Shopper Marketing - May 2018 - 16

SPECIAL REPORT

16

SHOPPER MARKETING MAY 2018

Retail is Dead -
Long Live Retail!
Now is the time to decide
what the future looks like
for brick-and-mortar stores.

N

By Michael Applebaum
ot long ago, it would have been heretical to suggest that physical stores
could go the way of the dinosaur. But
over the last 18 months, an endless
wave of negative news coverage of the
so-called "retail apocalypse" has created the impression that any retail business that
relies more on concrete than clicks for its sales is
doomed to irrelevance, if not extinction. A Business Insider story late last year summed up the
prevailing wisdom: "Brick-and-mortar retailers
are caught on the wrong side of the digital shift
in retail, with many stuck in a dangerous cycle of
falling foot traffic, declining comparable-store
sales and increasing store closures. Over 8,600
retail stores could close this year in the U.S. [an
estimated 7,795 closed, per UBS], more than the
previous two years combined."
Such blanket statements, while true, paint an in-

complete picture of the state of the industry. Yes,
this country has too many stores. There are 22 billion square feet of retail in the U.S., or about 68
square feet for every man, woman and child. (The
next closest country is England, with three square
feet per person.) But there's another side to the
story. First, let's try to separate fact from fiction:
■ The vast majority of retail sales - more than
90%, according to some estimates - still come
from brick-and-mortar stores. Forrester predicts that online sales will account for 17% of
all U.S. retail sales by 2022, up from approximately 13% in 2017.
■ Research shows that consumers trust the experience of shopping at physical merchants
more than on e-commerce sites, and that
brick-and-mortar stores retain some inherent
advantages. For instance, a 2017 research report by Frost and Sullivan found that a shopper's ability to handle and evaluate a product with immediacy often outweighs a lower
price found online.
■ Success at retail is not about square footage,
but what you do with it. Even in the most challenged sectors, there are emerging success
stories. For example, a Fortune article last year
profiled how premium malls in up-and-coming
areas across the U.S. are renewing themselves
with better restaurants, entertainment and activities, employing open-air formats and a mix

In collaboration with:

of upscale and traditional retailers to attract
customers with more disposable income.
While the above points illustrate a simple truth -
that the store still matters - retailers can take only
so much solace from this reality. Today's shoppers
have too many options, and their expectations for
a flawless experience across all purchase and distribution channels are only getting higher. Increasingly, consumers are being conditioned by the ease
of online shopping to raise not only their standards
and expectations but also their willingness to abort
the shopping mission at any significant point of
friction. Of course, such defections are not limited
to brick-and-mortar stores. Typical online shopping
cart abandonment rates of anywhere from 55% to
80% mean that e-commerce players are also leaving millions of dollars on the table.
In light of these trends, industry experts are becoming increasingly vocal about the need to start
rethinking the very definition of a store and all
that it entails.

Next Generation of Retail

Recognizing that old models are no longer working and aware of the promise that lies in the next
generation of physical stores, FCB/RED and Chute
Gerdeman (the design firm FCB/RED acquired
last August) are calling for a wholesale change in
the evolution of retail store environments. Namely, they are urging brands and retailers to rethink

Photos by: Mark Steele Photography, Columbus, Ohio

THE EVOLUTION OF RETAIL ENVIRONMENTS, PART ONE



Table of Contents for the Digital Edition of Shopper Marketing - May 2018

Contents
Shopper Marketing - May 2018 - Intro
Shopper Marketing - May 2018 - 1
Shopper Marketing - May 2018 - 2
Shopper Marketing - May 2018 - Contents
Shopper Marketing - May 2018 - 4
Shopper Marketing - May 2018 - 5
Shopper Marketing - May 2018 - 6
Shopper Marketing - May 2018 - 7
Shopper Marketing - May 2018 - 8
Shopper Marketing - May 2018 - 9
Shopper Marketing - May 2018 - 10
Shopper Marketing - May 2018 - 11
Shopper Marketing - May 2018 - 12
Shopper Marketing - May 2018 - 13
Shopper Marketing - May 2018 - 14
Shopper Marketing - May 2018 - 15
Shopper Marketing - May 2018 - 16
Shopper Marketing - May 2018 - 17
Shopper Marketing - May 2018 - 18
Shopper Marketing - May 2018 - 19
Shopper Marketing - May 2018 - 20
Shopper Marketing - May 2018 - 21
Shopper Marketing - May 2018 - 22
Shopper Marketing - May 2018 - 23
Shopper Marketing - May 2018 - 24
Shopper Marketing - May 2018 - 25
Shopper Marketing - May 2018 - 26
Shopper Marketing - May 2018 - 27
Shopper Marketing - May 2018 - 28
Shopper Marketing - May 2018 - 29
Shopper Marketing - May 2018 - 30
Shopper Marketing - May 2018 - 31
Shopper Marketing - May 2018 - 32
Shopper Marketing - May 2018 - 33
Shopper Marketing - May 2018 - 34
Shopper Marketing - May 2018 - 35
Shopper Marketing - May 2018 - 36
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