There are more stores in the U.S. than consumers know what to do with.
According to recent research, retail space per capita in the United States is 15 to 20 times that of other major developed markets around the world. (Or, to put it another way, four times that of the France and the U.K.)
Considering that, it shouldn’t come as a surprise that, in 2017 alone, over 7,000 stores went dark, with 3,800-plus additional US stores expected to close their doors by the end of the year.
A lot of them are inside malls.
The fact is shopping centers haven’t been this vacant since 2012 when the retail industry—along with practically every other industry dealing in manufactured goods—was struggling to find a foothold following the Great Recession. (Last year, Credit Suisse predicted that 20 to 25 percent of all US malls would close over the next five years.)
Property owners are combating the problem by diversifying their offerings with better food and beverage options, entertainment, office space for public services (such as healthcare), and even housing (especially for aging baby boomers, who appreciate the versatility and convenience of enclosed shopping complexes).
Things are looking up, with some mall owners saying occupancy rates are stabilizing, especially in open-air centers. But there’s still a lot of work to do to increase foot traffic in North America’s malls.
Thankfully, brands and retailers have taken up the challenge, transforming stores into must-visit destinations thanks to a mixture of millennial know-how and ingenuity, and a renewed focus on retail execution.
But what is retail execution?
Retail execution is a term used to describe a company’s overall in-store product strategy. It includes in-store merchandising, forecasting and planning, promotions, and performance tracking and reporting.
And in 2018, a number of young and hungry startups—many from the world of e-commerce—are excelling at it.
Here’s what retailers can learn from them.
Three Ways Startups Are Enhancing their Retail Execution, and How It Can Save Malls
Online Goes Offline
According to research, 40 percent of online shopping orders are returned. But many retailers still aren’t capitalizing on returns as an opportunity to get customers back inside physical locations.
These days, it’s common for e-commerce companies—from Amazon (in the form of Whole Foods and its separate bookstores) to Warby Parker—to have brick-and-mortar locations. And many of them offer click-and-collect, which allows customers to order products online and pick them up in store.
If retailers want to increase their footfall, they need to deliver a true omnichannel experience, and it really can be as simple as letting customers collect or return their items in-store. Once there, they’re more likely to shop around or try goods they weren’t able to before. And if they have a positive experience, that halo effect can affect future sales—whether online or off.
Stores as Showrooms
Two decades ago, it wasn’t uncommon for department stores—like Bon-Ton and Sears—to be the main anchor of a mall, thanks to their seemingly unlimited product offerings, massive physical space, and major profits. Then Amazon grew beyond just books, and all of a sudden one-stop shops stopped being so common in America’s malls. With decreased foot traffic, everything else around them started to suffer. (Need proof? Just check out deadmalls.com for a state-by-state look at the growing list of abandoned shopping centers.)
With everyday goods being easier to acquire online, malls are doing more to attract customers (as mentioned above) in the form of better sustenance and experiences.
But individual stores can do the same, and some already are, by creating show-stopping showrooms that boost brand narratives that are as easy to shop in as they are to pose for a selfie in.
Take Macy’s recent acquisition of Story, a NY-based concept shop known for changing its offerings the way an art gallery alters exhibitions, and hiring of the company’s founder as a “brand experience officer” for the department store chain. (They plan to incorporate many of Story’s curatorial, editorial displays and strategies at its parent company’s locations nationwide.)
Showrooms allow retailers to focus less on stock and more on experience. With malls moving in similar directions, individual stores should rethink their offerings too.
Dig Into Data
Thanks to technology, retailers and brands have more access to consumer-behavior data, and the analytical power needed to measure it, than ever before.
These so-called innovation centers are transforming the industry, both on the large (think Apple’s retail flagships, Amazon Go, and Nordstrom Local—pictured above) and small-scale (b8ta, who monitor all levels of store data, from in-store execution to sales, to stay on top of shifting consumer trends).
Still, not every retailer is as forward-thinking: according to a recent survey by Retail Info Systems, more than half of store managers still don’t have access to mobile technology and real-time data, which ultimately impedes communication and execution, and can cost major retailers upwards of $3.7 million USD in lost revenue opportunities a year.
With better access to granular insights, retailers of all sizes can make better decisions when it comes to their retail execution, often in real time, to prevent stock from stagnating, and to maximize sales.
Looking to enhance your retail execution? Click the link below to set up a demo with the Foko Retail team to learn how you can better manage execution and HQ-to-store communication. (You can also get in touch with our Customer Success team at firstname.lastname@example.org.)