Can Retail Stores Reinvent Themselves?
Originally published in the September 2019 issue of Tampa Bay Business & Wealth Magazine.
It seems that every week there is news of another brick and mortar chain closing. This year alone more than 25 major retailers like Payless ShoeSource, Gap and Sears have announced the closing of stores or the filing of Chapter 11 reorganizations. More than 7,000 stores are scheduled to close so far this year, with estimates up to 12,000 by the end of the year, according to Fortis Business Advisors, a business advisory firm based in Georgia.
Online sales are undeniably shaking up the traditional retail industry. In fact, many might say they now prefer using online services for their shopping needs. If one wanted to he or she could have their groceries delivered by Shipt, pet food by Chewy, clothing picked by a stylist from Stitch Fix and satisfy about any other retail need through Amazon. It is, virtually, possible to never set foot inside of a brick and mortar store these days, pun intended.
Is this a new normal or is it a fad? It’s hard to tell.
It could be argued that in our fast-paced world people find it more convenient to simply press a button and have everything they need arrive at their door. Of course the service typically costs more but clearly, that is not a deterrent.
E-commerce sales made up around 10 percent of total U.S. retail sales in the third quarter of 2018, according to the U.S. Census Bureau. This is sizable in comparison to previous years, but obviously not the majority.
Adaptability must be the name of the game for retailers. The demand to provide a valuable shopping experience, both at their brick and mortar establishments and online, is undeniable. It’s not all about profitability anymore.
Publix is a fantastic local example of a brand that understands the ever-changing market place. Think about their tagline, “Where shopping is a pleasure.” Stop into a Publix and notice the employees’ attitude, the cleanliness of the stores and the quality of products, like their fresh meat and produce. It is intentional. Publix trains their employees to greet customers and ask, “did you find everything you were looking for?” They are trained to show someone where the milk is, not point in its direction. To offer a sample of their fresh sliced Boar’s Head cheddar cheese to a deli customer. This is to ensure that the experience of shopping still provides value to those that enter their stores to spend their time and money.
However, Publix also now offers online shopping via Instacart. If something is out of stock the customer will receive a notification with options of other similar products. Don’t want to do Instacart? You can order online and pickup outside the store in designated parking spots. No need to get out of the car, they’ll bring your items to you and load your trunk.
Amazon is a pioneer in the online shopping experience. The issue with Amazon is that it is just that: an online experience. For those who want to see and touch a product before purchasing it, or are hesitant to put their financial information online, there is no alternative. And of course there’s the impatience factor. What about those times you need something right now? When waiting a day, or two or seven, to get the item isn’t appealing or an option?
Brick and mortar isn’t going to become obsolete for this very reason. There will always be a need to shop in person. But those retailers that will survive need to be exceptional at both service and product, to distinguish themselves from everyone else. If retail businesses want to stay in business and not file for bankruptcy, they need to take a lesson from Publix.
