Looking to the Future

Think brick-and-mortar retail is doomed in an increasingly digital world? Visit Sephora, where consumers line up to sample the dizzying array of beauty products. Watch as a bunch of excited kids go through the rounds at Build-A-Bear-Workshop. Listen as a pharmacist at Walgreens gives some advice to a harried mom whose kids are coming down with something. Stop in at H-E-B, Whole Foods Market or some other great supermarket and breathe in the tantalizing aromas. Fool around with the latest gadgets at Apple or one of the new generation of AT&T and Verizon stores. Sign up at Lululemon for a yoga class.

I could go on (and on), but you get the idea. The stores above are just a tiny sampling of all the great retail experiences that exist in the brick-and-mortar space. They are my rebuttal to all those pessimistic pundits who claim that e-commerce, via smartphone, desktop or some other device, will, by and large, be the death of physical retailing. Enough already.

The truth is the digital onslaught is reshaping brick-and-mortar retail in ways that will ultimately make it stronger going forward. Savvy retailers across the board, from Macy’s to Walmart to Gap, are reinvesting in their store experiences to make them more entertaining, interactive informative and fun. The smartest are focusing on their trump card: tangibility.

Brick-and-mortar naysayers often point to the slowed pace of expansion and store closings as evidence of brick-and-mortar’s decline. There is no denying that many big players have pulled the reins of expansion and shuttered locations. But in the apparel sector at least, this has as much to do with new com petition and changing tastes as anything else. New fashion powerhouses such as H&M, Uniqlo (both of whom have serious U.S. expansion plans) and Forever 21 have taken market share from more established chains, wooing customers with their fast fashions and value prices.

And while big-box chains may not be building big anymore, they are still building. Walmart has doubled the projected growth of its small-store format, and now plans to open from 270 to 300 Walmart Neighborhood Market and Walmart Express stores in its current fiscal year. This July, Target will test a smaller (20,000-sq.-ft.) footprint, TargetExpress, in Minneapolis.

At the same time, new retail concepts continue to pop up across the board. Take, for example, Fresh Thyme Farmers Market, a new specialty grocery format featuring value-priced healthy and organic offerings. The company, headed up by the former CEO of Sunflower Farmers Market, plans to open more than 60 stores in the Midwest in the next five years. It will open its first store this spring, in Mt. Prospect, Ill., with eight more locations to follow by yearend. One of my favorite new concepts is Polaroid Fotobar, where customers can turn photos taken on mobile devices into custom photo products.

I'm not naive. Retailers that fail to keep up with evolving technology and increased shopping sophistication are unlikely to thrive going forward. But there is plenty of opportunity for those that seize the moment and put the spotlight on the in-store experience.

Marianne Wilson

mwilson@chainstoreage.com

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