The past week has been headline after headline of the changes in the retail landscape. As usual, Amazon is causing a lot of the fuss or fanfare, depending on where you sit. Retail shopping must rally itself or retail shopping as we know it could be gone forever.
In case you missed it, here’s what happened:
Amazon Makes Whole Foods Whole Again
Amazon purchased Whole Foods for nearly $14 billion (with a b) this past week. Per the BBC, Amazon has wanted to get into the grocery business for some time now, and this purchase could be game-changing for the grocery industry. Of course, the only reason they could buy Whole Foods is because the grocery chain founded in Texas in the late 70s has been suffering from declining same-store sales, among other challenges. Not only that, their pop culture nickname, “Whole Paycheck,” indicates that prices were not competitive with the increasingly saturated organic and healthy food market industry.
Amazon is Thinking Out of the Box for Fashion Forward Customers
Not coincidentally, Amazon is crushing clothing sales, too. They announced this week that Amazon is entering the fashion subscription box business. It’s called Prime Wardrobe, and subscribers will choose at least three pieces or related accessories, and Amazon ships them. Customers have a week to decide if they want to keep them (and pay for them) or ship them back.
Clothing Retailers Continue to Lose Their Shirts
In the battle of the sales channels, e-commerce is beating the pants off retail, quite literally. Last week major retailers announced Chapter 11 reorganization and the shuttering of retail stores.
First the Women…
Ascensa Retail Group, have made plans to close as many as 650 stores over the next two years. Ascensa owns the brands Dress Barn, Loft, Lane Bryant, Ann Taylor, Maurices, and Catherines. Per, Retail Customer Experience, the CEO said they would close the stores because of “persistent traffic decline.”
…Then, The Children
Ascensa also owns Justice, a girl’s clothing store, which is also on the list to have many brick and mortar locations closed. However, Justice isn’t the only ailing children’s store. Gymboree, another children’s clothing retailer, filed for Chapter 11 bankruptcy last week, announcing that they would also close up to 640 of its 1,281 locations.
These changes in the marketplace have wide-reaching and significant impacts on the U.S. economy, too. Earlier this year, Bloomberg reported that many malls are defaulting on their retail mall loans. Wall Street speculators think that this problem is widespread in the retail mall space and are positioning to profit from this collapse. Mortgage bonds that were sold in 2012 stand to create the “next big short,” much like the mortgage-backed securities that went belly-up due to the subprime home loans in 2008. Instead of a massive crash, however, pundits describe the U.S. shopping mall’s decline into irrelevancy as a “slow-bleed.”
Retail’s Big Advantage
I am always very keen to say that people still like to feel and touch the things they are buying, provided they are not commodities. Obviously if you need stationery or a household cleaner, you probably don’t need to feel or touch it. However, for some purchases, customers want to talk to someone, ask questions, and see how a thing looks when it isn’t displayed in pixels. When there is trouble, customers want to speak to a person about it, to feel that it is taken care of and resolved. Ostensibly, retailers want the same things. Here is an important advantage that retail stores have over online entities, even big bad Amazon.
Amazon knows it. Amazon is trying hard to offer this option if there is a problem. Customer service representatives will phone you back upon request to help sort it out. However, I have had a bad experiences with this process. Just the other day, the woman who called me didn’t know what she was doing. I could hear her manager or co-worker telling her what to say! To be fair, she admitted she was new on the job. But also, this experience did not replace a customer service desk in a store, if for no other reason than I might have been more patient if I had seen her trying hard to learn her new job (I am not a total git, after all).
For all these reasons, I still believe retail has an active place in Customer Experience, but only if they play to their strengths.
Digital is Trying; Retail is Not
Macy’s is not trying as hard as Amazon. Macy’s is another troubled retailer contributing to the collapse of the shopping mall, usually dragging them down from the anchor position. I have not stepped foot in a Macy’s for years, however, the last couple of times I did, the store was messy and had too many confusing sales. You never knew what anything cost. Not only that, finding someone to check out felt like the search for cheese in a maze. This experience offers no advantage of a human presence to improve the retail shopping experience.
It is true also, however, that sometimes we like to go into a store to see something in its physical form and then go home to shop comparatively online. Retailers call it showrooming. However, showrooming could have advantages for retailers, particularly if they take advantage of the comparative shopping step while the customer is still in their brick-and-mortar location. They could provide kiosks perhaps or a helpful associate armed with Wi-Fi, a tablet, and a special offer if the customer orders right then.
But you rarely see this. In fact, it seems that the digital space is working hard and fast to get into the retail space but the retail space isn’t working so hard or fast to get into the digital space. This lack of effort on retailers part is contributing to their demise.
It’s Time for Retailers to Take Advantage of Their Advantage
As global Customer Experience Consultants, every Customer Experience has, what we call, an Emotional Signature®, whether they are deliberate about it or not. An Emotional Signature is how a customer feels about your organization, the level of their emotional engagement with your brand. Positive and effective human interaction during the Customer Experience is the fastest way to pump up your retail experience Emotional Signature with your Customers.
Taking advantage of this human presence is the key to retail’s survival. It means getting personal, interacting with people, finding a way to leverage the emotional connection that occurs in a brick-and-mortar Customer Experience.
From taking over troubled food retailers to fashion-forward thinking about online clothes shopping, Amazon challenges traditional retail stores to rethink their strategy. Moreover, retail stores need to play to their strengths—or vanish by showing their weakness. For many of these ailing retailers, resuscitating their Emotional Signature with an extra focus on human interaction could save them, and retail shopping as we know it.
What do you think brick-and-mortar retailers should do to keep from becoming an irrelevant channel in an increasingly Amazon-ed world? Please share your insight in the comments below.
Learn more about keeping your employees and customers happy in the digital or retail space register for our FREE webinar ‘Anatomy Of A Customer Experience’ being held on 27th June.
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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.
Follow Colin Shaw on Twitter @ColinShaw_CX