- Retailers view the holiday season as a critical time for attracting customers.
- Experts are split on the strategies that retailers need to prioritise, but they agree that they have to make their websites and stores work together.
- Retailers have to learn to anticipate new trends, or they will always be falling behind.
It’s a difficult time for retailers. As companies close stores and file for bankruptcy, many are wondering what they need to do to survive. The answer is unclear, even to the experts they’re hiring to modernise their business models and strategies.
Business Insider spoke to the founders of two digital consulting firms: Lyde Spann, who has consulted for Zara and New York’s Museum of Modern Art and runs Netamorphosis, and Aaron Shapiro, who has worked with Nike and Gucci and is the CEO of Huge.
Each had different opinions about what retailers should prioritise to remain relevant, but they agreed that retailers need to impress customers whether they’re shopping in-store or online.
Retailers can’t ignore brick-and-mortar
“A lot of people are going to research online and then buy in a store, or they’re going to look at a store to showroom the product, and then they’re going to buy online,” Shapiro said. “These distinctions are getting more and more blurred as people start to shop in a much more holistic way.”
The retail apocalypse has hit companies with large brick-and-mortar operations hard, leaving them skittish about opening new stores.
But despite the fact that over 6,400 stores are expected to close this year, the problem is perhaps not with the concept of the store itself, but in how they’re being used. According to a recent study from BigCommerce, consumers are likely to spend 28% more in stores than they do online, which means that retailers who can offer compelling reasons to visit their stores have a lot to gain.
“Walking through the doors of that store, there are a lot of opportunities to inspire purchase behaviour and to captivate that consumer’s attention,” Spann said. “You really have an opportunity to sell, not just for this one item that they wanted … you have an opportunity to sell things they didn’t realise that they wanted from you.”
To make sure customers increase the size of their purchases, Spann said that stores need to master the fundamentals: smart, attentive salespeople and proper inventory levels.
She cited the latter as one of the biggest problems retailers have faced, particularly big-box department stores that have shifted too much inventory to their online supply centres.
“I actually think in some cases, it’s more important to have [inventory] in the store, and then to be able to ship to the consumer from that store if they happen to purchase it online,” she said.
Another way that retailers can engage customers is to make sure their stores and websites offer unique, differentiated experiences. This means that retailers can’t just close stores to save money and put all of their inventory online.
“When you think of e-commerce as fulfillment, you’re going to lose, because Amazon will fulfil better than you ever can. You’ve got to go beyond just, ‘Here’s a place to buy my products,'” Shapiro said.
That means focusing on the specific strengths that brick-and-mortar and online retail each provide. Shapiro said that retailers should use stores as spaces where customers can try out products and websites as storytelling platforms that create emotional resonances between the brand and its customers.
“Retailers have to service their customers,” he said. “And they have to service their customers where their customers are. I don’t think retailers have much power to push [customers] from one channel to the other.”
Both Spann and Shapiro highlighted Apple and Warby Parker as companies that have mastered the interaction between online and physical retail, with each using their stores to augment well-designed websites with services like eye appointments and personable repair consultants.
Retailers need to learn to anticipate
Of course, all of this is easier said than done. Even if retailers have the right ideas, they have to compete with well-funded giants like Nike and Amazon that have enormous amounts of money and talent they can use to quickly adapt to any changes in the retail landscape. This is part of the reason why big names like Sears and JCPenney are struggling to stay afloat.
“A lot of these retailers are very smart, but they’re dealing with the realities of how to manage a declining, legacy business … plus, they don’t have the talent to be like Google and Amazon, and now they have to be,” Shapiro said.
The lesson is that retailers have to learn to anticipate rather than react, or they will be caught in a cycle of damage control while their forward-thinking competitors get ahead. To thwart the retail apocalypse, companies need to make sure they’re always the most convenient option for consumers.
Shapiro added: “People are lazy. We want the simplest thing possible. The brands that meet my needs and solve my problems in the easiest, frictionless, simplest way are the brands that I’m going to want to interact with.”