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Retail Apocalypse? Not so fast...

Video Credit: Reuters - Business (Amazon FireT - Duration: 04:47s - Published < > Embed
Retail Apocalypse? Not so fast...

Retail Apocalypse? Not so fast...

Retail brands are investing once again in physical locations with exclusively online brands opening up stores and traditional outlets rethinking their physical retail space.

Havovi Cooper reports.

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Retail Apocalypse? Not so fast...

This is Ikea's first so-called 'planning studio' in the U.S...located in the heart of Manhattan.

Walk in- and you'll notice - the store is much smaller than Ikea's sprawling blue warehouses...On display: only about 1,000 items - just a fraction of the 9,000 or so products in its collection.

The new appointment-only location is meant to lure in- city dwellers with space constraints- who are not driving out to Ikea's stores in the suburbs.

SOUNDBITE LEONTYNE GREEN-SYKES, COO, IKEA'S U.S RETAIL OPERATIONS SAYING: "We've executed it based off of actual research and conversations we've had with real New Yorkers about how they live, what their homes look like, what solutions are they looking for and we've basically taken all of that information and created this unit." IKEA is planning to open 30 new locations around the globe - it's most aggressive expansion ever into major cities.

- a sign that despite fears of a retail apocolypse brick and mortar stores are not dead yet.

Retail Analyst Jharonne Martis.

SOUNDBITE JHARONNE MARTIS, RETAIL ANALYST, REFINITIV SAYING: "For the most part consumers still prefer to go inside a store, look at the merchandize, play with it, become familiar with it before making an educated decision about whether to purchase it or not.

" In fact brick and mortar sales still account for over 90% of total retail sales in the U.S. And that's a number online-only brands can't ignore... Ikea's rival Wayfair will debut its first physical showroom this year near Boston.

Online startup Casper plans to open 200 mattress stores across the U.S. And Warby Parker which started online in 2010 aims to HAVE 100 stores this year... joining a ong list of brands migrating from clicks to bricks, says Denise Dahlhoff from The Conference Board.

SOUNDBITE DENISE DAHLHOFF, SENIOR RESEARCHER, THE CONFERENCE BOARD SAYING: "Just to reach more people, to be exposed to more people, to be in people's daily path." According to a 2018 study by JLL Research - there's a new wave of 'clicks to bricks' stores.... with 100 online only brands planning to open at least 850 stores over the next five years.

As more digital brands get physical- they're changing the layout of traditional stores.

SOUNDBITE DENISE DAHLHOFF, SENIOR RESEARCHER, THE CONFERENCE BOARD SAYING: "The size of stores has shrunk in response to online retail because now online serves the function of displaying all the merchandise so you don't have to do all of that in the stores anymore.

An example is Kohl's which is now reducing the size of their stores and they sublease the vacant space to other retailers like Aldi and Planet Fitness.

They bring in foot traffic and a demographic that fits the kohl's demographic as well.

Even retail veterans like Macy's are reinventing their physical spaces.

In April, the department store launched 'Story at Macy's' - colorful concept shops within their store where the product line-up changes every 6 to 8 weeks.

Other retailers are also getting creative.

SOUNDBITE DENISE DAHLHOFF, SENIOR RESEARCHER, THE CONFERENCE BOARD SAYING: "You can charge mobile phones in stores.

You have smart mirrors where you can take a picture of yourself in a certain outfit, and upload that from there from their, from the mirror to online.

So there are many connections that are online based that have influenced how stores are configured." Other benefits to physical stores versus online- brands get the chance to interact with their customers-- even monitor their interest in products.

SOUNDBITE DAVID MUNCZINKSKI, SVP OF PRODUCT AT B8TA SAYING: "So what we do- through hardware and software that we have in the store, anonymously we track how consumers move through our built environment-.

How many people walk by the store, how many people walk in, how many people dwell with their product and their placement and spend time here and then ultimately, how many convert.

And so its this really rich view of how customers are engaging and demo'ing your product and ultimately buying it that we're able to provide for them." All these innovations in brick and mortar coming as Generation Z is flocking to physical stores..A recent survey found that 95 percent of Gen Z consumers had visited a mall in the previous three months.




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