Editor's Note: A Mixed (Shopping) Bag
Let's face it: Brick-and-mortar retailers have been suffering from slow economic activity and increased competition from online retailers for years, which is why so many of them are closing up their shops.
Gap has closed 20 percent of its store locations, RadioShack announced plans in March to close more than 1,000 stores, and other retailers including Abercrombie & Fitch, Barnes & Noble, Aeropostale, J.C. Penney, Sears, Staples, Toys"R"Us and, most recently, GameStop have all announced store closings planned for this year. Many of these companies just can't afford the real estate and personnel costs that go along with supporting hundreds of unprofitable store locations.
So why the mixed bag title? Because while many traditional brick-and-mortar retailers are closing stores, many of their e-tail counterparts are adding physical store locations to their businesses. Consider Google, which is set to sign the lease on its first physical retail outlet in New York City this year. And then there are the well-publicized online retailers that have opened up streamlined physical locations over the past few years, including Warby Parker, Bonobos, Frank & Oak, and Birchbox.
Why are these online brands taking the plunge into brick and mortar? Probably because they're not opening traditional retail stores. Instead, they're reinventing the physical store. Their stores are (and in the case of Google, plan to be) highly interactive, allowing shoppers the ability to configure and order products in-store using tablets and smartphones, and have their purchases shipped directly to their homes. A physical location also allows these once online-only retailers the chance to test markets and merchandise more or less items (depending on their goals), while at the same time offering a host of branding opportunities.
Some traditional brick-and-mortar retailers have taken notice of this new trend and are following suit, opening nontraditional brick-and-mortar spaces. Urban Outfitters, for example, recently opened a concept store in Brooklyn, N.Y. called Space Ninety 8. The "store" showcases more than 40 local designers, has a restaurant and bar, as well as a series of rotating pop-up shops.
So which direction should a retailer go in? Open concept shops? Close stores? As is often the case, the answer depends on the company and its customers’ needs and desires. The good news is that there are a lot of exciting opportunities for retailers to explore and test right now.
Speaking of retailers, Retail Online Integration is excited to bring you our annual list of the 100 fastest-growing omnichannel retailers. As you'll see from the article, this year's list includes some traditional players as well as some newbies. All of the retailers included on the list have one thing in common, however: They've found the right formula for success.