There's a 'dirty open secret' in retail -- and it's killing Macy's and Gap

Macy’s, Gap, Nordstrom, and J. Crew are all battling plummeting sales.

It’s getting harder than ever to persuade people to visit physical stores with the rise of online shopping, Forbes contributor Barbara Thau writes, calling falling foot traffic a “dirty open secret” in the industry.

The threat of online shopping is becoming particularly ominous for traditional apparel retailers, as Amazon cuts into the apparel industry market share, posing a major threat to stores.

This has become a death knell to traditional retailers who have long depended on in-store traffic to keep sales afloat.

Macy'sMallory Schlossberg/Business InsiderInside Macy’s in Herald Square.

Retailers are now looking for ways to become “Internet proof,” Thau writes. It’s well known that millennials are looking to purchase experiences, so it shouldn’t be too surprising that malls are looking to ways to add things that seem like experiences — like gyms or restaurants, as Thau points out.

As further proof of this trend, Whole Foods’ latest venture, Whole Foods 365, is trying to turn its stores into a “hangout” destination.

Not all apparel retailers have caught on to that trend yet, though some brands have innately built community and experiences into their strategy.

Brands have been able to translate shopping into experiences are the ones that are thriving (comparatively speaking, at least) in an otherwise difficult time. Lululemon hosts in-store classes and Nike hosts events like run clubs, both of which fosters a sense of community.

Macy’s is trying to do something along those lines, too. The company has apparently realised that it needs to excite consumers to boost traffic.

“Let me start with we absolutely agree with you that we need to work hard to make the bricks and mortar experience a lot more exciting and we’re working on that and trying to test some concepts, one of which actually is the whole health and wellness,” Macy’s CFO Karen Hoguet said on a recent earnings call.

Macy’s is currently testing out a new prototype section of a store in Ohio that will make shopping more experiential and upscale, with personal shoppers and a spa.

The department store giant has also launched off-price sections in its stores to help boost traffic; however, it’s largely annihilated its reputation as a premiere retailer and signalled that there are other problems in the apparel industry, like incessant discounting.

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