There is a global retail store apocalypse, right? Wrong!
But surely because ‘Toys r Us’ closed its doors, Sears just went bankrupt and all the other major department stores are suffering means it must be endemic, pernicious, you name it – you know an apocalypse? There’s even a graph that explains EVERYTHING you need to know to understand the hysteria.
Let’s calm down and take a closer look at the facts:
- Total physical stores in the US in 2017 - UP.
- Average sales per store in the US in 2017 – UP.
- Net new grocery, merchandise and warehouse clubs openings 2017 – UP 2,680 stores
- 90% of shopping now and 80% in 2025 will still be in bricks and mortar.
So did some retailers miss the apocalypse memo, like Aldi and TJ Maxx who are actively opening new stores. And what has GenZ got to do with it?
Interesting is the new boring
What’s changed is that department stores and malls are seeing the biggest decline above all other sectors. Why is this? Largely they dominate the boring middle ground offering little differentiation with the main ‘experience’ being often a spectacularly uninspiring one. Amazon.com doesn’t offer an exciting experience either but it’s 10000% more convenient, probably cheaper, probably with more selection, and maybe even quicker to get your goods. That’s where they compete, so why would I go to several shops to buy products so low involvement as windscreen wipers, rechargeable batteries, an oven glove
This does not mean all low involvement goods cannot
The Obliteration of Space
Humans have been hardwired for centuries to associate spaces with functions. Kitchen = cooking, bathroom = washing, bedroom = sleep, beach = relax. Enter the smartphone: Spaces and their associated functions have been obliterated, public and private spaces are merged, the office can now be brought to the beach.
Enter GenZ: hardwired to smartphones, they spend proportionally more time
Immersive is the new interesting
If immersive is the new interesting, then retailers need to jump in with both feet. We know GenZ still actually want and like that physical shopping experience; it’s just that they expect more than a rail of bent metal with some clothes hanging from it. These in-store immersive experiences and immersive storytelling are set to set to top $8bn by 2022.
Let’s look at two retail brands who get it! For me one of the best
Image courtesy of Google Maps and VANS
The second one SONOS, the audio company
These two examples
It’s enough to scare the life out of any retail CEO but it’s also the time to take the opportunity to redefine what the brick and mortar retail experience is. Retailers need to be able to have something worthwhile being immersed in for a start, and then invest in the technology to deliver that experience. Instead of being an apocalypse, maybe GenZ
Interested in learning more? Read the approach 50 top retail executives are taking to adapt to GenZ retail demands, download the exclusive report at this link.