Surviving the Retail Apocalypse
Retail dies when based solely on the concept of visiting a store for a commodity item. To thrive in today’s market and emerge from the “retail apocalypse,” retailers must innovate and focus on what's important to customers: ease, experience and execution. With more shoppers migrating to online purchases, and others wishing to shop quickly and efficiently in-store, these three E’s allow retailers to meet and exceed consumer expectations, thereby positioning themselves for long-term security.
Today’s consumer wants it all and wants it now. Shoppers are looking to in-store marketing and apps to make product selection easy. The omnichannel strategy integrates all methods of shopping, which allow customers to shop where want and when they want. The key is attracting customers to visit brick-and-mortar stores. Even online giant Amazon.com is recognizing this. In September, Kohl’s announced a partnership with Amazon which allows customers to return Amazon purchases in select Kohl’s stores. Beyond partnering with competitors, retailers are offering more wish lists, expediting the fulfillment of orders and being more responsive to customer reviews. With a store’s inventory and staff at the consumer’s fingertips, they're more comfortable navigating traditional brick-and-mortar stores.
Shopping is all about the experience. Chains such as Nordstrom have made stores a destination by offering curbside pickup, manicures and pedicures, and restaurants. In addition, the company partnered with Trunk Club, which caters to shoppers who are loyal to brands but believe shopping in-store is overwhelming and inconvenient. Trunk Club members are assigned a personal shopper who chooses items based on a consumer’s stated preferences, then ships the items directly to the consumer. This forward-thinking partnership is designed to mitigate revenue losses from in-store sales. Retailers should look at the Nordstrom model as a way to evolve the shopping experience.
Other retailers are evaluating how they can improve the in-store experience and reaffirm brand loyalty. Target is aiming to combine the physical and digital experience of retail. Pop-up shops are also appearing in large cities throughout the country and are used to extend a brand and introduce new products. The pop-up shop industry, valued at $50 billion in 2016 according to the American Marketing Association, offers unique services, convenience and a fun experience. Some brands experiencing recent success with this model include Organic Valley dairy products, New Form Perspective, Kylie Jenner cosmetics, and Kendrick Lamar.
Executing promotions and customer-friendly policies is essential for retailers year-round. Many consumers search for retailers with quick and easy returns, free shipping, prime product placement in stores, and free in-store pickups.
Retailers should pay particular attention to the omnichannel experience. Limited-time offers via websites, in-store apps and email are key and have been successful for Kohl’s, Sephora and Target, which employ these strategies during various marketing campaigns that are strategically timed throughout the year.
Uniqlo has become a key player in the United States market that sticks to the basics. Known for its affordable, low-cost clothing made with quality material, Uniqlo has been recognized for its aesthetically pleasing stores with wide aisles, items in stock and employees trained to deliver a memorable customer service experience. Its signature HeatTech material, designed to trap a person’s body heat to keep them warm on a cold day, has become a staple of the brand and is cherished by its loyal customer base.
Holiday retail sales exceeded projections by 5.5 percent, netting $691.9 billion in 2017, with online shopping projected to surpass in-store sales for the first time. Brick-and-mortar stores, having taken note, are innovating to adjust to the changing market. Despite this historic shift, customers still want to see and feel items, which are strong influencers in the consumer decision-making process. Consumer behavior and spending habits have changed, but the human senses have not.
The three E’s create a winning retail strategy which can secure a stable long-term outlook for retailers across the country. Retailers should tap into the mind of consumers by listening and asking questions to give the customer confidence while making a purchase, regardless of the shopping season. Putting the customer first ensures that customers of all ages get something unique from their retail relationship.
Kristen Regine, DBA, is a professor of marketing in the Johnson & Wales University College of Business at the Providence Campus.
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