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NRF 2023: ‘Embrace the Dopamine Economy’

From the outset of the National Retail Federation’s Big Show 2023, attendees were reminded just how quickly the world is changing under their feet.

Kate Ancketill, CEO and founder of GDR Creative Intelligence, kicked off Sunday morning’s sessions with a reminder that the world of retail for the foreseeable future is not the relatively stable place past generations knew it as in a talk covering major disruptors reshaping what lies ahead.

Citing the “three C’s”— Covid, conflict and climate change, Ancketill described how recovery from the pandemic created a world of even greater inequality as those able to work remotely gain even further advantage over those who must work on site, a conflict she dubbed, “somewheres vs. anywheres.”

Further frustrating recovery from the pandemic is Russia’s unilateral attack on neighboring Ukraine, which Ancketill, who is British, described in detail, from the loss of Ukrainian wheat to inflated energy costs.

“In Europe, Germany is especially impacted. There are places in cities where there is no hot water and people choose between heating and eating,” she said. “In France, every [weather] forecast is urging non-usage of energy at peak times… At pubs in the UK, everybody is wearing coats inside and nobody complains because better that the pubs stay open than pay for heat.”

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Even in the U.S., she said, rolling brownouts and blackouts in California and elsewhere were not uncommon in 2022.

Ancketill said one-third of the world will find itself in recession this year, and also said that by 2030, many net zero emissions targets should be fully implemented. even if one were to be encouraged by the prospect of electric vehicles, Ancketill cited research stating there is not enough copper or cobalt on hand to meet demand for electric cars, that four times the current amount of lithium is needed to meet 2030 EV targets, and the prime locations for these rare earth minerals are controlled largely by China and Russia.

With that, Ancketill flashed the word ‘gloom’ on the screen.

“We have to prepare for the end of abundance for a period,” she said. “We have to do more with less for a period.”

Ancketill pointed to three key areas that will define this period—geopolitical changes, energy sobriety and extended life for products, particularly clothing.

Pivoting into a more positive future, Ancketill displayed the world ‘bloom’ onscreen. She cited a 2021 survey finding that business leaders are more trusted than government, NGO or media by the public, and people will be looking to companies to guide them through rocky times.

The “democratization of wealth” will be key to success in business, she said, pointing to partnerships between Tesla and the state of California to allow car owners to give back unused energy to the power grid, and STEPN, a company which pays people in cryptocurrency for how much they walk using shoes featuring an NFT tag.

Along those lines, she foresees an increased appeal in affiliate marketing wherein anyone with an audience can advertise on the web for a share of sales.

Ancketill pointed to advances in using mushrooms in textiles, QR resale tags on products,  and efforts to bestow personhood on nature as business models to bet on in the near future.

As for products that will provide creature comforts, Ancketill predicted the biggest successes will be experiences that aim for straight dopamine shots to the consumer’s brain, moreso than providing a lasting, tangible product.

She said to be on the lookout for “dopamine lounges” that exist only to “generate happiness.”

Ancketill highlighted a video from a retail store called Wow Concept, located in Madrid, where customers are invited to explore a mixed reality experience.

“It’s not a store; it’s a destination. It’s a place where you feel things, a place where you learn things. It’s anything but what we used to think of as a department store,” she said. “This is not a place to shop; it’s a place to feel.”

For takeaways, Ancketill advised stakeholders to leverage the power shifts in “volatile and uncertain times,” move to inclusive, environmentally mindful regeneration and to “embrace the dopamine economy.”

Here comes the Metaverse

Further evidence that the scope of retail is ever-changing came in a Sunday afternoon session when insiders dissected everyone’s favorite topic: the metaverse.

Jill Manoff, editor-in-chief of Glossy Magazine, quizzed Winnie Burke, head of fashion and beauty partnerships at Roblox, about the Web3 company’s partnerships with Tommy Hilfiger and NARS cosmetics in which their both companies created metaverse games in conjunction with metaverse community members to sell their products.

“Roblox is more alternative socialization; it’s the opportunity to engage,” Burke said. “It’s different than immersive socialization; it’s a two-way conversation, not just a brand.”

Burke said that currently more than 100 brands have experiences on Roblox, and eventually she expects every company—big and small—will have a presence on the popular platform.

The Tommy Play video game highlighted on the big screen put the brand on full display in a world inspired by two of the boroughs of New York City with a main character sporting Tommy Jeans and running and jumping through a surreal world in games like Parkour Freeze Tag and Graffiti.

“Everything we do is test and learn and with Tommy Play, we’re finding the community where they are,” said Chris Takkenberg, vice president of digital product for Tommy Hilfiger. “Whether it’s Roblox or Decentralized we’re really looking at opportunities where we can experiment and learn fast.”

In addition to the one-player Tommy Play game, Hilfiger partnered with Roblox to do an immersive, mixed reality broadcast, of sorts, of New York Fashion Week.

“We wanted it to be really integrated with the physical event,” Takkenberg said. “The avatars were larger-than-life. You could go from walking around the streets of New York to sitting on top of buildings, defying gravity, flying around—that’s only something that could be done in the metaverse.”

Meanwhile, the fashion show was going on and users were able to purchase digital versions of the garments for their avatars.

Burke said that surveys of users in these collaborations revealed that two in every five said their digital ID was more important than how they see themselves in the real world. She said 70 percent of users reported that their digital IDs were influenced by their physical selves, but most interestingly, that 70 percent said their physical style were influenced by their digital personas.

“That shows there’s opportunities for brands and retailers,” Burke said. “People will take risks with styles with their digital style they wouldn’t feel comfortable with in real life. Are they designing for that target?”

Takkenberg said Hilfiger is in the metaverse game for the long haul and that the key to success is relationships among the users who build the game.

“It’s a community, first and foremost,” he said. “We want to learn in that space and to do that we need to build bridges with the community.”

 Make way for the ‘Zalphas’

As if talk of the end of the age of abundance and creating new communities within the metaverse wasn’t enough of future shock, day one also introduced a new generation.

Known as ‘Alphas,’ this is the generation around 13 years of age and younger who in the blink of an eye will be a coveted consumer class, and about whose personalities and preferences little is known.

Leslie Ghize, executive VP for creative consultancy Doneger was joined by Kristin Patrick, executive VP and chief marketing officer of Claire’s Boutique for a discussion on what makes Alphas and ‘Zalphas,’ those caught between Gen Z and Gen Alpha, tick.

“Zalphas are Gen Zers on steroids,” said Patrick, who coined the hybrid term herself. “They are all about creativity, being green about the planet, sustainability and gender fluidity.”

Patrick said she was reminded of a slogan from an ad campaign from her days at Gap that explains the difference between millennials and Zalphas.

“’Fit in to stand out,’ was the slogan, but this generation is the exact opposite of that. They want to forge their own path,” Patrick said. “They are analog-loving, digital natives, the first generation to be digital natives.”

Ghize highlighted some of the paradoxes by describing this generation, which has had its formative years deeply affected by the Covid pandemic and growing societal unrest.

“They are trend-addicted, anti-capitalists, pro-environmentalist concerned about everything but wanting to buy,” she said. “They are price-conscious, status-seeking… They are pioneers of sobriety, but interested in psychedelic [drinks].”

Patrick said Zalphas are very interested in making their own clothes, but also interested in thrifting. She added that for a company with a 50-year-old legacy like Claire’s, it’s challenging, but vital to reach out to this generation with authenticity. If that authenticity isn’t there, Zalphas will see right through it, especially if they sense an adult is trying to hard to pander to their wallets.

Where Patrick has found a sweet spot connecting with this generation is in the metaverse, where, much like Tommy Hilfiger, Claire’s has created its own metaverse game world on Roblox called “Shimmerville”.

“It was a very natural place for us to go,” Patrick said. “Shimmerville is a town where you pick a place to live and you get to get a job doing ear-piercings.”

Patrick said Shimmerville has seen 3 million visitors and in the real world, it’s done wonders for Claire’s loyalty programs.

Ghize pointed out a soft side in this generation that lies beneath a rough exterior, developed by coming of age in some difficult years.

“They’re emo sweethearts,” she said. “They’re angsty and sarcastic but kind of sweet and mushy on the inside.”