Retail is not dead

There is a lot of talk about how the internet is killing retail. One of the ways is through “showrooming”; showrooming is when the consumer uses a retail store to touch, feel and try on the product, then purchase the product online.

The doomsayers predict the end of mainstream retailing by the end of the next decade. The combination of speed and free shipping is alluring customers away from the brick and mortar stores. Amazon is investing millions of dollars on same day delivery drones. In fact, in a few clicks you can price shop globally and access a wider range of sizes. All of this is appealing to many consumers.  Sizing issues are becoming a thing of the past with more advanced technologies that enable you to scan yourself and use the measurement to virtually try on the goods. .

So, who am I to say that Main Street will be alive and well?! As a matter of fact, thriving for many years to come?! I’ll tell you the one thing the internet doesn’t have… Emotions!

At the end of the day people are not buying bras and panties, tee shirts and jeans, they are rather buying into the emotional connection of how they feel when they wear these items.  They seek and need human contact.

As we look at consumer behavior, we are seeing a huge, important trend of shopping small. The consumer is looking for well crafted, limited availability, artisanal, beautiful (think wow factor) in the fashion they are buying.

Most consumers shop online for the brands they know, whose fit they understand or an item they need to replenish. Once that is set, they search online to see who has it cheaper, offers free freight and/or has easy return policies. There are even companies like that will do the search for you. In fact after filling a detailed wish list of the brands you like and your sizes they will send you a daily email with all the discounts and offers they find for you online.

Here’s my truth: no fashion whether apparel, footwear, or lingerie that’s ONLY an online retailer can make a profit selling this way. There are a few examples of niche sizes online retailers doing well, but not enough to “kill” Main Street. Piperlime, one of the GAP brand companies set out to only be an online retailer, then changed gears and started opening brick and mortar stores. One can only imagine due to sales.

Let’s take a look at Walmart. The largest retailer in the world doing 500 billion dollars in sales a year. If it were a country it would be the 25th largest economy. They have enough distribution points in the US to offer same day if not a few hour delivery service yet they are far from dominating the online business. 90% of Americans live 20 minutes from a Walmart. My thinking is that Walmart is out to make money, period and they understand there is no money in online fashion where the margins are too low on commodities. Amazon on the other hand wants to dominate that space with the purchases of startup online retailers. They paid 1.2 billion dollars for Zappos, who loses money every year. They are investing hundreds of millions of dollars in technologies, including buying a robotics company to streamline the pick and pack at their warehouse. Their prime shipping underlining mission is to play on the human nature of waiting to get the most for your money and by having you make purchases you would have normally bought locally. It’s not working based on their increase in membership cost.

So until the online fire burns out what can the boutique owners do to stay competitive. Here is my top 5 to do list.

1. You must constantly and aggressively seek out new brands. You must travel to all the tradeshows; you must open those emails from unknown brands; you must read and discover new talents in all types of publications. Buying is a full time job. You must have a high percent of emerging or hard to find international brands so that the consumer cannot use their smart phones while in your store to compare apple to apples; trying on the garments and then buying them online.

2. You must be the credible expert. Be quoted in the local paper, write a fashion column, and hold educational events in the store. Build customer loyalty not with points but relationships and trust.

3. Build partnerships with your vendors. If you must bring in a department store brand ask them to build capsule collections for the independents. This benefits both parties by having something semi-exclusive and by the brand testing new styles and concepts. Ask them to ship your orders first to avoid early season forced markdowns due to the majors marking down so early in the season and insist they keep competitive pricing on their website.

4. You must have an excellently trained sales staff. When the consumer is so savvy on everything from fabric composition to country of origin perceptions, you must train your staff on more than just fit, but they must become stylists, with crisis management training. Sale training must be comprehensive and the art of “closing the sale” is a must to avoid showrooming. No one should leave your store to make the purchase online! Your focus should be on service and instant gratification. If the reason for leaving the store is price…empower them to match the price and resolve the situation with the vendor after the sale.

5. Have a great shopping environment and consumer experience. Micro merchandising your store for the ease of upselling. 80 percent of the sales are done in the dressing rooms, so it is important to have comfortable well lit dressing rooms that are truly private.

I would like to change the old saying “if you can’t beat them, join them”, to “beat them by joining them”.

In today’s retail climate, you must be “omnichanneled” with ecommerce, as well as mobile and social media commerce. You need to reach out to the consumer wherever they may be and not expect them to come to you. I know it sound like a contradiction but it’s not. Studies have shown once the consumer has had the physical experience of retail, it will drive traffic online, which doesn’t always translate into a purchase but they will check to see what is new. With social media there is a balance you should have, we are comfortable with 50 percent informational with “how to” and fashion updates, 25 percent aimed at making sales, 20 percent fun, and 5 percent personal….make good use of hashtag (#TBT (ThrowBackThursday)… just keep it politically free.

Remember when they said catalog business would shut down store fronts… With new technologies comes the chicken little of the world!

Mercedes Gonzalez is the director of Global Purchasing Companies based in New York City which develops retail strategies thru consulting and workshops for both retailers and brands.

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