The start of 2016 has been a rough stretch for retail, if you’re judging by the headlines. In the wake of the holiday season, a number of retailers have announced mass store closings across the country.
Walmart Stores Inc. leads that pack: In January, it announced that 154 stores in the United States would be closed at the end of the month, resulting in a trimming of 10,000 jobs. That follows a number of other major brands, including Macy’s, Gap, Finish Line and Kmart, which have announced plans to close locations in the near future.
The surface implication is clear: In-store retail is dead. And Walmart’s own statements would seem to reflect that. The company has acknowledged that its current selling model needs to be tweaked, and that the store closings will allow it to focus on its e-commerce sales, where the retailer remains in a hot competition with Amazon to offer consumers the lowest prices possible, per New Brunswick Today.
Experts have noted that Walmart’s approach to in-store selling, which emphasizes a “supercenter” approach featuring massive square footage and enormous in-store inventories, is no longer responsive to changing consumer needs. The company has acknowledged this in the past, and even tested a smaller version of its stores in some markets.
These observations are correct: Walmart’s current in-store selling strategy hasn’t kept up with evolving consumer preferences, or the retail industry as a whole. But it’s a stretch to use Walmart’s struggles as a harbinger of brick-and-mortar retail’s demise.
“Touch And Feel” Shopping Isn’t Going Anywhere
While Walmart is the giant of all retail giants, bringing in more annual revenue than any other company, it hasn’t exactly proven to be a hub of retail innovation. While it struggles to adjust to a new retail economy, other brands are closing stores not to pull out of the brick-and-mortar game, but to shift their strategies toward delivering a better in-store experience.
In some cases, that means turning the physical store into an “e-commerce showroom” — an engaging shopping space that blends the tangible with the virtual. As Retail Dive points out, a recent report from IBM predicts that physical stores will eventually evolve into showcases for e-commerce stores, providing shoppers the same benefits of in-store shopping that online retail can’t offer — in particular, the “touch and feel” experience.
IBM believes shoppers will visit physical stores to examine and experience products first-hand, and try on clothing, before ordering online and having the products shipped directly to their homes.
Such a dynamic relationship between in-store and e-commerce would make sense, given how frequently shoppers currently use mobile devices and online information to inform their in-store shopping. But it also accounts for the benefits of in-store shopping that online retailers simply can’t provide, particularly the ability to touch, feel and try on products, and the pleasure of an immersive, engaging shopping experience.
Retail Dive also argues that the “emotional pull” of in-store shopping has more clout among shoppers than some industry observers like to believe. Major retailers may be closing stores, but it’s not always due to poor performance and a declining interest in in-store shopping. Instead, brick-and-mortar retail is simply facing the start of a grand transformation. While some stores will inevitably close in the process, expect an in-store experience that is merely reconfigured, not rendered obsolete.
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