When it comes to shopping in 2014, we have an incredible range of choices. We can drive to the mall and browse in dozens of stores. We can get on the computer and buy a phone, or get on the phone and buy a computer. We can head for an outlet mall, a big-box department store or a specialty boutique. We can even pick up a catalog and make our purchases the really old-school way. Retailers understand that today’s consumers have all kinds of options, and they’re doing everything they can to reach shoppers through multiple channels – something that’s often called “omni-channel marketing.” In stores, online and everywhere in between, retailers want to maintain a seamless, high-quality presence to make it as convenient as possible for customers to buy from them. The pursuit of this goal has led to several new – and often surprising – retail trends.
Bigger isn’t always better. Not so long ago, retailers were in a race to build ever-larger stores with massive amounts of merchandise. Now, the trend is toward creating stores with significantly smaller footprints. Why is this happening? In rural areas underserved by retail, companies are opening smaller stores with fewer items on the shelves because they simply don’t need a huge amount of space to serve the number of customers in the area. Even the biggest retailers such as Target and Wal-Mart are reducing the size of their stores to improve efficiency. In densely populated cities, it’s the expensive rent and lack of available space that keeps square footage to a minimum. In both cases, the goal of the retailer is the same: to reach customers wherever they are in an effort to increase market penetration and grow revenue. An outlet for greater profitability.
When the economy slowed, the retail industry was one of the hardest hit, and in many ways the sector is still recovering. A bright spot on the retail landscape is outlet malls, which are under development across the nation. Outlet malls have become popular tourist destinations, complete with bargain-filled stores, family-friendly activities and plenty of places to dine. Outlet shopping has also gone upscale, with well-known luxury brands entering the space to take advantage of every possible retail channel. Stores such as Nordstrom Rack and Last Call (Neiman Marcus) attract not only core users of these brands, but more cost-conscious aspirational shoppers, too. While outlet malls have traditionally been located outside major cities, many are now operating in highly populated areas and attracting scores of eager shoppers.
Bricks and clicks. The interaction between brick-and-mortar stores and online retail outlets has never been more prevalent – or more important to success. Only a few years ago, physical stores were closing to allow companies to expand their online offerings. However, retailers found that most customers want to touch, feel and experience a product before they buy it. As a result, we’re now seeing Web-only operations opening physical stores in order to deepen relationships with customers. We’re also seeing a trend toward “reverse showrooming,” with customers researching their product options online before going to a physical store to make the purchase. Some stores are behaving much like distribution centers as customers buy online and then travel to the store to pick up their merchandise. Restoration Hardware is an excellent example of a true omni-channel marketer. The company creates large, well-stocked stores that act as entertaining showrooms for the brand. Online, there’s a beautiful website with a product mix that goes beyond what’s available in the stores. Restoration Hardware also offers a mobile app, catalog purchasing, gift certificates, baby and wedding registries, credit card rewards programs, even a platform to view and acquire contemporary art. In other words, it is using every channel available to it to boost convenience for customers and profits for the brand. Omni-channel is a winning marketing strategy – one that more retailers seem to be adopting every day.
Bill Stinneford is senior vice president of sales and account management at Buxton, a customer analytics firm that has aided the growth strategies of retailers such as Pier 1 Imports, Anthropologie, Restoration Hardware and many more. email@example.com.