In the power struggle between consumers and retailers, consumers are winning.
Shoppers are “very nuanced in their expectations,” Ron Johnson, the former CEO of J.C. Penney and the former senior vice president of Apple‘s retail division, said at CNBC’s Evolve Conference on Wednesday in New York. Johnson now is the CEO of Enjoy, a company that’s helping retailers build out mobile stores.
Consumers are “responding clearly to innovative new business models,” he said. They like newness. And “the tolerance for a bad experience has gone to zero.” As a retailer, “you’ve got to be great every time,” Johnson told the audience.
Increasingly, shoppers are able to go directly to brands instead of visiting department stores. This means stores like Penney are struggling and shutting stores because consumers are putting their dollars toward their favorite brands. In picking their favorites they may be won over by experiences such as a yoga class offered at a Lululemon store, or by the brand’s image.
“I think it’s better to be a consumer today, in a lot of categories,” than it was a decade ago, said Jeff Raider, who co-founded both glasses maker Warby Parker and shaving company Harry’s. Both companies have disrupted the categories the operate in and Harry’s is slated to be acquired by Schick-owner Edgewell.
In many cases these companies are innovating on behalf of people, Raider said.
“Ten years ago, I had to wait outside for a cab in the rain,” he added. Now, there are Uber and Lyft.
“We see consumers really driven by ease,” Susan Tynan, the founder and CEO of framing start-up Framebridge, said, explaining people are looking for a seamless shopping experience.
She said that’s one reason why Framebridge, which started online in 2014, recently opened its first two bricks-and-mortar stores. She said when people visit a Framebridge store, instead of shopping online, basket sizes are up 50%, she said.
Also, in search of new brands or stores to buy from, more and more shoppers discover brands through social media, she said. “They can learn from others … their friends.”