This is an exciting time to be in retail and the last time such disruption occurred was when something called “e-com” took traditional retail to task over a decade ago. In the past few weeks, we have seen department stores become specialty brands, e-Commerce mavens acquire brick-and-mortar locations in mass, several struggling retailers calling it quits, and a plethora of leadership changes.
In retail, times, they are a-changing! It’s getting to the point of being similar to the world of fashion, where the only constant is change (and everything ends in excess!).
So, let’s take a look at some of these monumental movements in the industry I love, and one that contributes so much to the global economy.
Macy’s, perhaps our nation’s most beloved retailer, has acquired sexy beauty retailer Blue Mercury, and therefore has added ‘specialty store retailer’ to its many innovative moves for 2015. Macy’s continues its attempts to lure millennial shoppers, and this will certainly catch shoppers’ eyes.
Often, a department store’s rigid structure prevents it from incubating and experimenting with small innovative brands. Macy’s move is thus a masterful one, and it might also be the sign of further ‘micro-disruption,’ as the ground floor has always been such an important part a department store’s core strategy.
An interesting sub-plot here is the partnership between Bloomingdale’s, owned by Macy’s, and high-end beauty retailer Space NK, who is the main rival to Blue Mercury. Terry Lundgran and Tony Spring are the heads of Macy’s and Bloomingdale’s, respectively, and are two of the brightest leaders in retail, so I am certain Macy’s recent move is part of a more grand master plan.
RadioShack (and Amazon?)
After years of sales misses and repeated store closings, RadioShack filed for bankruptcy last week, and has plans in place to reportedly turn almost half of their 4,000 stores into Sprint store locations. Ever bit as newsworthy is the persistent churning of the rumor mill, where speculation links RadioShack’s prime mall locations to … Internet juggernaut Amazon.
Amazon, the first digital-only retailer to break the “top 10” of retailers (NRF Top 100 Retailers), recently hired two high-level Apple executives, and with that have delivered a strong message that brick-and-mortar Amazon stores are on the horizon in 2015. If RadioShack real estate holdings fall through the fingers of Amazon, I’m sure there is a “back-up plan” and am confident that brick-and-mortar is in Amazon’s not-so-distant future.
Online retail’s continued adoption of physical channels (Rent the Runway, Warby Parker, Bonobos and more) seem to be resounding confirmation of my many blog posts and insights around the theme of “Brick-and-Mortar is Not Dead.” Retailers need a physical showcase where shoppers experience the brand at all levels through touch and feel, atmospherics, socialization and, of course, instant gratification.
Turn, turn, turn
The recent news of some retailers calling it quits (Deb, Cache, etc.) and numerous changes at the helm of others (Lululemon, Abercrombie, Target, Home Depot, J.C. Penny, American Apparel, Wal-Mart, Gap, etc.) are not new to the industry. These changes occur typically after holiday numbers are finalized, as most retailers’ financial results are dependent on the holiday selling period. The brands that continue to rise up to the challenges of the day are focusing on a critical few key initiatives beyond differentiated product (which is always king).
When you look at Macy’s or Amazon, and even some of the innovative brands like Warby Parker, Birchbox, or fashion retail icon Ralph Lauren, you see shared characteristics that keep them in the positive eye of the consumer. Some of these factors were referred to in my retailing trends post in 2014, but many others are trends that have burst forth for 2015.
Today’s most successful brands are converging digital and physical channels. They are working hard to create interactive in-store shopping journeys with the use of enabling technologies that actually transcend the four-walls and flow seamlessly into the digital world of social media or e-m-s (electronic-social-mobile) commerce. Finally, today’s innovative brands are changing store formats, implementing high uses of personalization and keeping convenience in mind – complex infrastructure might be in the background, but the front side has to be “easy, as today’s shopper has spending power, but less time and patience.
I am excited about the next few years in retail … are you? Let me know what you’re most excited about through Twitter @retailshelley.
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