2017 is starting out with some ugly news on the retail front.
Admittedly, it was a strange moment for me. On the one hand, there were many disturbing pieces of news on the retail front, about department store giants Sears and Macy's. On the other hand, I spent time at many large retail spaces in Florida over the Holiday season, and could not believe the amount people, line-ups, difficulty in finding parking and general happiness of crowds that the local shopping malls, some big box retailers and even some massive outlet campuses were experiencing. I'm no fan of the "Market Of One", but it was hard to not be perplexed by these two divergent experiences that were happening at the same time.
Let's get up to retail speed with some of the news via Business Insider:
- A giant wave of store closures is about to hit the US.
- Macy's is closing 100 stores - here's where they will likely shut down.
- Inside Sears' death spiral: How an iconic American brand has been driven to the edge of bankruptcy.
- Plus you can grab their free retail report: The Future Of Retail 2016.
Go ahead, take a look at those links... I will wait for you.
Everyone wants to know what is happening. Many will blame digital transformation, the growth of e-commerce and even directly point the finger at Amazon. It's not about that. It's about access. Access is an important concept that many of these brick and mortar retailers are not thinking about. Worse, they're probably taking it for granted, because they had it for so long. What purpose did these massive retailers provide, as they paved over (and through) the mom and pop shops that lined Main Street in the average American city as our civilization evolved? These big brands came in and offered a larger selection of products at a cheaper price. Because of their size, they were able to negotiate more powerful real estate deals, price push on their suppliers, and develop more intricate supply chain logistics. In short, they enabled consumers to have access to more products at cheaper prices.
Online commerce destroys that. Period. End of sentence.
If you spend some time with that Business Insider The Future Of Retail 2016 report, you will see one thing: while e-commerce is still very small, in relation to in-store retail, nearly all growth in the retail industry is coming from online sales. More access, more variances in pricing and more. That "more" also happens to be an ever-growing digital consumer.
So, what is the new "access"... and why should your brand care?
Whether you're a retailer or not, you need to understand what these consumers are now looking for. They do not go to a shopping mall, an outlet complex or a big box store for access to products and prices. They can - in effect - get that anywhere (and this includes online... and on their smartphones). The new "access" is service, convenience and experience. In my "market of one" holiday shopping experience, people weren't strolling through the mall looking for the best price. People were there to have an experience. To be around other people. To show off their clothes... whatever. When they were shopping, they were not looking forward to long lines at the cash. When they were shopping, there were looking for better service (something that is non-existent - for the most part - online) and, because they were at the physical store, convenience (meaning: "how easy is this retailer making it for me to buy it now, instead of buying this stuff on my iPhone, and having it show up at my house, so I don't have to carry it around with me now?").
Brands needs to think more about creating this "access" for their consumers (whether they are retailers or not).
Price and selection have become a commodity, because of the online channel and globalization of business and access to information. Look at the state of retail. Think about your brand. What is your brand experience like? How golden is your service? How convenient is it to work with you? Nothing truly new here, that you would not learn from any brand leadership business book from the past few decades, but still it's a visceral experience to see it happen in action at the mall. While Macy's (and others) let go of staff and cut the experience at their physical stores, what will they do to circumvent that experience in the stores that are left... and their online experience... and for the sake of their brand? Perhaps the more elegant question about the future of retail, is a more elegant question that all brands need to ask...
How well does your brand define and provide "access" to your consumers?