2017 has been anything but kind to retailers. Fung Global Retail & Technology projects 9,452 store closings before the New Year dawns.
That’s a 361 percent year-over-year increase and 53 percent more than the number of stores shuttered during the Great Recession in 2008.
The closings are hitting many of retail’s biggest names, including Macy’s Inc., Sears Holdings Corp., J.C. Penney Co. Inc., Abercrombie & Fitch Co., Ralph Lauren Corp., and the J. Crew Group. And the closings are expected to continue well into 2018.
Retailers: How to Stay Relevant
So what’s the answer? The National Retail Federation (NRF) has some concrete suggestions on what stores need to do to survive in 2018.
All of them revolve around creative collaborations and strategic partnerships “to drive consumer relevancy and business viability.” Moreover, they underscore the importance of brand experience. As the NRF notes,
“The path to consumer nirvana in 2018 will consist of unique experiences, transparency, operational efficiencies and a vigilance on reducing pain points in the shopper journey.”
In short, retailers need to reassess, accept the way customers shop today, and commit to simple, efficient, customer-focused strategies. Here are seven ideas to consider, culled from the latest work of leading analyst firms.
Accept Omnichannel as an Expectation
Because omnichannel is evaporating as a strategic advantage for stores, retailers should focus on making in-store experiences more efficient and engaging. They also need to differentiate their offerings and offer more value-added features, ranging from sales staff with exceptional product expertise to unique events and promotions.
“Successful retail in the digital age isn’t just about “how to respond to Amazon” but more about how to stay on top and ahead of the wave of innovations hitting retailers.” — McKinsey
Move Customer-Centricity Beyond a Buzzword
Do you know what your customers want, need and expect, and are you dedicated to providing that? Do you measure your brand and employees’ performance based on how customers feel or do you only reward efficiency and profit?
“Dedicate your brand to doing what is right for your customer, and they will notice, trust more, and become loyal.” — Gartner
Start With Outcomes in Mind
Your digital investments need to target your customers’ desired outcomes. As Arke CTMO Chris Spears explains, “We ask our clients to focus on the business problems they hope to solve. Once the objectives are clear we help them develop a strategic plan to drive desired actions,” Wise said.
“Then and only then can we determine the best ways to use and integrate digital technologies.”
To succeed, retailers have to address both the customers’ explicit demands as well as their hidden aspirations or unvoiced problems.
“To maximize the value of transformational investments, investment plans need to clearly focus on customer expectations. Cultural transformation sits at the center of this endeavor.” — Forrester
Invest in Strategically Important Technology
New technologies such as augmented reality and artificial intelligence offer great potential for better brand experiences. But few retailers today are using them effectively.
To maximize technology investments, act strategically, focusing on opportunities that improve your brand experience.
“Focus on the fundamentals, like how to move faster and smarter. Getting this process right can help retailers turn their technology wish list into a reality that delights shoppers.” — Bain & Co.
Face Online Realities
Yes, some 80 percent of purchases are still expected to happen in stores in 2020. But we’re at a watershed moment, with online expected to edge out in-store this holiday season, according to analysts including Deloitte.
Deloitte expects it to capture more than half (51 percent) of anticipated spend, with in-store purchases accounting for about 42 percent. The remaining 7 percent of sales will occur through channels such as print catalogs and direct mail promotions.
“The retailers most likely to survive amidst the rising tide of online purchases are those that can provide a tremendous variety of offerings while maintaining a more personalized level of customer engagement than their competitors, regardless of the interaction channel.” — Deloitte
Keep It Human
Even in a digital world, customers crave emotional connections. In fact, 83 percent of US consumers prefer dealing with human beings rather than using digital channels to resolve customer service issues.
“Make it easy for customers to fluidly move from digital to human interactions to get the experiences they want.” — Accenture
Extend Your Brand Experience Post-Purchase
Six in 10 customers described their post-purchase experience as underwhelming. And almost as many (56 percent) said they were disappointed with after purchase service from retailers and ecommerce sites, according to a recent study from the CMO Council. Only 17 percent of consumers believe retailers care about their experience after they make their purchase.
“Consumers feel brands mostly forget about them after they have purchased a product. They feel most manufacturers and retailers aim only to sell a product, at which time they might arm consumers with a stack of paperwork (that will likely be shoved in a drawer somewhere) and a 1-800 number to call if something goes wrong.” – CMO Council
Atlanta-based Arke develops strategies and implements digital technologies for better brand experience for your customers.