Death of the store? Not buying it
If we say, “Let’s do some shopping,” do you grab your car keys … or whip out your smartphone? Judged by the numbers, your new favorite mall may be the couch.
Internet and catalog sales are up 10 percent over the past year, while department store sales have sagged. Macy’s, J.C. Penney and Nordstrom all say 2016 got off to a terrible start. “Just like bookstores and music stores and hardware stores before them, apparel retailers are underestimating how fast Amazon is going to eat their lunch,” retail consultant Joel Bines told The Wall Street Journal.
Hmm. The world is changing quickly, but don’t buy into all the hype. Or trade in your hands and feet for an extra index finger just yet. What’s happening now is the cusp of a major shift in how Americans make everyday purchases. Consumers see the Amazons of the world getting bigger (that company’s latest reported expansion: its launch of a private-label grocery brand). And they see lots of casualties among bricks-and-mortar players (latest Chapter 11 victims: Aeropostale and Sports Authority).
What’s unlikely, though, is a future in which tumbleweeds blow through Main Street. Stores will survive. Only the savvy ones, perhaps, that give consumers what they demand — desirable products at competitive prices. Shoppers also expect excellent customer service and convenience, which means they insist on options: to be able to order just about anything online at 3 a.m. from bed, or to pull into a parking lot after work and pick up exactly what they are looking for.
In the old days, Marshall Field said, “Give the lady what she wants.” For the new digital universe, author and marketing expert Kit Yarrow updates the customer mindset to IWWIWWIWI — or “I want what I want when I want it.”
This construct — that there will be room in Americans’ shopping baskets for purchases from virtual and actual stores — makes a lot more sense than writing an obituary for the mall. It’s also a pretty exciting development for shoppers because competition and technology will push all players to be smarter, more creative and more responsive. Bill Rose, national director of Marcus & Millichap’sNational Retail Group, tells us the best bricks-and-mortar players will have you covered 24/7: Order online, pick up or return in store.
There’s also a reverse trend, in which Internet-based retailers open physical stores because they want to increase their reach to customers, and because their customers haven’t evolved (yet!) beyond having bodies. So it’s nice to feel a cashmere sweater, try on seven swimsuits or take in the ambience. That’s why Amazon is experimenting with mall bookstores (hundreds over time, perhaps). And why Warby Parker, an Internet prescription eyeglass company, will set you up with spectacles via mail delivery, or let you work with a salesperson at a sleek store.
There’s a lot riding on this revolution. Retail is a pillar of the U.S. economy, and nobody likes seeing vacant storefronts and jobs lost at the mall. Consumers have a soft spot for their favorite stores but no patience for lazy management. Some browse a store but then find similar products online that are cheaper but just as good; the visit is called “showrooming.” Maybe that’s betrayal. Or maybe, as Rose suggests, “Loyalty is the absence of something better.”
Executives at Nordstrom, one of the best-run U.S. retailers, are adapting. After getting creamed by competition in the first quarter, the company’s co-president, Pete Nordstrom, laid out a no-nonsense response: “We’ll be pragmatic and conservative with our plans, but we’re going to be aggressive about trying to figure out new ways to get customers excited.”
Shoppers demand nothing less. So surprise and delight them, retailers. If you do, they’ll reward you.