Is retail dead — or is it in the process of radical reinvention?
Last year more than 7,000 stores turned off the lights for the last time. In a ruthless march up Main Street, e-commerce has taken over the delivery of goods and services, trading a smile and a handshake for two-day shipping. Given this trend, it’s easy to imagine a bleak landscape of dark storefronts abandoned by a willing population that’s chosen to retreat from their local commercial districts to the warm glow of Internet screens.
Or is that the whole story?
People have not, in fact, deserted retail. They have simply abandoned shopping missions more conveniently fulfilled online, and shopping experiences that are not compelling. What seems for many to be the swan song of physical stores is actually a remarkable opportunity for brands to rethink the role retail plays in people’s lives, and to reimagine the value their shop has in both today’s commercial environment and in the brand-customer relationship. (Actually, this is already happening, see Part Two of Rethinking Retail.)
Modern shoppers want adventures, encounters and cultural meaning, to be characters in their own stories. They’re even willing to pay a premium for it. It is especially evident with Millennials, whose hate of advertising and sales pitches, and inherent digital nativity, would seem to make them Exhibit A for physical retail’s demise. But have you ever seen the lines around Supreme on “drop” days?
So, faced with this new reality, can a store become a destination that is embraced and celebrated? New models for engaging customers and measuring performance are emerging, and we need a language to describe them. At Counter Measure, we call them Retail Genotypes.
Let’s start with a look at how Mass Retail brands have successfully engaged their audience in the past, and some of the challenges they face today.
The likes of Sears and the late Toys R’ Us built successful businesses driving shoppers into their stores with continuous advertising. Surely some customers still recognize and respond to inserts in print editions of local papers. Once arrived, shoppers are rewarded by a no-frills store experience, singularly focused on drawing foot traffic in, and moving product out.
The mass e-merchants follow the same playbook, only they’ve traded newspapers for search engines, and the shopfront for backlit screens. Mass Retail has been unable to offer anything that counters the slippery convenience of major e-commerce players like Amazon, or any benefits that would compel existing customers to stick with their stores, let alone cause new ones to embrace them.
Speciality Retail (think GAP or West Elm) was built on the strength of a store’s brand, mastery of product categories, and ubiquity of distribution (i.e always located at a mall near you). These companies continue to meet customers where they shop (in bricks and mortar + online), in an attempt to appeal to their customers’ lifestyles.
Yet there are contemporary problems with this approach:
1. The distribution model is costly and redundant — too many stores, considering the convenience of the Internet.
2. Using sales as a primary measure of a location’s performance is outdated — in a world where customers shop the store and order online, it’s brand allegiance that counts.
3. Mass marketing that appeals to customer lifestyles, relying on monolithic brand culture — this type of outreach lacks authenticity and depth to captivate today’s consumer.
Where these established Mass and Specialty Retailers are stuck in traditional, often outdated roles, the new wave of retail is pushing into new space. How? Read Part Two of Rethinking Retail, on digital natives and ways that bricks and mortar can be vibrant.
About Counter Measure
We believe brands are better when customers can interact with people, spaces and products in meaningful ways. We believe thoughtfully crafted, purpose-built experiences add value to brands in ways that other interactions can’t. That’s why we believe in the future of bricks and mortar. We believe it because we’ve done it. Stay Posted