With many successful brands closing a significant number of stores this year, you might assume that this is a continuation of the struggles we’ve seen in retail the past few years. But taking a closer look, it’s clear that this is an evolution of retail strategy, as brands learn to adapt to an environment where technology is constantly affecting the way we shop.
Fewer Stores, More Concentrated Effort
Stores closing by the dozens might seem a last-ditch effort before inevitably filing bankruptcy, but that’s not necessarily the case. One clothing retailer is closing several larger flagship stores this year to focus on creating a more intimate experience with smaller square footage locations. Surprisingly, these smaller locations still bring in the same sales, if not better, than the larger stores did.
This strategy is one that many direct-to-consumer brands have employed recently, in an effort to be more efficient and focus on customer experience.
Other retailers who may not be planning for more boutique-style shopping locations are still being savvy when it comes to trimming the fat and closing underperforming stores.
Physical and Online Complement One Another, Not Compete
Though retailers have struggled in recent years to find their footing for physical stores that had trouble competing with e-commerce, we’re seeing a great blend of the two now.
Retailers are adopting in droves the latest hybrid trend: BOPIS, or, buy online, pick up in store. Rather than have one channel compete with the other for the consumer’s attention, the two work together to give customers the ease of shopping online combined with the convenience of getting their purchase the same day by picking it up in the store.
Despite the only fairly recent popularity of BOPIS across the retail board, already 67% of consumers have used it.
And BOPIS isn’t alone: another trend is BOSS (buy online, ship to store). This allows retailers to increase distribution efficiency and cost, and get customers in the store, where they might end up making an additional purchase.
Some retailers are experimenting with shipping online orders from stores. This cuts out the need to fulfill individual orders from a shipment center, though it hasn’t proven to be scalable yet.
And then finally, there’s ROPIS: reserve online, pick up in store. For products that shoppers want to experience in person (furniture, appliances) or try on (clothing), having the ability to choose what they want but not complete the purchase online ensures that it’s available for them in the store where they can take a closer look.
Personalization is Not an Option
Another notable find this earnings season is the drive toward better personalization in digital marketing campaigns. Advanced data analytics and insights tools are helping brands get a 360-degree view of their customers online, on mobile, and in the store, which allows them to deliver highly-personalized content across all channels.
Loyalty Comes in Many Forms
Retailers are paying close attention to their loyalty programs right now, and many have revamped those programs to make them mobile-based rather than the plastic card programs of the past. Some are charging a fee, promising big rewards to frequent shoppers.
Others are offering private label credit cards that reward shoppers for making purchases at the retailer with the card.
No matter what they’re doing to make their loyalty programs more appealing to repeat customers, they’re leveraging all the great data that these programs provide about customers’ preferences and buying behaviors. Armed with this information, it’s easier than ever to find a way to be relevant and useful to customers.
It seems the retail industry is starting to find its footing with digital strategy. Now that they’ve stopped seeing e-commerce as the enemy, we expect to see more innovative blends of physical and online shopping experiences.