Retailers should inject fun into their shopping experience to keep consumers engaged and compete with service platform providers, such as Uber Eats and Deliveroo.
The 2024 OC&C Strategy Consultants Global Retail Proposition Index (RPI) highlights that consumers are increasingly prioritising services and experiences over goods. This trend spans all surveyed global markets and is seen in categories like clothing, electronics, and furniture. Amid economic instability, retailers have focused on value; however, consumer interest in “fun” is narrowing the gap between “fun to shop,” “value for money,” and “reliability,” as shown by responses from 48,000 consumers surveyed.
According to Luke Sparke-Rogstad, retail expert at OC&C, this shift is most pronounced among younger generations: “Generation Z is leading this shift, being twice as likely as baby boomers to name ‘fun to shop’ as a reason to frequent a retailer. This trend applied across all surveyed geographies.
The retail experience has lost its ‘fun’ element, making retailers increasingly vulnerable to competition from leisure activities when it comes to discretionary spending. New retail disruptors like TEMU and SHEIN are using ‘fun’ to innovate their customer’s journey and should provide both offline and online retailers with inspiration and urgency to reinvigorate the retail experience they provide.
In OC&C’s RPI report SHEIN and TEMU rank within the top five brands for ‘fun to shop’ across all geos surveyed, and between 2022 and 2023, their revenue soared by 35% and 90% respectively.
These retail brands spark ‘fun’ through a range of creative features which encourage consumer engagement, interaction, and excitement. Winning ‘fun’ traits include:
- Eclectic and diverse product ranges, which are constantly updated, creating a new experience every visit and a sense of anticipation.
- Gamification of purchase journey, including daily check-in rewards, referral bonuses, prize wheels, creating a buzz and sense of excitement.
- Flash sales, which create a sense of urgency and fear of missing out, which in turn make purchases then feel more rewarding.
- Hyper-personalisation, with fast-moving and granular algorithms to identify individual users’ preferences in real-time and generate constant updated recommendations.
- Attention grabbing UI, such as bright and stimulating UIs, which create an energetic and exciting experience. Frictionless design and infinite scrolling also create a seamless purchase journey.
- Social-proof, community driven model, including collaborations with influencers and encouragement of sharing photo reviews create a sense of community and interaction with increased trust and confidence in purchase.
As Generation Z gain further spending power, retailers must consider strengthening their strategic value proposition through a ‘fun’ retail experience to engage this growing consumer audience, whilst ensuring competitiveness on price and product.
In a shifting retail landscape, where consumers value both price and experience, retailers who embrace “fun” as part of their value proposition will stay relevant and competitive through strengthening their strategic value proposition. Engaging consumers through memorable experiences—whether online or in-store—will set forward-thinking retailers apart. By integrating elements of excitement, interaction, and personalisation, all retailers have a chance to captivate the growing demand for experiential shopping and foster long-term loyalty, particularly among younger generations.
Closing thoughts:
Luke Sparke-Rogstad, Associate Partner at OC&C concludes: “Retailers will need to work hard to inspire and excite their customers, while continuing to deliver great value. Temu and Shein are re-inventing what fun in retail can mean beyond in-store theatre/experiences to include gamification, flash sales and community engagement via social. Crucially, there is a balance to strike both online and offline between efficient and inspirational shopping missions and the assortments and journeys needed for each,”.
