Has the smoke cleared around this whole retail apocalypse business? Apparently so, going by a recent report. So far this year in the US, store openings have outpaced store closures. If that’s a good measure of retail transformation, what has it taught us?
Life after the retail apocalypse
Over the past few years, store closures have served as a sign of the retail apocalypse. Yet the hype around the demise of some big chains has clouded the big picture. For example, in 2017 in the US, there were actually more openings than closures. And in 2018, we’re headed in that direction again. Obviously, we haven’t seen the end of days for retail, just a shift in the nature of retail. So, what can we say about retail in the post-apocalypse?
Consumers behave differently
Technology is the catalyst behind the retail transformation. Over two decades, we’ve seen the rise of eCommerce, Amazon and mobile phones. With these new channels in place, consumers have had less reason to shop in stores. But only a little less.
Less local inventory needed
That difference in behavior may have spelled apocalypse for some big retailers. Every year, online sales growth outpaces in-store sales. With foot-traffic down, there is now less need to hold a lot of inventory in a lot of locations. The retail apocalypse has taught us to be smarter about how we allocate inventory to fulfill online and in-store orders.
Retail fundamentals still rule
That consumer shift makes retail fundamentals even more important. You have to give customers reasons to buy from you, and a great product is just the beginning. Your shelves and window displays, your customer service, and providing an overall great in-store experience is more important than ever.
More paths to growth
While technology changed consumer behavior, it's also opened pathways for retailers to grow. We've seen over the years businesses that have expanded from eCommerce into brick-and-mortar by way of showrooms and pop up stores. At the same time, traditional retailers have been able to reconfigure their models to reach more customers online.
The omnichannel works
Finally, we've learned that an omnichannel strategy really works. Click-and-collect, ship-from-store, cross-channel loyalty all work to keep customers shopping with retailers. In fact, for big chains most impacted by the retail apocalypse, the omnichannel strategy has been key to maintaining competitiveness.