With Amazon’s convenience, Wish.com’s low prices, and social media influencers promoting fashion brands with direct links to buy online, the days where people must shop the malls are diminishing.
People no longer have time or desire to get in their car and go to a store, especially when at the touch of a button, the desired item can appear on their doorstep in a matter of hours. Taking this into consideration, it’s essential to look at the current apocalyptic statistics on brick-and-mortar store health and what your brand can do to survive.
In 2019, a record-breaking 9,300 brick and mortar stores were shut down — a 59 percent increase over 2018 — and retail layoffs were up 92% last month. Macy’s recently announced 125 store closures, and 2,000 staff layoffs through 2023. Additionally, in January, Opening Ceremony, Express, Papyrus, and JCPenney all announced they will be closing down over 300 retail locations by the end of the year.
As retail brands shift to navigate the changes in the industry, valuable categories like customer experience budgets are being slashed amidst this reactionary belt-tightening. However, the companies that will survive and even expand during this time are thinking creatively, doubling down on customer satisfaction and looking at the upside: brands can now access global audiences — just in a different way than previously familiar.
If the audience is bigger and broader, perhaps we don’t need so many localized storefronts after all. Now, more than ever, it’s critical to embrace a strong e-commerce strategy.
Staying competitive to survive this retail apocalypse requires a completely new mindset and a new holistic understanding of customers and their shopping experience wants and needs must be prioritized.
In the midst of the current retail apocalypse, here are four shifts companies are making that actually pay off:
1. Heavily invest in digital channels
Brands that didn’t survive cut corners on digital budgets, while those winning are investing correctly in e-commerce and the best online retail tools. Often, e-commerce overhead is significantly lower than brick-and-mortar and, if properly executed, could skyrocket your sales figures. Brands that opted for budget solutions pay the price later on as they struggle to keep up with competitors who did it right in the first place. Invest in only the best online retail solutions from the get-go to save valuable time and resources further down the line. e-commerce isn’t going anywhere.
2. Give online customers white glove service
Companies that are winning are providing customers with convenience, a smooth shopping journey, and incredible service with a personal touch — even while shopping online. These brands put customers in touch with a real person who lets customers know they’re valued and is there to assist at any point of the shopping journey — from making product suggestions based on customer preferences, to providing discount codes to hesitant customers. This is the “white glove” service shoppers are used to when shopping at luxury brick and mortar stores, except transferred online. In fact, successful brands retrained in-store staff for their online customer service team, given that these teams tend to be well-educated on product information and in creating a personal customer connection.
3. Focus on a more curated product line
Successful brands are doubling down on the products customers crave, a move that less successful brands who panicked and expanded into a variety of product offerings without proper market research wish they’d thought of. For example, Express has chosen a product-first approach — called “The Express Edit” – which, from its press release, is said to “result in a curated assortment reflecting versatility and consistent newness.” This will allow Express to deliver great products in every vital category and to personalize their customer communication around each. Focusing on the items and departments your customers turn to you for is the best way to maximize your use of real estate, rather than wasting space and resources on more items that you and your customers aren’t really sure if they want or need. Sometimes less is more.
4. Pivot real estate and focus on experiential
Even in the middle of a retail apocalypse, brick and mortar stores are not completely going to disappear, instead, they are being redefined. For example, Macy’s successfully chose to maximize the use of their best real estate to focus on their boutique, luxury elements that have proven successful. JCPenny has created a new experiential retail “lab” with a selfie studio, barbershop, and other millennial-friendly features in an effort to reinvent itself. While Target reformatted local stores into distribution centers, which helped cut down waiting periods for online customers
Yes, change is scary and constant store closures can invoke panic. However, the evolving retail landscape does not mean death to your favorite brands. Instead, it provides an opportune time for companies to re-envision how best to achieve critical success in 2020.
Hadar Paz is CEO of Powerfront.