Is Store Within A Store + In-Store Pickup The Savior For Traditional Retail?
According to Internet Retailer, non-store sales (web & catalog) grew 3x as fast as in-store sales. That isn’t hugely surprising. Online is changing everything from fashion to groceries. So, let’s not even consider that shocking. Business Insider says that there is a retail apocalypse descending on America, with an estimated 3500 retail locations to close in the 1st half of 2017. That sounds pretty dire.
Combine the two issues — with non-store sales growing really fast, and retail locations shuttering their doors at an amazing pace, it does seem that traditional in-store retail is up against the ropes. But there are bright spots. Bonobos Guide Stores inside of Nordstrom’s drive foot traffic and a different kind of shopper to the august retailer. Alongside that store within a store trend, Nordstrom’s has a 45% YoY increase in order online pickup in-store traffic.
And if JC Penny is any guide, customers who shop online and in-store spend 3x as much as customers who shop in a single channel only. JC Penny, although it is shutting down 138 stores in 2017, is adding 50+ Sephora stores inside of JC Penny locations in 2017. This adds some panache to the JC Penny retail experience, but also ties JC Penny into the mammoth social media, millennial-focused marketing machine that is Sephora.
There is an additive impact of cross-brand relationships simply adds tighter focal personas. In the case of Nordstrom’s, the self-buying man who comes in for a Bonobos fitting, is likely a slightly different target than the core female, upscale suburban shopper. (That male self-buyer may be married, partnered or a relative of that core shopper, but as a discrete target, he is an extension of the brand targeting.) Ditto, JC Penny extends to a younger market than the core JCP shopper with the addition of Sephora product and aesthetic in the store. Again, that Sephora-target may be a relative of the core JCP shopper…but a new target nonetheless. That target diversity helps retailers stay healthier. If there are demographic changes, or if the have a target customer merchandising miss (e.g., orange pants for target market were to be a hit, but turned out be a dud, a secondary target, like the Nordstrom Bonobos buyer, adds a hybrid heartiness that can help retailers weather market changes.)
Is this the way to avoid the retail apocalypse?
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Originally published at sellingtothec.com on April 26, 2017.
