Retail has a bright future!
Even though over 9,300 stores in the US closed down in 2019, several others thrived and grew. A good example is reopening of a couple of Toys R Us stores in the US after the liquidation of more than 1,000 locations since 2017. The new feature in at least one of the Toys R Us stores is a seamless shopping experience.
Emphasising on the opportunities, Stefan Otte, vice president for global real estate & partner retail at Levi Strauss & Co. said, “Retail is still an opportunity. Retail will grow, but retailers might shrink.”
With more than 3,000-store network, Otte shared Levi’s growth strategy, “We have opened one store every week in Europe over the past five years. We have undertaken what’s called ‘curated expansion’, which goes beyond just opening a store. We have to get into the right locations, address the right consumers to be able to record the correct financials. We also have to evaluate our portfolio to be able to relocate or even close down non-performing stores.”
Among factors driving the growth of retail concepts include predicting and exceeding consumer expectations. And today, consumer expectations are diverse across the age groups – Baby Boomers, Generation X, Millennials and Generation Z. While there is a massive variance of choice among the decision-makers – Baby Boomers, Generation X and Millennials – the influencer category comprising the Generation Z is also getting stronger.
Overall, rethinking and re-evaluating the rules of doing business – keeping engagement at heart – and creating an experience-driven economy are the ways ahead for the success of retail.
Despite opportunities, there are various challenges facing retail. Oversupply in some markets is a considerable challenge. Lack of differentiation is causing certain brands to perish. Creating retail spaces without imagination is resulting in footfall decline. Digitalisation for the sake of digitalisation is proving to be futile in delighting customers. Opportunistic relationship – between landlords and tenants, franchisor and franchisee – is hurting retail.
However, retail still has a bright future, if the opportunities are leveraged well.