Recent news may make it seem like the retail industry is in a free fall, but that only makes for good headlines.
It’s easy for outsiders to point fingers at e-commerce and technology for the surge in store closures, and doom and gloom surrounding retail real estate. But, if you take a closer look you’ll notice that there are just as many reports of retailers growing as those shuttering their doors.
What’s happening to the retail industry?
It’s not just retail that’s changing, consumers are too. Consumer behavior is evolving along with technology, leading to increased demand for a blended online and offline shopping experience. Retail is becoming more digitally focused, but physical stores still hold their value.
Here are a few retailers who have recognized these trends and are succeeding despite the retail real estate scare.
- Off-price retailers like Ross, TJ Maxx, At Home (Buxton Client) and Burlington Stores.
The recession led many consumers to adopt a more cost-conscious approach to spending, and while the economy has recovered, consumers haven’t looked back from their deal-seeking ways.
Discount retailers have been on the up and up ever since, so much so that competitors are trying to grab a piece of the market. Gordmans, an off-priced department store, is reformatting its supply chain to compete with more traditional discounters like TJ Maxx and Ross. Operations enhancements aren’t unique to apparel, as discount home décor retailer At Home is adopting a fast fashion-like approach to home goods to keep inventory fresh and attract consumers more frequently to their physical stores.
- Discount and high-end grocers like Sprouts Farmers Markets (Buxton client), Lidl, Aldi and Target.
Traditional retailers aren’t the only businesses needing to adapt to changing consumer preferences. The middle market grocer has seen stiff competition as big box stores and international transplants lure in more shoppers.
German brands Aldi and Lidl are seeking to capture U.S. market share through a consistent customer experience as well as lower prices. While low-price big box stalwarts are diversifying to stay relevant. Target is remodeling 600 stores by 2019 to grab more grocery shoppers, while Walmart is embracing the omnichannel trend as seen through acquisition of online outlets Jet.com and Bonobos.
- Specialty retailers O’Reilly Automotive (Buxton client), AutoZone, Dick’s Sporting Goods, Sephora and Ulta.
Automotive retailers are succeeding as consumers focus more on maintenance and less on upgrading to the newest model. Sporting goods retailer Dick’s Sporting Goods has filled a void with closures of other similar retailers like Sports Authority. The retail success doesn’t stop there.
The cosmetic industry is booming right now due to retailers like Sephora and Ulta that are defining what it means to mesh technology with customer experience. Both retailers have nailed the omnichannel strategy to engage their target customers, are pivotal strategy in today’s retail landscape.
What can you learn from these retail success stories?
While e-commerce was an easy target for many retailers to blame, the reality is consumer behavior has changed and these retailers are taking note to stay competitive. The economy has started to bounce back, but many consumers are still hanging on to recession-era habits, and retailers need to take note.
Do you really know your customers?
Customer analytics in the retail industry, from apparel to autos, is the key to unlocking insights about your customers and staying relevant in the changing minds of consumers. Analytics can help provide insight as to where to open new locations, the relationship between online and in-store sales, and how to market to the customers that provide you the most value.