Looking Forward: The State of Retail in 2018
The countdown to 2018 is upon us. Retail has evolved significantly over the past year, which means that we’ve also seen multiple store closings from legacy retailers including: Staples, Banana Republic, Kmart, Sears, Gap, JCPenney, Ann Taylor, Teavana and Gymboree, among others. While uninspired reporters are calling this “the death of retail,” the truth of the matter is that we are witnessing the death of uninspired department stores and those who fail to get with the times. Innovation is more important than ever going into 2018, as is the importance of retailers selling via their customers preferred shopping channels.
Nothing Less than Mobile-First
More customers are shopping on mobile devices. Recode reports that 34 percent of online purchases will be made by mobile device this holiday season and that this year — for the first time ever — more purchases will be made on mobile device than desktop computer. This shift towards remote browsing calls for mobile-first website design from retailers of all shapes and sizes, since even customers who prefer shopping local want to check out brands for the first time on their smartphones.
This Doesn’t Mean Retail Apps
It is important to note, however, that mobile-first website design is a different proposition than building a branded shopping app. While shopping apps require a substantial up-front investment and may not be feasible for independent retailers, mobile-first design is a more economically feasible option. In fact, TechCrunch recently quoted a comScore study which found that most customers download zero apps per month. The majority of apps that customers do spend time on are social media, video, or messaging platforms. Very few customers actually download and regularly utilize branded shopping apps on their mobile phones.
Legacy Retailers Will Shake It Up
Ready for a broad, sweeping statement? Here goes: Specialization is the antidote to the massive discounting that’s been plaguing retailers’ margins. Legacy department store owners are awakening to the reality that customers just don’t shop the way they once did. As a result we will see more large retailers open specialty stores with nods towards wellness and creating a unique shopping experience. For instance, Nordstrom is branching out into service-only retail locations devoted to tailoring and personal shopping with its new concept store, Nordstrom Local. Nordstrom isn’t the only department store aboard the specialty retailing bandwagon: Retail Dive reports that Saks Fifth Avenue is opening three specialty stores including a 14,000 square foot shoe store, an equally grandiose store called “The Collective” devoted to women’s fashions, and a 6,000 square foot jewelry store dubbed “The Vault.” This begs the question of which will be the next legacy department store to realize the value of choosing a focus.
A Few Closing Thoughts
Retailers need not wait until they start losing customers to build a mobile-first website. Instead, invest in the verticals that are proven to bring brands up to speed now, to avoid getting left behind. It is all about specificity this year, so retailers need to figure out what they’re best at and choose that as their primary marketing focus for 2018.
A Note from A2R:
First, we would like to thank Jasmine for her hard work and dedication this year, she has brought a wealth of knowledge and insight to the A2R Retail Perspectives Blog, and we wish her well for 2018 and beyond, in her work with Retail Minded.