As we close out April and are already closer to the mid-point of 2017, I’ve been reflecting on the current retail landscape. In short, it’s been a tough year so far in retail…
Here are a few lowlights:
- Macys – Store closures and layoffs
- Sears – Store closures, layoffs, and continued instability
- JC Penney – Store closures and no brand identity
And worse, a list of a few companies that are no longer in business at the close for Q1:
- The Limited
- Wet Seal
- American Apparel
So, what exactly is going on here???
My Belief… It’s Two-Fold:
Retailers have forgotten the importance of a great consumer experience. Whether it is within a brick and mortar store or online, consumers today want more than just the lowest price for MOST GOODS.
Speaking of price, it’s more than just the lowest price. While promotions and sales are great and important during certain times of the year, the price SHOULD NOT be the only reason why consumers shop most brands all the time. The lowest price focus doomed some of the retailers above and potentially some others in the near future (ie: Gap Inc). While it is not the only reason, Amazon’s heavy hand on using price as a main reason (among other things like Prime/great shipping experiences) to gobble up market share across retail has led to retailers needing a new consumer value. This has really emphasized the importance of an authentic website or retail store experience with great content and services.
What should retailers do:
- Think beyond price and how can you capture more engagement and transactions without promotions. Consider email triggers, retargeting, full funnel experiences and a ton of other micro strategies that can help build back up your consumer base. It’s a lot of hard work and unfortunately some executives or retailers still think there’s a bunch of silver bullets out there. Newsflash, we’ve matured as an industry and the next “Google” won’t save you (for now), so dig in and work hard to get each and every sale!
- Keep telling stories and help the consumer see the value through content, recommendations, consumer testimonials, and reviews.
- Continuous innovation across all programs. DO NOT set and forget any of your marketing programs. Keep digging into areas to improve and constantly challenge your partners, agencies or ad platforms for new ideas and innovations. Get involved in beta programs or newer advertising opportunities, such as Pinterest Search.
- Lean in on the retention channels. Almost daily, I am asked by retailers how they can grow their business. Well, in many cases your current customers are being under-utilized and are eager to engage and potentially buy again. You should leverage email, triggers, abandonment email, RLSA’s and all of the other retention mechanisms to keep the conversation going. I cannot emphasize the importance of building out these programs and prioritizing.
A few retailers that are changing the game:
Patagonia – Whether you love them or hate them, they have a position in retail and stick to it. Whether it’s saving geese with their new hybrid goose down or their position on environmental regulations (and not participating in Outdoor Retailer). With this strong POV, they’ve generated a lot of content that is authentic to their brand.
Sephora – They are doing an outstanding job connecting digital across channels. At the store level, they have 4-5 digital screens for customers to interface and learn about products w/o the pressure of a sales person. Further, it’s directly linked to their website and a customer’s account. Online, they convey the same digital experience and make shopping easy with context, stories and great imagery.
Honest Tea – Doing some really innovative campaigns around social, pop up stores and a city’s health ranking. Driving targeted, brand engagement with smaller budgets but a big impact to their brand and awareness.