The Big Box store experiment is failing and under heavy debt. Department stores are shuttering and everyone is claiming the retail apocalypse is coming… Not so fast! We are starting to see a retail revival and new models emerging coupled with consumer behaviour indicating a renaissance for independent retail to play a significant part of the consumer journey.
Retailer of the Future: Independents
For years, pundits have predicted the continued demise of independent retailers. The arrival of shopping malls and power centers drew foot traffic away from the neighborhood Mom-and-Pop stores. Next came the axe wielded by e-commerce giants, notably Amazon. And finally, we saw rents rise to levels beyond affordability for the independent retailers. With the likes of Sears and all these other big box stores closing the main beneficiary… Independents. If you want to get found and discovered by new consumers at owner operated retail locations now is the time to consider how you can partner closer.
Changing Demographics Set Stage for Retail Revival
Changing demographics and consumer preferences are signaling increasing desirability of smaller, curated and customer-service-oriented retail outlets. As rents return to more-affordable levels, smaller, nimbler and more-creative operators are likely to prosper.
Today, many millennials, retiring baby boomers and senior citizens want a more urbanized lifestyle in neighborhoods that offer mass transit and a range of services. A recent study by the Urban Land Institute indicates that 48% of all millennials — which now represents the largest cohort in history — live in walkable “city neighborhoods.”
These factors have very positive implications for the rebirth of urban neighborhood retail. Lower operating costs will attract smaller stores — as independent retailers target these urban locations, which boast pedestrian-oriented, street-front retail environments. At the same time, successful retailers will adapt approaches to attract the shopping public — creating unique shopping experiences that cannot be found online.
Customer Experience Matters
As a result, environments in which shopping is treated as an experience in its own right, will come to dominate the bricks-and-mortar landscape. Staff in independent stores are highly knowledgeable, ready with product information on suitability, materials and the production process. Increasingly, shoppers are once again looking for life beyond their computer screens — and this can only benefit the independent retailer, who is more inclined to offer a high level of interaction with the customer.
As urban commercial vacancies linger and rent capitulation takes shape, we will see some creative entrepreneurs filling current vacancies with new and innovative retail concepts. It should, in fact, be a very exciting time to be a consumer.
Impact on Sales Strategy
Some brands have left physical retail for dead to focus 100% online. Nike and Under Armour are proving this strategy is a fail. Specialty retailers are the chief influencers to get new brands found and discovered and as soon as they feel the partnership isn’t working, they move on. Working with independents is the best way to keep your brand at a craft status to remain relevant where consumers can connect in person.
Plan C: Retail as a Service
So if online isn’t the fix, and wholesale isn’t working, what’s Plan C? Retail as a service where brands partner online with independent retail. In this model dealers act as showrooms, order takers, last mile secure pick-up and delivery locations, with install/assembly, and of course local returns. The benefits are astounding leading to boosts in conversion, revenue, keeping spots in store with dealer loyalty and making it easier for consumers to buy in store or online.
A lot of consumer discovery happens offline as 93% of consumer shop in multiple sales channels before transacting. Coupled with the fact that those who browse in multiple channels spend more, the store and the value it brings cannot be ignored. Ask yourself the question, do you want to sell a lot of stuff and make more money addressing a larger market or do you want to sell less stuff and make some money addressing a smaller market online only?
Benefits of Independent Retail Channel
Most of these dealers consider themselves showrooms and are more willing to embrace innovative models that retail needs to survive. More margin is to be had at independent retail giving ample room to adjust margins for showrooming and a clicks to bricks strategy rather than stocking dealers. Independent retailers are more open to carrying innovative challenger brands consumers haven’t seen before. This creates an element of surprise and excitement for consumers to bring them back. Coupled with the fact the people in the store actually give a shit and provide better consumer experiences with knowledge, it is emerging as the place to be.
