2017 has felt like a brutal year for the retail industry so far. Radio Shack, Payless, Gymboree, and many other big brands have announced over 6000 store closings since the beginning of the year.
This follows on the heels of a rough 2016 which saw companies like Sports Authority close their doors. Despite the rocky outlook, many retailers didn’t get the message about the ‘retail apocalypse’. In truth, more stores are opening than are closing in 2017, bucking the trend that analysts have been shouting from the rooftops. Companies like Dollar General and Dollar Tree are opening almost 2000 stores this year. The success of their model has been well documented in recent years, but this trend is not unique to the discount variety vertical. According to IHL group, the fast food sector will have added 2000 stores by the end of the year.
Is the Apocalypse canceled?
The short answer - not yet. But the trends are showing an industry that’s transitioning not tanking. Consumers aren’t hiding and they're not spending less. They are spending more at newer stores, and more than ever -- it’s just not at the same place they were shopping the year before. The change is dynamic, and most importantly, it's happening fast.
Brick and Mortar isn’t the problem
This is not to say stores don’t have problems. From staffing to the strategy behind merchandising, the challenge of creating a draw for customers is far more complex when you put an open sign on a door. Despite this, digital-first companies including Warby Parker and Amazon are making plays to grow their physical footprint as fast as they can, creating optimized buyer journeys that mirror their online successes.
Re-think how you can optimize the physical space.
Credo is famous for creating optimized shopping environments that take advantage of the small spaces in expensive markets. But retailers like Credo are learning it takes more to entice shoppers.
”Millennials seek more value out of products they choose to buy, thus they do much more research — viewing unboxing videos, searching Instagram posts and reading online reviews, for example — before making a purchase,” says Annie Jackson, chief operating officer at Credo Beauty. “Motionloft helps Credo establish attribution models that can measure online to offline traffic. Marketing campaign efficacy now has a KPI."
While it’s easy to look at the retail headlines and think the death of the store is inevitable, the truth is brick and mortar is strong in 2017. That means closing stores is not how you’ll survive; instead, it’s time to innovate and drive experience.
Motionloft can help you make confident decisions