The retail apocalypse may just have to wait.
Reports of the industry’s collapse have made business headlines for the past year, with one Business Insider article proclaiming, “The retail apocalypse has descended on America,” while a Bloomberg article claimed retail’s decline is “really just beginning.”
But despite predictions that more than 3,800 stores are expected to close in 2018, the death of retail, much like Mark Twain, may have been reported prematurely. Rather than a retail apocalypse, we may in fact be looking at a retail renaissance stemming from the recent waves of massive transformation in the sector. It is always darkest before the dawn, after all.
That doesn’t mean it’s suddenly smooth sailing for retailers. Rather, they’re going to have to work on the customer experience if they want to capitalize on opportunities for growth.
The retail apocalypse is on hold
Despite headlines painting a bleak picture of a coming retail apocalypse, there is data to support that the industry is poised to grow. The road to a retail renaissance, however, may be starting off a little rocky.
In fact, retailers such as Target, Walmart, Nordstrom and Home Depot all reported growth in both brick-and-mortar and e-commerce sales, and Deloitte is pegging the retail industry’s growth at 11.7% between 2017 and 2022. Meanwhile, IHL Group recorded a net increase of 4,000 new store openings in 2017—a far cry from a collapse. Finally, consumers are feeling pretty good about the economy with 59.5% confident or very confident as of January 2018, according to the Consumer Mood Index. High consumer confidence is always good news for retailers.
“For retailers, surviving and thriving in this environment may require adapting sales strategies and value propositions to align with consumers’ economic well-being and needs. As always, determining what matters most to the customer can provide a clear path forward.”
– Deloitte in The Wall Street Journal
These stats all suggest that there’s massive opportunity in the retail industry right now, but it’s still a competitive landscape with disruptors lurking at every turn. To win in the long term, companies need to really understand their customers—insight is key, according to experts at Deloitte. Understanding what customers really want is what will provide competitive advantage.
4 paths to sparking a retail renaissance
If you want to thrive in age of disruption and digital transformation, you need to look forward while always keeping an eye on the retail customer experience—both by improving and learning from your mistakes. If the retail apocalypse is to be avoided, companies should obsess about four activities:
1. Create a better in-store experience
Retail expert Doug Stephens says brick-and-mortar stores can help drive revenue by delivering memorable experiences to customers. The retail futurist firmly believes the store itself, the physical space owned by a brand, is not out of commission yet. Its role in the purchasing decision may have evolved to distribute experiences rather than sell products. Customers are less and less likely to visit a store simply to buy, and more and more likely to visit a space to have an experience with the product to make a buying decision—albeit through an online channel instead.
2. Focus on growth
When times are tough, the inclination is to batten down the hatches and cut costs, but the key to avoiding the retail apocalypse is to pursue growth. And now is the time, according to Gene Lunger of Ashley HomeStore. Although major retailers such as Toys ‘R’ Us closing down, it also means there’s plenty of square footage space for other retailers to expand today. Lunger sees an opportunity to expand brick-and-mortar locations with a strategy that includes memorable experiences, and at a lower cost than before.
3. Get closer to your employees
If want to understand your customers better, look no further than those they interact with. Your employees are an important source of insight because they are exposed to customer feedback every day. And if customer experience is the sum of all interactions that customers will have with your company, then employee experience is your workforce’s relationship with your business. Delivering a better experience to your employees will help them improve the customer experience.
4. Fail fast
Tough times shouldn’t keep you from taking risks, as long you make mistakes you can learn from. Lunger believes retail companies must experiment to help customers take the path of least resistance, and because things change quickly, it means failing fast to learn. It’s especially important to embrace new technologies and processes to solve customers’ problems, according to Chris Hansen of TGI Fridays—embracing technology is key to survival in retail.
Prioritize insight and the retail customer experience
Retailing is never going to be easy again—if it ever was—but predictions of a retail apocalypse is overblown. And if it’s true that an optimist always sees opportunity in adversity, then a retail renaissance is only possible if companies take advantage of insight and improve the retail customer experience with the understanding that constant disruption and transformation is the new normal.