Please stop freaking out; retail is not dead.
I know the headlines seem relentless – Retailer X is Going Out of Business, the Retail Apocalypse is Here, Unprecedented Store Closings, The Death of the Mall – and those seem to be the positive ones! Every day I wake up to a flood of emails asking about another article showcasing a slightly different take on the demise of the retail industry and the rise of Amazon. And, of course, the store closings are not alternative facts; stores are indeed closing at a somewhat unprecedented rate and the charge is being led by some big names — Sears, Macy’s and a number of mid-range fashion brands overextended on debt and real estate, just to name a few.
But is the picture really so grim?
This post is part one of a three-part series exploring the viability of three specific retail mindsets:
- Curated retail
- Convenient retail
- Community-based retail
Today let’s start with curation. For me, a curated retail experience is one that basically delivers the polar opposite of Amazon. Sure, it’s great that Amazon knows I have probably run out of dish washing detergent or that my son really wants the new Ninjago Lego Set, but sometimes what I really want from retail is innovative products and new, fun experiences. I find this to be one of the most limiting aspects of shopping online – it is so difficult to find anything I don’t already know about. Curated retail solves the problem by creating products and experiences that speak specifically to a tailored audience. Social media and digital retail are the perfect places to take an idea and build upon it based on maker/marketer creativity and, certainly, shopper data.
So, moving forward with curated retail, where do we go from here? Well, before you go off and open physical stores, please let me suggest you … do not open physical stores*.
You should know brainstorming new business concepts is a favorite hobby of mine. Most everyone has an idea about the next social app, a more perfect wine bar concept, or a disruptive application for their particular career or lifestyle. It used to be that physical retail concepts would be part of that conversation, but those days are now largely long gone. To me this signals a huge opportunity. In some ways, it’s true, you really shouldn’t start your enterprise with a physical retail store – *unless you have collected a ton of data about your shoppers first.
To open a specialty retail store (we will cover other concepts in future posts) today, there is no doubt in my mind that you have to start online. Last year we added close to 100 retailers to our RetailNext family and many of those were brands or concepts that started somewhere other than with a four-wall concept. This is so exciting, and honestly, many of the new brands we add to the list are favorites of mine, and the fact brands like Everlane, Birchbox, and M. Gemi are opening stores makes me very happy. But, before you race ahead and secure your lease, there are some fundamental steps I would recommend considering.
- Start with a point of view. Direct-to-source italian manufacturing is a popular one, as are men’s and children’s clothing, as well as grooming and cosmetics. The concepts that are exciting to me bring something new to the market with style, design or curation. Often this work has been done, but you’ve been beholden to distribution in Department or Big Box stores and your brand has been watered down. Take control of how you communicate with your customers.
- Build buzz. Use social media in it’s purest form. Get your friends talking about what you are doing. I was recently introduced to a great kids subscription business, Rockets of Awesome, and I have personally introduced the brand to my entire network through Facebook, Twitter and LinkedIn. Why? Because it’s insanely hard to find cute clothes for young boys, and when I do, I actually want to tell a lot of people about it. I am not unique.
- Covet your raving fans. Treat them with such high regard that when you open a store in their neighborhood, you immediately become an instant destination. Trust me, she will come back again and again.
- Collect data. And, collect a lot of it. It sounds obvious, but I have to say it anyhow: If your fans like what you do, they will give you an insane amount of data that will help you build a better product/brand, AND give you specific insight into where you should eventually open stores. Years ago I worked for a luxury jewelry retailer who successfully built new stores in large part based on where catalog sales were coming from. The data you collect from your customers should inform many of your location decisions.
- Don’t even think about going head-to-head with Amazon. If you think you have a better way to sell generally available goods at a great price, don’t do it. Someone will eventually eat into Amazon’s market share, but if you are reading this blog it is probably not you.
While we don’t know what retail will look like in five or 10 years, we do know it is changing – and will continue to change – dramatically. Are the dramatic changes destined to be entirely doom and gloom? From where I sit, absolutely not! My enthusiasm for the next phase of retail innovation and change has never been greater.
However, retail is at an inflection point. Shopping is forever changed and retailers cannot succeed by deploying strategies rooted in an increasingly long-forgotten past. With curated retail, it’s time to sweep away past paradigms and go to market with the shopper front and center of everything.
In two weeks, I’ll be back on the blog to discuss the topic of “convenient retail.” In the meantime, please share in the Comments section below your ideas around retail curation.
- Amazon Go Delay Is No Victory for Physical Retail Blog
- Fine Jewelry & the Ever-Changing Retail Landscape Blog