Like Rocky in Rocky I, II, III, IV, V and "Rocky Balboa" (yes, there were really that many) the retail sector has taken a bit of a battering of late. However, like any prize fighter, the industry could be on the verge of another evolution and fighting back.
The general perception is that traditional bricks and mortar retailers have struggled, those with a strong online offering have fared better, but retailers that have fared best are those dominating the online retail space. With so many traditional stores and household names in trouble, why are businesses still investing in physical stores?
The consumer wants an experience
I've spent my fair share of hours being dragged around many a retail park or designer outlet village; it's even an experience that others have been known to enjoy. That retail "experience" is something that even the best websites can struggle to emulate. However, if all a store has is a maze of rails and racking, then the consumer can feel a little lost. We are now seeing a move towards stores being an enhancement to an online offering.
Retailers have sought to evolve and enhance their offering to customers through a focus on (i) installing technological solutions to improve the overall experience; (ii) diversifying their in-store offering; and (iii) innovating and expanding new concepts.
Look to tech
One way of providing an "experience" is to look to technology. Amazon launched its first checkout-free grocery store under the brand "Amazon Go", where their software "automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart". There's no chance of any freebies though, as the software charges you as you leave the store and a little while later you'll be sent a receipt.
The result is no queues and a stress free shopping experience - well, that was the theory. In fact, the store became so popular that there were actually scores of people waiting outside to get in and spend their money, and has become a quasi-tourist attraction.
Sports Direct have acquired a stake in Game Digital's e-sports business (Belong). According to Newzoo's 2017 report, there are 2.2 billion active gamers across the world – 47% of whom spend money whilst playing. And the attraction is not just from the players – e-sports have a large audience of viewers, which are tipped to reach 500 million by 2021.
If retailers can entice a fraction of that audience into their stores then it opens up not only a new market but a wider consumer base for their existing offering.
Brand "Rent the Runway", the vision of Jennifer Hyman and Jennifer Fleiss, offers consumers the option of a subscription based service which allows customer to borrow items of clothing for a set period and to exchange those items as often as they want online or in-store; a kind of bottomless wardrobe (without having to find the storage space). The brand seems to be a hit, with revenues of over $100 million in 2016 and it is now valued at almost $800 million. The mix of online and retail options combined with their USP seems to be a winning formula.
I'll leave you to form an opinion on whether the idea would be the kind of thing you'd want to subscribe to, but as a method of combining the physical and online, it seems to accommodate the needs of all parties. Rent the runway is a great example of innovative retail, which has captured the target market's imagination.
The evolution of retail isn't about online or offline, it's about choice, price and offering. If you have a good product, a sound business plan, and can appeal to consumers on a number of levels then you could be on to a winner. Analysts may declare that the high street is dying but retail shows no signs of letting up.