One of my favorite memories as a child is tagging along to go Christmas shopping with my mom. We’d bundle up, pile into the car with a list in hand, and head to the nearest mall. Rescue Mission bells, holiday jingles, and the noise of busy people filled the air. Today, Christmas shopping is a little different – not just because there is no one to treat me to Auntie Anne’s – but because the mall just isn’t the same. Well, retail isn’t the same.
Ghost malls, the hollowed shell of a once bustling retail center, are growing in America. According to The Atlantic, a recession might be to blame for the demise of malls, but a rising GDP, low gas prices, and low unemployment say otherwise. Instead, the change is us. We prefer e-commerce over malls, experience over price, and convenience over anything.
“The emergence of e-commerce changed the game. As hybrid commerce has picked up steam in the last five years or so, the question now isn’t how many stores can I put in the market, rather it is what is the right number of stores needed in the market to support an omnichannel strategy,” said Bill McKeogh, a location analytics and data expert with Pitney Bowes.
Sure, some brick-and-motor stores are doing well, but in general, we prefer to do the bulk of our shopping online. An interesting study from Deloitte found that not all stores are closing, but rather a certain kind. “Balanced” retailers which use both price and promotion to deliver value are doing worse than price-based retailers, which offer the lowest prices, or premier retailers, which deliver value by offering unique products and experiences. Experience is key when it comes to engaging consumers – especially millennials.
“Retailers value their physical store presence and with data-driven insight they can create a differentiated and personal experiences in store by adding local elements that resonate with their customers,” shared Andy Reid, Global Head of Retail at Pitney Bowes. “Moreover,” he continued, “as retailers adopt this customer-centric approach it enables them to build their bottom line by focusing less on which category is selling and more on what the customer is buying.”
Premium retailers that focus on engagement have seen an 81 percent increase in sales over the last five years, while balanced retailers have gained a mere 2 percent. Customers are more likely to spend their money at stores that engage them both in-store and online that understand their changing needs.
“The consumer just expects that it works,” said McKeogh on hybrid commerce. They don’t care how you get it done, but “one negative experience and you may never get that customer again.”
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