How to Think About the Future of Retail
Many believe that “retail is dead.” Now that you can order an avocado off Amazon and online shopping is far more convenient than hitting the local mall, people look at brick and mortar stores as a thing of the past. But how true is this statement, really?
According to the U.S. Census Department, U.S. retail sales grew by 0.2 percent last year, and online sales grew by 11.5 percent. This is to be expected, simply because of the ease in ordering with the click of a computer mouse and the wide availability of options available. And, more deeply, with so many hours logged on social media and the rise of targeted ads, it’s easier to find what you didn’t even know you were looking for.
But before we can proclaim that retail is really, truly dead, there are many brick and mortar stores that are rethinking their business plan so they can stay afloat. It’s hard to conceptualize a future that is solely digital, and knowing this, stores are brainstorming new and improved strategies to stay relevant. Here are some ways to think this through.Related: Examples of Retail Business Ideas
1. Retail stores will emphasize their experiential aspect
Stores that offer their customers an authentic experience still create a thrill. Build-A-Bear, for example, is more about the creativity and expression of creating a stuffed animal, which makes it significantly more fun than ordering one online. This is also why they can charge more.
Other stories are incorporating these experiential aspects. Woolrich, a European clothing brand, recently opened an experiential store in Milan, Italy. It includes a lounge area to sit and drink an espresso and a winter garden. When experiences like these generate word of mouth and invite in new foot traffic, retail sales increase. The more that retail stores can increase the combination of their products with these experiences, the better.
2. Retail stores must encourage people to get out of their homes
Despite the love for convenience, few people enjoy staying in their homes all day. But with so many entertainment options, there must be something compelling about your retail location that causes them to make the trip. Yonah Ghermezian and his family are launching the $6 billion American Dream Mall in New Jersey, and their vision includes a water park and amusement park, aquariums, fountains, light shows, an ice rink and an indoor wave pool. It's a step beyond the retail experience we've grown accustomed to. Ghermezian has remarked that the key in business is knowing people want to be entertained and creating an experience so exciting and entertaining that they leap at the chance to get out of the house.
3. Retail will still provide consumers with control over what they buy
Finally, remember that there are certain items that customers want to see with their eyes and touch with their hands before they purchase. Going back to the avocado example, many will always prefer to pick their own produce at a local grocery store rather than order it, just as many would prefer to try on their clothes rather than trust a size chart when ordering that new pair of jeans.
To that end, Ghermezian's American Dream Mall plans to house retail stores that feature built-in runways, throw shows, augmented reality experiences and digital mirrors that allow customers to try on several outfits and be recorded as they do a 360-degree turn for comparison. Customers will even be able to send the comparisons to their family for feedback via SMS or social media to make a purchasing decision.
As long as customers have specific preferences, which will inevitably be always, they will need the in-person, retail experience. Rest assured that retail will never fully die as long as customers want a degree of control over what they’re purchasing and as long as retail stores incorporate experiential aspects that keep them intrigued.