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Shopper Brynn-sights: Off-Price Retail Must Shift

February, 22 2019

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Dr. Brynn
Written By
Dr. Brynn
Topic
In the Press

This week, journalists asked me about Payless Shoesource closing, as well as HBC's decision to close Home Outfitters:

  1. https://lfpress.com/news/retail-marketing/payless-to-close-248-canadian-stores-saying-its-ill-equipped-for-market/wcm/520575ee-4265-49fe-b61b-a1766b996864?fbclid=IwAR0gyPrrijeyqLZfdVegStSJKy-sJA-IFqAWwhmV5A4ks2c9y0Ooik4y0ZI
  2. https://www.cbc.ca/news/business/hbc-home-outfitters-1.5028740?fbclid=IwAR2ogLLLp-B6dcGHJQWan_OfYQoxZuyx0Tc4pE7QuCw4tYPAZ2B_BpPGuMg

What's interesting about both of these inquiries, is that despite being two differing categories (shoes, housewares) and completely unrelated companies, they are basically both the same story: both are off-price, discount retailers with large real-estate and no online presence (in Canada) that require shoppers to go into stores to realize what they offer by sorting and sifting. On the one hand, it means a shopper could return every week to completely new offerings, on the other hand, it requires the shopper have quite a bit of time to shop with - this model doesn't exactly score high on 'convenience' metrics.

What this speaks to is a trend here: off-price retailers requiring a 'sort-n-sift' shopping style are no longer managing the margins required to warrant the requisite, typically big-box, real estate. And of course, this style of retail doesn't lend itself to effective e-commerce (too many SKUs, short-run items etc.) 

Secondly, I'd argue that both are commercial casualties of the changes technology is ushering in: bricks-n-mortar retailers continue to be challenged to maintain margins, adequate in-store foot-traffic as consumers become more comfortable searching, comparing, transacting online, and making the move to omnichannel consumption. Technology isn't just changing how consumers shop, either, it also allows manufacturers and suppliers to disintermediate the global shopping scape by shipping direct to consumer through their own platforms, Amazon, or Alibaba, etc.

I've been saying this for a while now: if a retailer with an omni-friendly target consumer-base is to remain competitive with physical store-front in light of the ongoing digital transformation they have to do one or both of these:

1) Have exceptionally well-trained, emotionally intelligent floor staff (capable of relationship building, up-, and cross-selling) who provide advice, guidance shoppers need and can't Google themselves;

2) Create an unbelievable shopping Experience in-store; preferably with 'being-n-seeing' spaces (where shoppers want to dwell, or eat, or people watch, or see something, or be seen etc.)

Prediction: Other similar retailers, such as TJX corp holdings (e.g. Winners, Marshalls, Ross, TJMaxx, HomeSense), to start pruning their store-fronts and footprint? Likely!

#business #marketing #consumerbehavior #shoppers

 
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