Retail Reinvention: When Armageddon is a Warning

Many experts will claim that we are in the middle of a retail crisis. In 2017, 21 major retailers shut down their stores, and many brand-name chains filed for bankruptcy. Retailers looking to save their stores should consider reinvention before they start building their bunker.

Retailers have been changing their business strategies to outperform the competition. This approach doesn’t have to be reserved for the big boys, especially when there are lessons that can be learned from others who have changed their ways.

The Limited becomes a Private Brand

The Limited could have closed its doors forever when it was forced to close. The brand instead turned its national brand strategy into an exclusive brand strategy. The Limited, in its second life, has aligned strategically with Belk to sell as a private brand. This move has saved The Limited and allowed it to expand.

The Limited aimed to appeal to older women who needed workwear in the 1990s. This decision eventually led to the business being stagnant and it losing its appeal. While the new brand will continue to focus on workwear, it will make an effort to include all women. It will also expand its sizes to accommodate plus, petite and tall women. National brands are looking for a second chance through a private brand strategy. This is why they should be focusing on tailoring products.

 

A private brand opportunity could also be available if other struggling national brands are willing to align with a retailer and offer a customized product. Retailers should also be open to these new lines. According to a forthcoming Daymon private branding study, 52 percent of shoppers said they shop at stores because of their private brands.

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Campbell’s Delivers Directly to Consumers

Campbell Soup Co. has launched an online service to help it overcome a three-year slump.

Campbell’s already has ventured into e-commerce. The best-selling soups on Amazon.com are its chili macaroni, chicken noodle and chicken noodle. This test project aims to establish a direct connection with customers. Customers can browse Campbell’s website for canned soup and have it shipped directly to their homes. The new business model will capitalize on the “craft” movement, creating soup made with local ingredients and selling it in trendy glass mason jars.

Campbell’s learned that no business model is secure in today’s competitive retail market. Brands need to look closely at customers’ needs and provide the goods. According to a Shutl survey , 95 percent of shoppers would shop elsewhere if shipping options weren’t available. The sky is the limit when it comes to fulfilling these needs, whether that means shipping directly, working with an easier retailer to ship products, or dropping off items by air.

Everlane Ditches Online Only Strategy

Everlane, the online startup sensation, did something it promised it would never do: opened a brick and mortar shop. The brand’s “radical transparency” has been a huge benefit to shoppers, with the cost breakdown and profit margin displayed prominently on the website. But the truth is that customers want more than what is offered online. Everlane customers agree with this statement. They want to feel the product before buying it. Everlane’s only solution is to open a shop, a physical store.

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Building for the sake is not an option. However, experiential retail is. The National Retail Federation’s 2017 Consumer View Report found that 49 percent of respondents visit stores more frequently than they used because of new entertainment and food options. Nearly half of respondents stated that they shop in more stores now than they did a year ago. For brands trying to improve their physical stores, they should focus on the experiences Everlane will offer in its new stores. You can sell merchandise but you should also facilitate talks and workshops and book performances to enhance the in-store experience.

Although retail armageddon may sound like the end, it doesn’t have to be a self-fulfilling prophecy. Retailers should instead look at ways to rejuvenate themselves, whether it’s through a new brand strategy, a new delivery method, or something else entirely.

source https://www.mytotalretail.com/article/when-armageddon-means-reinvention-in-retail/

Retail Sales in January Show the First Decline in 11 months

Retail sales in the United States unexpectedly dropped in January. This was their largest drop in almost a year. CNBC reported Wednesday that retail sales in the United States dropped 0.3 percent in January. This is the biggest drop since February 2017. The December data was updated to reflect sales increasing 0.4 percent instead of decreasing by 0.3% as originally reported. Good news was also to be reported. According to reports, consumer spending, which accounts more than two-thirds U.S. economic activity was up at a 3.8 per cent annualized rate during the fourth quarter. The economy also grew by 2.6 percent in the last three months of 2017. The National Retail Federation reported that January’s retail revenue increased by 5.4 percent over the previous year. It was expected that December’s strong holiday season closing would be a downgrade.

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Total Retail’s Turn: While this may seem like bad news, it is normal for sales to fall in January after the holiday shopping season. In a press release, Jack Kleinhenz, NRF Chief Economist, stated that these numbers “reaffirm a positive start for 2018 that reflects continuing consumer optimism caused by solid economic fundamentals.” Consumer spending is growing at a steady rate and showing year-overyear increases in almost all retail sectors. The employment rate has increased, the labor market is tightening, and wage growth continues to rise. Although stock market headlines can be worrying for some shoppers, households still have the ability to spend and the tax cuts that consumers now see in their paychecks will provide an additional boost.

source https://www.mytotalretail.com/article/january-retail-sales-show-first-decline-in-11-months/


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