Has your local mall been boarded up yet? Not a store left open, tumbleweeds blowing across the empty, cracked parking lot? Isn’t Amazon forcing all the malls to close down?
Oh... you were just there yesterday and struggled to find a parking spot? We had a feeling that might be the case. See, despite all the talk, the great retail apocalypse just isn’t the doomsday some analysts expected.
The phrase “retail apocalypse” refers to the idea that we are entering an age of online retail domination. Picture brick-and-mortar storefronts becoming extinct as delivery trucks are working around the clock to deliver an endless stream of online purchases.
The problem with this picture though is that the data doesn’t agree. Online retail is undeniably on the rise, but traditional retail stands resilient. For instance, online sales on Black Friday this year were up 16.9% as compared to last year, but in-store foot traffic was estimated to have only decreased by less than one percent. According to Goldman Sachs, in-store sales currently account for 85% of all sales, and over the next five years, we will see brick-and-mortar stores retain 70% of all retail sales.
The narrative around the retail apocalypse often focuses on the number of stores a retailer is closing or major layoffs that occur in the industry. What you don’t hear about is that over 4,000 new retail locations opened in 2017. Physical retail has a certain invincible appeal. Many consumers still prefer to actually handle a product before making a purchase, while many others enjoy working with knowledgeable sales associates and having fun in-store.
Retail may not be dying, but it is definitely evolving. Now that consumers have so many alternative options in terms of brands, platforms, channels, and fulfillment methods, retailers have to adapt to survive. PwC’s 2017 Total Retail Survey offers data-backed suggestions for how to adapt to retail's changing landscape:
- Focus on mobile: Mobile devices are a powerful tool for making purchases both online and in-store, with 35% of respondents saying it will become their primary purchasing tool. Consumers also expressed a preference for an optimized mobile site rather than a simplified mobile app.
- Invest in great talent: Up to 78% of respondents expressed a desire to work with sales associates who have expert knowledge of a product line. There is simply no replacement for a sales experience that is hands-on and in-depth, especially when it comes to consumer electronics.
- Customize your sales: The quality of the sales experience matters more than the location. Receiving personal offers, whether in-store or online, matters to 59% of today's retail consumers.
- Celebrate loyalty: Many consumers are not eager to abandon stores or brands in favor of something newer or more high-tech. In fact, 61% of shoppers consider themselves loyal and maintain long-term allegiances.
- Focus on aesthetics: Retails stores must be as convenient and accommodating as their online equivalents. They can stand out and create unique value by being more comfortable, engaging, and entertaining. An inviting ambiance is important to 59% of consumers.
For any wireless retailer still worried about the retail apocalypse, just consider that T-Mobile announced plans to open 1500 new physical stores—that's more than any other retail brand. If anything, the retail marketplace is getting more crowded.
We’re confident a retail apocalypse isn’t on the horizon, but we do believe the landscape is shifting. While some stores are opening more locations, others are changing their approach to retail and shifting online. Imagine a world where brick-and-mortar stores no longer existed. It might be convenient to have everything you ever purchased delivered to your home, but the social element of shopping would disappear, returns and exchanges would skyrocket, and the unique allure of shopping would be lost. We believe neither retailers nor shoppers are eager for that future.
If your store is laying the foundation for the future, iQmetrix can help. Our solutions are designed for wireless retailers to optimize the in-person experience while leveraging omnichannel. Want to learn more?
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