3,200 retail stores closed in 2016. These included well-known brands who closed some of their locations such as Radio Shack, Sears, K-mart, Payless Shoes, and JC Penny. Prognosticators from every corner of the business world, including Warren Buffet, have sounded the death toll of retail as we know it. However, the key phrase here is as we know it.
Retailers will make a lot of mistakes, and many will fall by the wayside, but others will not only survive—they will flourish. All you need do is look at retailers who are growing and expanding their reach in today’s marketplace to find strategies that will thrive into the foreseeable future.
The Swedish retailer H&M is opening a new outlet down the street from our offices in Plainfield, IN at The Shops at Perry Crossing. H&M continues to grow, expand operations, and add new outlets while other retailers falter. How does H&M do this? It’s called fast fashion—bringing desirable high fashion to the public faster than traditional retailers. For Example, H&M announced they could deliver the latest Gucci fashion in 90 minutes. To achieve this, they have assembled a marketing team that understands cultural and fashion trends, created a streamlined logistic system, and have a trained staff that knows what they’re doing. What H&M has done is found a niche they can fill, one that serves the buying public. If we change fast fashion to fast retail what other fast niches are waiting?
“Cooperative enterprise just means folks working together to create a better product, service, or experience. It doesn’t have to be a complete business model offering a new way to do things. It can be improved relations and information sharing with vendors such as Zappos. Or it could be better communication with customers, and it could encompass more employee feedback and participation. If your business has vendors, employees, and customers someone in your industry will embrace cooperative enterprise. Will it be you?
Customers have become used to being in on things, being part of it. Products are segmented to fit their needs, they have a voice in the marketplace on Yelp, Google, and more; they expect to be listened to. This is good news. We don’t have to guess what causes our customers pain, what our vendors don’t like about our business model, or what motivates our employees. They can be part of the cooperative.” — How Will Cooperative Enterprise Affect Your Business?
Showrooming is when potential customers visit a retail outlet to check out, try on, or test a product, and then purchase it online from a provider other than the retailer they visited. One way to overcome this is by offering outstanding service and extras that an online retailer can’t match, How to Add Value to Your Product.
Another way to turn showrooming in the brick and mortar stores favor is to make the outlet the showrooming as well as the online ordering location. I was talking with a young friend and mentioned Service Merchandise; she’d never heard of the retailer. Service Merchandise was more than 50 years old when the retailer filed bankruptcy in 2002.
Part of their failing might have been that they were ahead of their time. They marketed catalog stores. When customers entered the store, they were given a form to write down the store code of products they wished to purchase. The outlets displayed the merchandise, but the products weren’t available for purchase at the point of display. Once a customer had made their choices, they checked out, and then waited at the product delivery area for their items, which were warehoused at the location. Applying this system to modern showrooming and online purchasing seems like a win.
Is it Time to Play Taps for Retail Outlets?
Is it time to bury the retail store? Not quite. However, it is time to look at outlets in a new way based on how they might serve the needs of the buying public. Yes, more than 3,000 stores close in 2016, but keep in mind that in 2008, when the economy struggled, more than 6,000 retail outlets closed. Store closings don’t signal the end of retail; the closings are part of the evolution of retail—survival of the fittest. At least today the economy is good. So, what do you see as the future of retail stores?