The End Of Shopping As We Have Always Known It?May 18, 17
Remember the old days when we used to go to shopping malls to buy products? When we would leisurely walk through the mall, looking into endless shops and checking booths, enjoying the experience before loading up and heading home?
We may not have approached that point yet, and the above may possibly relate more to 2027 than 2017, but the countdown for shopping malls has been underway for some years. In the United States, the sight of crumbling monstrosities built in the 1960s that nobody is interested in reviving is not uncommon.
The retail sector continued to build too much space into the 1990s and early 2000s, and that created a bubble similar to the housing bubble which burst with such disastrous results in the great financial crisis of 2008. The result was doors closing and dropping rents, and eventually closures.
In the United States, Macy's, Sears, and JCPenney, Kmart and Guess are among a list of well-known national retailers to have announced mass store closings totaling in the thousands so far this year. Women’s clothes chain Bebe is closing all of its 180 stores. Target Corp. has decided that smaller format stores are the answer, while market giant and cash-rich Wal-Mart simply continues a shopping spree, buying online firms, such as jet.com, to correct any weaknesses.
Like it or not, shopping today needs to be a fun experience, such as that provided at Apple stores which, not by chance, has the highest turnover per square foot. Experts say there are several other crucial factors involved in persuading potential customers to spend their money. Are stores seeing their premises from the viewpoint of the client and do they feel what the member of the public is feeling. In other words, a one-size fits all approach doesn't work. People are far more choosy than they used to be regarding how and where they spend their money. Stores need to work on their approach to customers.
Digitally native brands are creating a new kind of retail store based on no inventory and excellent experiences: customers enter a dazzling store, receive a high-level brand experience and purchase items that are shipped to them. Huge stores, with enormous inventories and sky-high payrolls are increasingly a thing of the past.
Then there is the factor that goods need to be given space to shine and stand out because customers feel more comfortable when they have room to move comfortably. It also highlights the goods on display and gives a subliminal message that this is what justifies the premium being demanded.
And there's also the need to tell a story. It's become something of a cliché, but stores need to tell a tale to clients to persuade them to swipe their credit card. Assuming a store is not selling bread and milk or other groceries, but rather an expensive item that is not essential to human existence, they have to work hard on the story.
Businesses also need to be using data analytics on a much larger scale. This was a point made by Antwerp World Diamond Centre President Stephane Fischler in an excellent presentation at the Mines to Market conference in Mumbai in March. Most data goes unused, but when used properly it can help businesses enormously.
Shopping malls are increasingly being replaced by huge, faceless companies that will take your order online or on the phone and mail it or ship it to you the same day or tomorrow. Seems consumers are willing to forgo the whole shopping experience in order to receive the product at home or at the office quickly with maximum convenience.
For the time being, however, shoppers are still hitting the stores, but mixing that with online price checking before committing to purchasing. And that's making the ability of retailers to squeeze a premium out of customers increasingly difficult to achieve. The times keep a'changing, but where are we heading?