Store closures. Amazon eating up e-commerce. Consumers embracing technology. It may seem as if retail’s days are numbered, but this alleged apocalypse may be a transformation—for the better.
At the WGSN Futures Summit in New York earlier this month, designers, retailers and other industry members discussed the so-called retail apocalypse and how the industry can collectively combat this period of uncertainty.
Even though many stores have shuttered this year, there could be a silver lining to retail’s apparent “demise.”
According to WGSN, U.S. retailers have opened or planned to open 1,236 more locations than they will be closing and 42 percent of retailers have added more stores in 2017. The transformation of retail’s store footprints may be attributed to three major factors—shifting business models, right-sizing (balancing offline and online operations) and more meaningful consumer experiences.
To stay competitive, retailers have been pursuing other offerings and experiences.
Nordstrom recently opened a new type of brick-and-mortar format, which doesn’t sell any merchandise—it only provides consumer experiences. Dubbed Nordstrom Local, the new California-based Nordstrom location lets consumers pick up online orders, get tailoring and personal stylist sessions and even have a manicure. Retailers are realizing that to succeed in today’s market means more than just pushing a product. They have to appeal to consumers’ personal needs.
Reducing brick-and-mortar footprint has also become a priority for retailers during this transformation—and some are going the extra mile to not only reduce their store headcount, but develop smaller stores with more curated product stories.
“It’s about right sizing not just downsizing,” said WGSN senior retail editor Sidney Morgan-Petro. “What we are going to see is fewer, smaller stores.”
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Morgan-Petro went on to explain how retailers, including Target, have switched gears and created additional smaller-format stores in urban areas to provide consumers with a convenient shopping option and a store that’s easier to navigate, without multiple escalators and irrelevant store sections.
“For Target, these urban stores have more than double the revenue per square foot of their larger stores,” Morgan-Petro added.
More than just shrinking some of its stores, Target is also revising its apparel offering. The retailer recently nixed its timed-out apparel brands and introduced new options in multiple categories— including kid’s line Cat & Jack, print-focused womenswear line A New Day, activewear line JoyLab and modern classic men’s line Goodfellow & Co.
Elevating consumer experiences has taken top priority in retailers’ market strategies.
Apparel retailers might stand to glean some cues from retailers in other spaces—including travel, technology and wellness—on keeping consumers engaged.
Away, a travel luggage company, endeavoring to be the brand that comes to mind for all things travel, has made its stores more than just a place to buy high-tech luggage. At its brick and mortar location in New York, consumers can have free coffee and browse travel books when they come in to shop. And both in-store and online, Away try to draw consumers entices consumers with travel accessories beyond it’s luggage line, adding to the convenience for a traveler. More than that, Away also hosts podcasts about worldwide destinations and travel tips to keep consumers engaged.
Morgan-Petro said retailers will need to keep delivering these heightened, more curated experiences and join the other purveyors who have made going to the store more than a conventional trip to pick up product.
“If you can’t beat them join them. If it’s experiences they want, give them things that go with their experience,” Morgan-Petro said. “Don’t compete with the competition.”