Anyone who has been reading any kind of business related news lately can tell you that retail is in trouble. Major box stores and the brands we grew up with are fading away. So what happened? What's in store for the future of retail? I'm glad you asked, lets discuss...
Why are we seeing major box stores and national brands in trouble? Well there are multiple factors but the major ones are this; the box store business model doesn't work in today's consumer landscape, and the national brands aren't agile enough to compete with their new age competitors. The box store's business model calls for brick and mortar locations (think Sears, Macy's and JCPenney's), which is incredible expensive. The problem is that people don't do "one stop shopping" like they use to. That's how these stores gained prominence, selling the "convenience of buying everything you need in one place". Well, things have changed and the consumer now likes to shop at niche stores that focus on one thing, and they do that one thing very well. Why go to one of these major stores with the hopes that they have what I'm looking for when I could go to a store that specializes in what I need. That has lead to a decline in sales for box stores and the crippling overhead has forced all of them to close a number of under-performing locations, and some are considering bankruptcy.
Then why are brands we grew up with dying too? Simple, they are not agile. Running a major brand like The Gap or J Crew takes a lot for forward prediction in regards to trends and inventory. And if you screw those up then you are in for a painful quarter. That's what we're seeing in today's market. These major brands are whiffing on fashion trends and have too much inventory which is killing their bottom line. So how did this happen? Well new players have entered the game that can move faster and get in and out of fashion trends easier then their national brand counter parts. This has caused a mass exodus of consumers to shop in smaller more current trend specific or niche stores. Also today's consumer is looking for more of an experience with the brands they are buying. That's why you are seeing an explosion in the workout fashion industry. Great example is yoga pants, every girl owns a pair of yoga pants but not every girl does yoga. They are buying into the experience of feeling fit and being healthy. The major brands can not keep up with the shift trends, which means they are often passed up by the consumer looking for something specific they just saw on social media.
The definition of an entrepreneur is someone who sees and opportunity and exploits it. So what's the solution to be successful in today's retail landscape? Here are my 3 keys; Mobile friendly, Agility, and Social presences. Let's break it down. Today's shopper is constantly on their phone, and mobile commerce is gaining speed at an incredible rate. So having a mobile friendly site is key, and the easiest way to do that is to have a responsive website. Or you can take it one step further and build a shopping app. Having an eCommerce site and being mobile friendly are a great way to keep overhead low. Brick and Mortar locations are no longer necessary. The second key is agility, that means being able to move in and out of trends quickly. So keep on eye on what's trending, don't order and insane amount of inventory, and get feedback from your customers about what they are looking for. This will allow you to stay in your customers mind and ahead of your competition. Lastly is to build a profile on social media. This will allow you to stay out front of new trends, interact with your costumers, and get in front of new consumers. The power of social media is crazy and I shouldn't have to tell you why you need to build your business's presence on Instagram (or any other platform), you should know this by now (and there are like a million articles about it online). Social media is the best form of free advertising and is often where new trends get there start.
So now that you know these 3 keys, use them to avoid the mistakes big box stores and our favorite brands as kids have made. Because nobody wants to be left behind...