Many are calling this the retail apocalypse. Recent reports estimate over 8,600 retail locations will shut down in 2017. By comparison, 6,200 retail stores closed their doors during 2008’s economic downturn — an all-time high at the time.
Retailers like The Sports Authority have vanished, and others are quickly realizing the same fate: Gander Mountain, Macy’s, J.C. Penney and RadioShack are just a few examples of many on the brink of extinction.
So, should we start planning for the end of retail as we know it? Probably.
Amidst the potentially devastating landscape, there are retailers rising above, proving the future isn’t bleak, but hopeful. These retailers aren't just online juggernauts like Amazon.com, but brick-and-mortar retailers like Sephora, REI and Flight Club. These retailers aren't only surviving, they're thriving. And their success isn't a fluke.
Rather than attempting to compete with Amazon by offering an endless assortment of products at rock-bottom prices, these brick-and-mortar retailers have found a way to differentiate their brands. By doing so, they’ve won the hearts of consumers.
This isn’t a retail apocalypse. No, this is the evolution of retail, and it’s long overdue.
3 Ways Retailers Can Change the Fate of the Industry
1. Create a Dynamic Experience
Sephora embraces the differences between online and offline shopping to create experiences tailored to its customers’ preferences. The beauty retailer has found a way to bring technology and convenience into the store experience without abandoning the unique experience only brick-and-mortar retail can deliver. Most retailers have yet to find this balance.
Sephora gives its customers the ability to interact with its products with or without the support of a store associate. Shoppers can find products that match their skin tones by scanning their faces to get their "Color IQ." Using Sephora's mobile app, customers can virtually “try on” every available lipstick color through augmented reality.
Sephora supports the less tech-savvy consumer by providing ungated access to the products other retailers typically lock away. Instead of forcing shoppers to interact with employees, Sephora places aspirational products in front of the counters where consumers can test them out at their convenience.
If a shopper does want human interaction, a Sephora associate can help them up their brow game, take their contouring skills to new heights or achieve the perfect pout. Sephora is committed to hiring and training beauty buffs who are readily available to share their passions, experiences and knowledge.
Shopping at Sephora isn’t just about the product you buy; it’s also about your dynamic in-store experience.
2. Stand for Something
In 2015, REI announced it wouldn't participate in the Black Friday shopping frenzy. Rather than encouraging crowds, door busters and bargain shopping, the outdoor apparel and equipment retailer encouraged its store teams and customers to #OptOutside.
The idea to close up shop on the busiest day of the year must have sounded outrageous at first. But since 1938, REI has been dedicated to getting people outside. This campaign was a perfect way to simultaneously make a statement and support a long-standing cause.
Gear junkies and outdoor gurus headed for the outdoors in droves. The positive buzz generated around this campaign led to more than a few extra skiers hitting the slopes. According to Forbes, REI delivered a 9.3 percent revenue increase and added over 1 million new co-op members because of the campaign. On the heels of its successful launch, REI resurfaced #OptOutside in 2016 with similar results.
REI is also looking for additional ways to demonstrate its passions and inspire its customers along the way. In April, the retailer launched a “Forces of Nature” movement to change how the industry approaches women as both employees and customers.
REI was co-founded by a woman — Mary Anderson — and today nearly half of its employees are women. Despite REI's strong internal heritage, the outdoor industry consists of male-dominated imagery, storytelling and acknowledgement. REI is looking to change that by featuring women in advertising and marketing materials. It has committed $1 million to support nonprofits that create opportunities for women in the outdoors. Additionally, REI is introducing more than 1,000 events specifically designed for women.
Shopping at REI isn’t just about the product you buy; it’s also about the causes you support.
3. Offer Exclusivity
To sneaker collectors across the globe, Flight Club is considered a mecca worthy of a pilgrimage. For the collector in need of the pre-released Yeezy or the uber exclusive Air Jordan 1’s, Flight Club is the one-stop shop. It began in 1999 with vintagekicks.com, an online marketplace for consumers to purchase hard-to-find sneakers. In 2005, Flight Club opened its first brick-and-mortar location to put its authenticity and selection in front of consumers.
Despite the seemingly unlimited access to their favorite sneaker, online customers are trekking to New York City or Los Angeles to visit a Flight Club store instead. Once there, sneaker heads spend hours breaking down the history of a shoe, talking footwear technology and nerding out on the latest fashion trends.
In an extremely competitive market, Flight Club welcomes thousands of customers a day into its two store locations, ships countless products to adoring fans around the world, and receives recognition and accolades for its uncanny ability to offer sought-after sneaker grails.
Shopping at Flight Club isn’t about getting great deals; it’s about wearing a shoe no one else can find. No one but you, that is.
Bringing it All Together
Retail naysayers may preach doom and gloom, but there are a few retailers that have found ways to provide consumers with compelling reasons to interact with their brands. These retailers are winning. More importantly, their customers are winning.
The retailers that find a way to create a memorable experience, elevate their cause or establish an element of exclusivity will transform the face of retail as we know it … and we’ll all be better off.
Nick Stagge is the senior director of marketing and head of brand strategy for Experticity, a company that helps brands and retailers improve conversations through education, product seeding and offering firsthand product experience.