The past decade hasn't been kind to retailers. Malls shuttered, small companies folded, and beloved chain shops -- such as Toys"R"Us and Sears -- closed their doors. Spurred by delayed effects of the Great Recession and enormous shifts in consumer purchasing habits, the retail apocalypse has been marked by over 12,000 physical shop closures -- and left many wondering when the times of in-store surfing were gone for good.
However, 2018 changed everything. Last year, retailers started to pivot their advertising strategies -- experimenting with new approaches, such as high-tech attributes , pop-ups, events and Instagram-ready backdrops to lure shoppers.
And it worked.
Walmart had its best sales quarter in a decade. Target enjoyed "unprecedented" performance. Even e-commerce businesses that once vowed never to put down brick and mortar are investing in permanent physical spaces, keen to create hands on"bodily" relations with shoppers.
The Italian Renaissance had da Vinci, the Retail Renaissance has Target
Goal is the definitive leader of the shift. Once a quintessential big-box shop (replete with sprawling aisles, fluorescent dressing room lighting, and endless checkout lines), Target spent $7 billion in the past year to change its storefront and electronic efforts. With the initiative came a new focus: design store layouts that improve the shopper's experience from the minute they walk into the second they check out.
Part of the strategy involves opening smaller Target stores in urban areas. While clients can still explore a vast assortment of goods, the choice is curated to fit inside a compact floor plan. This is particularly evident in the apparel section: the season's fashions are arrayed on a display case, enticing shoppers without overpowering. And Target's premier brands are emphasized with hints and spotlights, leading shoppers towards the most popular products.
The brand new, urban locations cater to college students and young professionals, helping Target enlarge its market. From the end of 2019, the company intends to launch 130 of those small-scale stores.
In a bid to compete with Amazon's Prime policies, Target also shifted its approach to shipping. The brand now provides more same-day delivery options (thanks for their purchase of this delivery platform Shipt) and complimentary 2-day delivery. Or, customers can elect to skip shipping entirely: simply order online and pick up in store.
"Our stores are in the middle of our plan, and they're at the middle of our success at the moment," said Target's chief executive, Brian Cornell, to The New York Times in August.
Expand on experience and leverage pleasure
Cornell's testament resonates across retail businesses. Although Amazon remains the indisputable bellwether, manufacturers are not only trying to keep pace,they are intent on supplying what Amazon has yet to master: an experience to remember.
Consider Tiffany & Co.. The shopper lately announced plans for a three-year renovation of its flagship Manhattan store. The $250 million investment is aimed at heightening customers' in-store encounter with expanded retail spaces, cafés and fresh hospitality offerings. For Tiffany, this also involves capitalizing on its iconic status. The flagship store had a starring role from the 1960s movie Breakfast at Tiffany's, and the growth will give tourists and fans a opportunity to take part in the brand's story through more events and experiential opportunities. With in-store earnings still accounting for 90 percent of Tiffany's earnings, business executives are banking that the renovation will help the brand compete with e-commerce jewelers.
Another New York City retail establishment, FAO Schwarz, returned in 2018 with a renewed focus on"experiential" shopping. Three years after closing its flagship Fifth Avenue store, the beloved toy shop returns to the city with a bang. Under a new proprietor FAO Schwarz intends to capitalize on the shop's theatrical elements. Kids can zoom around on the mini in-store racetrack, assemble best friends in the Build-A-Bear Workshop, and learn more about the shop's new centerpiece: a two-story rocketship. To maintain the fun times rolling, dancers perform tunes on the shop's iconic walk-on piano -- and if that was not enough to catch attention, the notes have been reflected in lights and colour on exactly the same ceiling piano. Very good luck trying to match this immersive experience on a tablet display!
"Retail is theatre," says FAO Schwarz's chief merchandising officer, David Niggli. Indeed.
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Make the regular amazing
And let's not forget about the new leader in experiential shopping: Macy's.
During 2018, Macy's made significant investments in their turnaround strategy, hoping to procure shoppersand win back investors' trust after a few tumultuous years. The holidays are the best opportunity for the department store to demonstrate its achievement, and show it's.
In November, Macy's declared its stocks rose more than 80 percent on a 12-month period. That same month, the shop kicked off its holiday displays, hoping to create momentum which would last into the new year.
I visited Macy's Manhattan headquarters, and I will tell you: it is something to behold. Huge floral displays dot the first floor, enticing shoppers to stop and pose for a photograph. Snowflakes hang from the ceiling, and giant decorations glisten on a towering tree.
For extra whimsy, Macy's altered their"match Santa" opportunity. Rather than walking up to greet Mr. Claus at a weary old armchair, kids make their way through a tunnel to"Santaland," where the guy himself is waiting. Meeting Santa is a genuine experience that all shoppers, old and young, will remember for years to come.
Even in the tiny details, Macy's excels In the beauty counter, lighting and signage showcase unique products, and attendants stand ready to advise shoppers.
By all accounts, Macy's plans to keep on exploring experiential features even after the holiday season is over -- maybe the best is yet to come.
Use technology to lure shoppers and improve products
In other industries, the theatrical elements of purchasing are heightened thanks to new technology. Retailers in the beauty industry particularly are using technology to allow shoppers experimentation with products before buying. At select Sephora stores, shoppers can use an AR Virtual Artist tool to test on makeup and learn various methods, all without putting a single product in their faces. Sephora understands that its Gen Z clients -- 98 percent of whom prefer shopping in physical stores, according to a study published by IBM -- are drawn to high tech features that enhance the in-store encounter. And unlike e-commerce beauty shops, Sephora has knowledgeable staff on hand to answer questions and provide direction.
"We know to succeed as a merchant, we have got to be where our customers are and give her resources and experiences that meet her needs," says Mary Beth Laughton, Sephora's Executive Vice President of Omni Retail.
Sephora's approach appears to be working. Their earnings grew in 2018, despite considerable competition from Ulta Beauty and Amazon.
Speak to your target market with fresh brand messaging
For other businesses, joining the retail renaissance does not just mean embracing new in-store attributes -- it signifies rebranding to appeal to the new generation of shoppers.
Take Payless ShoeSource. In 2017, the reduction apparel retailer filed for Chapter 11 bankruptcy, announcing it would shut 400 of its US stores. Bankruptcy can indicate a new funeral -- but in 2018, Payless returned from the dead with a little help from a brilliant advertising stunt.
Last autumn, the brand took over a former Armani shop in California's trendy Santa Monica, stocking the shelves with their high price, low-priced shoes. But the trickery began. Payless invited lifestyle and fashion influencers to the launch party of"Palessi," a supposed manufacturer of designer footwear. In a scene of glitz and glamour, guests advised (imitation ) colleagues just how much they love the Palessi wares -- and a few even offered to pay hundreds for $19.99 shoes. At the close of the day, Payless revealed their ruse, and guests' surprised reactions were captured on camera.
The stunt created a cultural statement that Payless expects Gen Z shoppers will appreciate: luxury is a mindset. "Payless clients share a pragmatist viewpoint, and we thought it would be provocative to use this ideology to challenge today's image-conscious style influencer culture," states the Doug Cameron, chief creative officer for the bureau, DCX Growth Accelerator, that made the effort.
Although there's no word of more Palessi pop-ups, it appears Payless was effective in creating its brand positioning provocatively clear to shoppers. And while sales are not yet high enough to cement Payless from the retail renaissance, it is possible that the store will produce a stellar comeback in 2019.
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