to a study by the Global Journal of Commerce and Management Perspective, scents have a strong impact on consumer behavior, “in terms of emotion, evaluation, willingness to return to a store, and purchase intention.”

Hearth and barbecue dealers should have this nailed. Wood smoke is one of the most evocative scents around, stirring happy emotions and fond memories of childhood backyard barbecues, campfires, or evenings spent by the fireplace. Even if you’re not cooking something, the smoke from burning wood, charcoal or pellets will create fantastic aromas that will become your store’s “signature scent” and draw in customers. Bottom line: burn wood, charcoal or pellets every day.

Sampling Peppernutz sauces in Rochester, New York.
Photo: ©2017 www.laurenmclaughlin.com.

Focus on Food. People grill and barbecue because the food tastes good, so common sense says food should be your focus. Sample sauces and rubs every day. Host frequent grilling demos with tasting samples. Offer cooking classes. Hold events that cross-market with other local food and beverage businesses, such as a beer-and-burger night with a craft brewer, a steak and bourbon tasting with the liquor store, a vegetarian grilling class with the local farmer.

Have a stack of cookbooks, or a tablet computer loaded with grilled and smoked recipes organized by food and technique, available for customers to peruse while waiting. Set a bag of marshmallows and long-handled skewers (available for purchase in-store!) by a burning fire pit outside and invite customers to sit a spell and roast them over the fire. Create a hospitality station with an urn of ice water and a pod-style single-cup coffee brewer. These efforts not only make your store a fun place to shop, they drive home the message that the products you sell make great-tasting food.

Faraday’s Kitchen Store veggie cooking class in Austin, Texas.

Strengthen Grill Skills. Help your customers (and sales staff) become proficient grill masters by holding monthly, hands-on training sessions to teach new grill owners how to use and maintain their grills. These sessions have multiple benefits. They position your store as the go-to authority in the category with unparalleled experience. They create more satisfied customers who will use their grill more often and refer friends.

By getting customers back into the store, you can remind them of other accessories and add-ons available to enhance their cooking experience. It’s also a chance to remind them that you service everything you sell, and offer annual cleaning and maintenance contracts (if you don’t, you should; retailers say it’s a good revenue source and often leads to sales of new grills and equipment).

Taking steps to make your store a destination location, and focusing on selling the outdoor lifestyle, speaks to the experiences today’s consumers are craving. And it gives people a reason to shop in your store that they can’t get online.

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