LORETTA'S CHANNEL

Posted on Apr 14 2017

How to survive the death spiral of bricks and mortar retail

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Reading the dismal quarterly results, pointing to the continuous decline in traditional retail, it is easy to become skeptical about the future of bricks and mortar. The recent store closures, and bankruptcy filings could reinforce the popular belief that eventually physical stores will go away. The reality is that consumers and retailers need stores. But, everything about them needs to change. Stores full of inventory, with big brand outposts, and a few associates on each floor (I am not going to call them salesassociates because most of them do not sell) are quickly becoming irrelevant.

Established retailers need to completely rethink every aspect of their store strategy, as they face increasing pressure and competition by new entrants on an unprecedented scale. Companies with no retail heritage at all, which have come from other sectors, are now looking for new ways to reach consumers. They think about retail differently, and this will have a deep impact on the store of the future.

Brands like Tesla, Apple, and Blue Nile are re-defining the store experience, and based on their productivity metrics, proving a new approach is better for brands and consumers.  They share a common philosophy around no or low inventory, high-touch service and product knowledge expertise, and nearly 100% technology-enabled locations. Consumers are responding to these brands and their innovative approach, and consequently raising expectations for all others retailers.

Over the next few years, in an effort to survive the subsequent 10-20 years, retailers will need to re-evaluate everything from square footage, location and design, the number and type of employees, the technology being used, the service and payments process, the level of physical inventory and the way that products are merchandised.

This may seem quite daunting, here are three things to get started:

  1. Think beyond the traditional segments (apparel, shoes, accessories) as you evaluate space allocation, ramp up new categories and improve product adjacencies. Can you add a customized shoe station in your shoe dept.? A juice bar promoting health and wellness in your beauty dept.?
  2. Consider the addition of services to enhance a consumer experience in their store.  Do you have a nail bar or dry bar? Do you offer shoe repair or shoe shine?
  3. Create an environment that promotes engagement and loyalty.  Add a virtual reality screening room or experience. Sell flowers, wine and gourmet food to go.

Start doing this, and you begin to differentiate yourself, and thrive amidst the death spiral of traditional retail.

For more insights or strategic direction, contact Loretta at lorettasoffe@live.com

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Loretta Soffe - Principal

lorettasoffe@live.com