Over the past eight months, much has been written and reported about the supposed “retail doomsday” of 2017. Of course, many of retail’s traditional leaders (turned chronic underperformers) have been forced to reduce their brick and mortar store footprints, and in some cases, declare bankruptcy. But all of us at Ecrebo, alongside many industry insiders, are simply not buying it.
Let’s look at the proof:
Retail sales and consumer confidence are up
According to the NRF, retail sales in July 2017 increased by 0.6% from June, and increased 4.1% in the first quarter of 2017 compared to 2016. Of these positive reports and the uptick in consumer confidence, NRF chief economist Jack Kleinhenz says, "Consumer spending remains solid as retail sales saw healthy improvements in July and revised June numbers were also positive.” For good measure, Greg Buzek from IHL Group recently reported that retail sales have grown nearly 4% annually for the past seven years.
Retail employment and store openings are on the rise
Paula Rosenblum, managing partner and co-founder of Retail Systems Research recently wrote that 19 retail chains have announced the opening of 2,861 stores, in the same period that store closings were announced (as researched by IHL Group). This pace of store openings is set to overtake the number of store closings by a 2:1 margin by the end of 2017, according to Buzek. Of course, when the number of stores increases, so does the number of retail jobs. The NRF reported in June that retail jobs have grown by 1.5 million since early 2010, and that there were 577,000 retail job openings in April – well above the three-year average of 554,000.
From where we stand, we are firm believers that the future of the physical store remains bright. Except for retailers who are complacent; resistant to the preferences of today’s shopper.
The Store is Still in Vogue: As Long As It Complements the Online Experience
In that same June report, Mark Mathews – VP of research development and industry analysis at the NRF – said something that really struck a chord with me and echoes the key themes that are so important to Ecrebo and the retailers we work with every day. “Stores are still in vogue. Many online retailers recognize the value of a physical presence — businesses like Amazon, Warby Parker, Bonobos and Blue Nile are experimenting with brick and mortar locations. All retailers, whether purely online or purely brick and mortar, must adapt to how customers prefer to shop in a digital world.”
Now more than ever, shoppers – especially the younger, more tech-savvy ones – want to be immersed in a brick and mortar store experience that complements the online one. One of the easiest ways to accomplish this is by embracing personalized marketing at critical junctures in the shopper’s journey. Not surprisingly, the retailers that have already taken this leap are the ones that have experienced significant growth in 2017.
Take for example the 11 regional grocery retailers across North America (representing over 1200 brick and mortar store locations) that have signed on with Unata’s eCommerce grocery platform in order to provide seamless online/in-store engagement. They know this will help them actively lead in their markets, vs. resisting change and hoping for the best.
The retail industry certainly has not been without its share of bumps and bruises since the beginning of 2017, but the sky isn’t falling. In fact, the sun is still shining and loyal shoppers are opening their wallets for the retailers who can provide more of what they love in a direct and personal way.