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The apocalypse is over, prepare for the retail renaissance

By Jackie Mallon

Nov 14, 2022

Fashion

Image: Holiday shoppers, Ph FashionUnited

The retail apocalypse which dominated headlines just a year ago has become a retail resurgence, according to Nikki Baird, Head of Strategy at Aptos. “Never before have we seen such an emphasis on the store and what it can really bring in terms of operational efficiency, customer engagement, upselling," she tells FashionUnited. "It’s an exciting time.” But are we ready for it?

During the pandemic this sort of prognosis would have sounded like a throwback to a pre-Amazon golden age, but Baird also warns us to expect glitches. For the last couple of years due to lack of footfall, retailers were not investing in in-store technology. This has led to a replacement cycle crisis which also runs afoul of the current supply chain challenges with regards to hardware. Baird explains: “A large number of payment devices are going out of compliance from a security perspective and must be replaced. Cash registers or tills use two really old Microsoft operating systems specific to retail that are being retired within the space of a few years. Retailers have to replace everything, the hardware, operating systems and the software that runs on top.”

Brick and mortar resuscitation

No one likes to see their favorite stores closing or streets lined with empty real estate. This was another unfortunate result of everyone shopping online for two years combined with an underestimation of the power of the in-person experience for the Gen Z consumer. “For as much as time as Gen Z spends online they want a counterbalance to that and if you can make the store experience attractive, they will come,” says Baird. “The hard part is defining what that experience is.”

Retailers should invest in customer interest and service-oriented activities. These tend to be more labor-driven which means more hiring. Old default tactics for attracting customers such as trunk shows or throwing a big sale will no longer cut it. Levi’s offering customers the chance to embroider their jeans or change out the buttons is an example of successful engagement strategies. Says Baird, “It becomes participatory. It speaks to the need for personalization. You can’t do it online. It’s worth coming to the store to experience.”


Tech is not a bad word

At retail conferences technology rarely gets a mention at the minute but there’s no ignoring the reality that the internet exists. “We’ve regressed a little, almost like the store is a tech-free zone,” Baird says. “It’s not about the technology being in your face, but it is about it being a seamless part of the experience.”

Associates drive engagement

The evolving role of the sales associate will be vital to the new in-store experience. Retailers want their associates to have a mobile device to be able to walk through the store and interact with consumers who have been in the habit of shopping in front of a screen. Mobile carts which can be moved through the store, and sales associates who can fold and bag for you on the spot make the cash register counter no longer the epicenter of the store experience. It may indeed be removed in many cases. Says Baird, “Pulling the cash wraps out of stores to open the space up could really reshape what the store looks like in the next 3-5 years.”

But operationally there are some challenges. The device to remove the security tag must be accessible to associates on the move but not to customers which would increase theft.

No stop to pop-ups

“Pop-ups are an experiment in location and format allowing brands to test new markets before committing, and as a strategy it will continue,” says Baird. A recent example is October’s decision by NYC-founded cupcake company Baked by Melissa to choose Boston for its first out-of-state expansion. Opening a pop-up in the city’s Seaport area was based on the high number of orders they received from Boston during the pandemic. Now the company can test if the Boston cupcake consumer’s behavior extends beyond the pandemic before committing to a long-term real estate contract.

Short-term leases to fill the retail gaps in malls and shopping centers are increasingly popular. Popable, founded in 2017, has swept in to play matchmaker in the space. Already working with real-estate partners like Simon, Kimco, and Brookfield Property Partners, they recently welcomed Walmart to their more than 10,000-strong stable of brands. In time for the holiday shopping period, Walmart will rent out short-term and front-of-store space to small brands seeking to avoid those cripplingly high long-term leases.

The all-important fitting room

“If I had a business, the fitting room would be front and center,” says Baird. “They would be luxurious and there would be so many of them because that is where I would want everybody to be.” She describes a not-too-distant future when consumers might interact with the mirror and a requested size will drop from the ceiling in a vacuum tube. The moment of conversion happens in the fitting room, so making it the most satisfying experience for the consumer should be every retailer’s priority. Neglected during the pandemic, it will now play a central role in a store’s success.

The opportunity of returns

Retailers should not attempt to emulate Amazon’s return policy because it would not only be impossible but a poor business move. When consumers return an item to the store it is an opportunity for engagement and to sell something else in its place. Says Baird, “You don’t want to inconvenience the customer but you don’t want to make returns so gratuitous that it’s just like a drive by. There’s a happy medium.” A conversation about what went wrong with the item and what can be done to make the customer happy will go a long way to rebuild post-pandemic costumer loyalty. It could also help discourage bad pandemic-fueled behavior such as bracketing, the practice of carelessly buying multiple sizes online, keeping one, and returning the rest. To address the unsustainable aspect of online returns (packaging waste from mailing, goods not always going back on sale) retailers might offer a discount if the item is returned in its original bag.

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