Changing the Game

The Annual State of the Industry Report is the centerpiece of this issue of Chain Store Age, and it’s a great read. It’s also very timely.

Prepared by the brand and design experts at Interbrand Design Forum, the report is entitled “Game-Changing Innovation.” It comes at a time when a convergence of technologies — from smartphones to geofencing to augmented reality — is changing the face of retail in ways that couldn’t even be imagined a few short years ago. New technologies are not only changing the way consumers shop, but also the physical appearance of stores and the systems used to run them. Retail companies that don’t adapt quickly risk losing out.

But as the report makes clear, retailers are by no means letting the parade pass them by. From Adidas’ in-store virtual footwear wall to Target’s new City Target format, companies of all sizes, from small merchants to mega-chains, are finding new ways to connect with customers, improve their shopping experiences and respond to shifting consumer preferences.

The report also contains the Chain Store Age Top 100, our annual listing of the largest U.S. retailers. The ranking is based on total annual revenues for each company’s most recently completed fiscal year. We think that makes it the most definitive ranking of its type.

The Top 100 retailers reflect the evolving nature of the industry and the innovation that is redefining it. Safeway, for example, is now delivering promotional discounts directly to its customers’ loyalty cards, and Starbucks is expanding in-store mobile payment options. Sears and Kmart set up mobile shopping walls in airports, bus shelters and movie theaters last year that allowed holiday shoppers to buy goods via QR codes. Talk about convenience.

But innovation is not just about technology. Neiman Marcus and Target have joined forces to create a special holiday collection that will be sold across both chains. Nordstrom is teaming up with trendy British apparel retailer Topshop to open dedicated in-store shops in select Nordstrom stores. And J.C. Penney has partnered with Canadian cheap-chic brand Joe Fresh to open in-store shops across the Penney chain as part of its ambitious makeover.

At the same time, many of the Top 100 companies are exploring new prototypes, new markets and new ways to expand existing footprints. Giant Eagle will soon debut a new value supermarket concept, Valu King, and Gap is getting ready to open the first brick-and-mortar location for its online Piperlime brand. Nordstrom is branching out to Puerto Rico (and has finally signed a lease to open in Manhattan).

Starbucks is going beyond its coffee roots to open juice bars, and it’s also entered the fast-growing upscale fast-food sector. With its recent acquisition of Bay Bread and 19-store La Boulange bakery brand, it hopes to expand the French bakery experience across the United States — the same as it did the Italian espresso bar. Meanwhile, extreme value retailers Dollar General and Family Dollar continue with their dizzying expansion.

There is a lot happening in the retail space. As the Interbrand report puts it: “The retail game will never be the same.”

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