The Dawn of a New Retail Age
Much continues to be written about the demise of brick-and-mortar retailing, department stores in particular. If you took many of the headlines at face value, you’d think only a handful of decayed and desolate stores (tombs, really) were hanging on by a frayed thread that Amazon will soon rip with its e-commerce clutches.
In the case of some Sears outlets, that seems accurate. The once venerable American retail institution is the poster child for what’s wrong with traditional stores. Its selection and format are staler and stiffer than a week-old bagel, and some locations look like a Third World flea market—after the hurricane blew through. Is it any wonder these former mall anchors are disappearing? In retail, you reap what you sow.
The New York Times recently ran an article, “Department Stores, Once Anchors at Malls, Become Millstones.” (How’s that for a doom-and-gloom headline?) Not surprisingly, online retailing was cited as the main reason the format is struggling, followed by discounters and fast fashion chains. The best analysis, however, came from the comments section. Mr. Anonymous wrote:
Visiting a department store used to be an experience. When you go into them now, they are almost empty of staff. There will be one manned register in some obscure corner. You will be asked to show ID if you want to use your credit card. You will be looked at as if you are insane if you want to pay with cash. Either way, you will be made to feel you are inconveniencing the lone checkout person. If you’re in a lower-priced store, the air-conditioning may not be working. There may be a shoplifter alarm that goes off every time someone enters. Why put yourself through this when you can shop online?
What Mr. Anonymous and the article didn’t mention is that the country is over-stored—a house of cards bound to tumble eventually. Online competition, which includes a growing number of brands selling direct to consumers, is just the biggest wrecking ball. Also overlooked in this article is the fact that store closures, while painful, are restructurings aimed at improving the overall health of sick retailers. Macy’s, Kohl’s and J.C. Penney haven’t said they are giving up on brick-and-mortar. Being leaner, nimbler and wiser should help their bottom lines and allow them to upgrade existing formats or invest in new ones. It should also be noted that many digital retailers are investing in physical store expansions.
Far from signaling the end of brick-and-mortar retailing, these changes represent the end of retailing as we’ve known it. It’s the dawn of a new retailing era, one filled with new technologies that will blend the worlds of online and in-store shopping seamlessly. It’s an exciting time! Resisting it is futile and counterproductive. Retailers must be willing to look in the (dressing room) mirror and ask themselves if they’re doing what it takes to remain relevant. And today that mirror should have an interactive touchscreen offering styling tips, information on what’s in stock and online ordering capabilities. Consumers expect sophisticated shopping interaction and service—just like they get online.
Gary Champion, president of Clarks Americas and the subject of this month’s Q&A (p. 18), believes technology is the key to enhancing the in-store experience. Despite the challenges, he foresees a leaner, healthier store landscape that includes plenty of independents. The tier, he notes, has already weathered department stores and big box dealers. And with the right mix of service, selection and technology, Champion believes independents can thrive.
This month’s profile (p. 24) of Towson Bootery is a good example. The second generation-owned family shoe store is alive and well—in a mall, no less! Owner Alex Rudolph and his daughter Stefanie are remodeling to accommodate growth and better serve their clientele. For 69 years (and counting), the store has seamlessly blended a selection of leading brands with expertise in “fitting shoes the old-fashioned way.” While new technologies are changing the face of retail, some bedrock facets remain as vital to survival as ever.
That aside, the near term looks to remain rough as many brick-and-mortar retailers reconfigure, reinvest and reinvent—all at once. Reality sometimes bites—hard. Then again, what doesn’t kill you makes you stronger.