In 2019 top retail brands announced more than 5300 store closures in the US alone. Brands like JCPenney, Gap, Victoria’s Secret, Tesla, Charlotte Russe, Family Dollar, Abercrombie & Fitch, Chico, among many more, have confirmed they are planning to close a number of stores under their brands in a period of 12 to 36 months. And that was even before the global COVID pandemic. The number is likely much higher now.
Imagine a world without retail. Terrifying, isn’t it?
But what brought about this phenomenon?
Apparently the brands are experiencing a massive slow down in their same-store sales. Many reporting a drop of between 2% – 4% in their physical stores’ revenue, which drove them to the conclusion it’s no longer worth keeping the venues open.
Is there a way to save retail?
It turns out there is.
While some have filed for bankruptcy and are looking to liquidate their remaining stores, others are moving their business online. It is true that more and more people are turning to online shopping and many brands have already started to implement strategies to make them more competitive in this new trend.
Tesla has announced they are planning to move to an online dealership scheme – it’s not yet clear how that’s going to work but it’s where the company’s headed. Walmart already implemented their order-online-pick-up-in-store practice, as well as their delivery to door service.
Not to mention Amazon’s delivery vehicles “flying” around cities all over the world bringing customers their much expected goods.
Those are just some indicators that modern consumers prefer to do their shopping from the comforts of their homes using their phones or tablets.
E-commerce is dominating
In recent years it has become more and more evident that phones and tablets are increasingly becoming the preferred device for entertainment, education and - of course - shopping. Be that by installing apps or directly interacting on the company's website, consumers are making clear their preference.
And it makes sense. The so called millennials and gen-Z, who are widely considered to be tech-driven and shy when it comes to in-person interactions, are now a major purchasing force. They are the young professionals building their independence, buying homes, furniture, vehicles, gadgets and all sorts of spoils. As shy people, they would try and avoid having to talk to a sales person in a store, and instead they would look for products online, look for and write reviews, watch and record unboxing videos, etc.
So it’s clear where the next generation of shopping is going to be. That’s why brands will have to bring up their A-game when it comes to User Experience in their online stores and e-commerce platforms if they want to stay competitive.
The decisions brands make today will determine their success rate in the near future. How they offer and promote their online shopping experience will be key for gaining a spot among the top retailers.
Some questions top retail executives will need to answer are:
Do we need a Web store?
Do we need a mobile app store?
What e-commerce platform suits my business the most?
What kind of marketing campaign are we going to use?
The better the User Experience and the higher quality of the digital store, the better the user response would be.
Even though things look rather dark at the moment, with so many stark announcements week after week, the future seems bright. Thanks to technology we will still get to enjoy our favorite brands in a new way that will meet the preferences of the modern buyer.