Target would like to see you in real life

Dating apps are dying (well, maybe not Grindr.) But for the most part, people want real, in-person connections. Hinge even bills itself as the app that’s “designed to be deleted” after an offline connection is made. And there’s an entirely different industry that also thinks it’s “better in person”: Big Retail. 
The biggest names in commerce would like you to put down your phone and come visit them in person, pretty please.

“What we’re seeing is that the consumer is really going back to loving retail, loving to feel things, and feeling brands in real life,” Cyntia Leo, Urban Outfitters’ head of brand marketing, said during the Lead Innovation Summit in New York City in July. The journey may start on digital, but shoppers ultimately “want to touch your brand.”

It’s clear why that love for the physical is exciting retailers. Mickey Chadha, a vice president at Moody’s, said that in-person traffic is still the most profitable point of sale. But increasing foot traffic means that retailers have to create an in-store shopping experience that’s better than sitting on a couch and waiting for deliveries.

“When things can show up on your doorstep the next day, what’s the reason for going into a store?” Christina Hennington, Target’s chief strategy and growth officer, said during the summit.

For Target, that has meant improving its physical stores to make the offline experience one shoppers can’t live without. An experience that is “pleasant and enjoyable,” where customers can get support and services; one that can “enliven the senses,” and allow for “discovery,” Hennington said.

Doesn’t sound like a bad first date, does it?

Courting the cautious consumer

The American consumer could sure use some romance. Sentiment has largely been dampened by pesky inflation, which has pushed prices of everyday items higher than many shoppers can stomach.

The U.S. Census Bureau said in July that revised sales for the month of May were 0.3% higher than previous estimates, a sign that as the Federal Reserve gains confidence in cooler inflation, consumer shopping habits may start rebounding.

That’s welcome news for retailers like Target. It has been struggling with a downturn in discretionary spending that has led it to slash prices on more than 1,000 items.

Price cuts are a solid strategy. Retailers like Dollar General, Dollar Tree, and Five Below for example, have seen a jump in visits to their stores, according to a report from foot traffic analytics firm Placer.ai. But there’s another avenue retailers are using to reel in shoppers, and it exists on our smartphones.

Building an attractive online persona

For Urban Outfitters, there’s no better place to build an online profile right now than TikTok.

The platform, which boasts over 1 billion monthly users, lets Urban instantly chat up customers.

“We really want to make sure that we’re not only part of your feed, but that we’re part of your conversations,” Leo said during the Lead Innovation Summit.

That effort has seriously expanded Urban’s digital footprint. The retailer, which works with software company Dash Hudson on its social media, has seen a 424% increase in TikTok video views, a 275% increase in Instagram video views, and a 5,690% increase in new Instagram followers.

“Social media is the biggest bank for your advertising dollar,” Moody’s Chadha said. A retailer’s success on social media largely depends on how attractive they are to viewers.

Mastering attraction: Shake Shack and Miri

Shake Shack may not be in the business of Big Retail, but it has figured out a piece of that customer attraction puzzle.

Enter content creator Miri, who goes by “mirithesiren” on TikTok. Miri previously worked at Chick-fil-A and quickly gained popularity for viral videos of her free employee meals. The thing is, Chick-fil-A’s PR team said the videos violated company rules. When the two eventually parted ways, Shake Shack pounced.

“We thought there was such a niche,” Steph So, Shake Shack’s senior vice president of digital experiences, said during the summit. “We engaged her, ‘Why don’t you come to Shake Shack and make videos for food that we have?’”

Miri, who has more than 140,000 TikTok followers, ended up “shooting some really viral videos for us and our products,” So said. Miri has since posted sponsored content eating Shake Shack and has a long-term partnership with the chain.

Ultimately, it comes down to what’s big on social media, So said. “It’s really listening to the content people like and the videos people watch.” The impressions and engagement Shake Shack received from that effort “were far beyond what we could’ve gotten through in-house channels,” she added.

An enduring online and offline partnership

But with any relationship, it’s all about compromise. Moody’s Chadha said there’s a “marriage” that needs to happen between brick-and-mortar stores and sales that happen online. When the two align (even if unevenly), there’s an “engine” that can then make “great synergy.”

“You can’t have just one,” he said.

In Target’s case, its partnerships with companies like Starbucks and Ulta have helped it reach new customers. During the summit, Hennington said Target wanted to use its drive-up experience with Starbucks’ beverage service. By combining the two, it could allegedly “add a level of joy.”

“These pairings have more than a few benefits,” said Jill Blanchard, president of client solutions at Advantage Solutions, adding that “there’s the obvious real estate and labor savings,” when multiple stores are operating as one unique, in-store experience.

A happy ending

The marriage of getting online shoppers in stores has a huge silver lining: the end of retail closures.

The demise of brick-and-mortar locations exacerbated by the COVID-19 pandemic may finally be in the rearview mirror, Jerry Sheldon, vice president of technology at the market research firm IHL Group, said.

While e-commerce could play a part in the erosion of some retail locations, he said that “from a store standpoint, we are going to be fairly stable for the next several years.”

Ultimately, with consumers cautiously spending again, retailers have to act fast to make consumers fall in love with them — and get back into the market.

“Now retailers have an optimum amount of stores, and they’re going to spend that money on the stores and to have people come in and buy products,” Moody’s Chadha said. “It’s that marriage between e-commerce capability and in-store capability that’s going to actually make you a successful retailer.”