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THE FACE OF RETAIL IS CHANGING:

The Incredible Shrinking Expansion

THE FACE OF RETAIL IS CHANGING:

The Incredible Shrinking Expansion From the beginnings of time, up until, oh, about five minutes ago, growth (success, expansion, and market domination) for a retailer was pretty cut and dry to define. It meant growing in a very literal sense: growing your retail footprint by increasing real estate so you could sell more things and continue to grow and sell and grow and sell and so on. More space was more sales and that was that. Today? Not so much.

IT’S BUSINESS REINVENTION TIME The way that people interact with each other and the world around them is evolving at an unprecedented rate. Social media, wireless connectivity, and mobile applications allow shoppers to, for example, post images of themselves modeling potential clothing purchases to their Facebook or Instagram pages for immediate peer feedback. In some stores, those same shoppers can then scan that merchandise to be purchased instantly and delivered to their home. No in-store checkout. No bags. No cashier, just a click of the smart phone. Everyone’s favorite big box store, Target, is one of the retailers leading this next wave of retail reinvention, as explained in a recent video the company released on its “A Bullseye View” webzine via YouTube.

“[Mobile is] the connective tissue for all of our strategies going forward.” -Casey Carl, president, multichannel, Target

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THE FACE OF RETAIL IS CHANGING:

The Incredible Shrinking Expansion

EVERYBODY’S DOING IT It’s not just the big box big guns paving the way for this retail reinvention, British luxury clothier Burberry has recently made headlines for “going the way of Minority Report” by fully embracing mobile, both by moving the bulk of its marketing efforts to the digital world and by revolutionizing the use of mobile technology on its sales floor. The brand’s flagship in London employs sensor technology that reads available information on customers’ mobile phones as well as RFID (radio frequency identification) tags in the merchandise they’re carrying in order to track path-to-purchase and help sales staff personalize customer service. At the same time, major grocery chains such as Safeway are moving forward with dynamic mobile applications that personalize savings to the individual shopper. And department store dynamos from high end Nordstrom to middle end J.C. Penny are rethinking the age-old cash register line by implementing mobile checkouts in the hands of their employees. All of these changes are affecting how store planners and designers configure retail space. Traffic flow is changing even as the data to track that flow is gaining sophistication. Beyond nuts and bolts, environmental aesthetic has become more important than ever as shoppers have begun to expect the same pristine, staged beauty of presentation they find in their online shopping expeditions when they hit the streets to shop at brick and mortar stores.

REPURPOSING RETAIL REAL ESTATE THE RECENT GLOBAL RECESSION CLOSED THOUSANDS OF SHOP DOORS. NOW THAT THINGS ARE LOOKING UP, THERE ARE MILLIONS OF SQUARE FEET OF RETAIL SPACE THAT NEEDS TO BE BACKFILLED.

“Many retailers will be occupying smaller store fronts and while increasing distribution space. This strategy is especially evident in hard goods that occupy a lot of floor space and are more easily delivered to the home from a warehouse.” -Mike Dillon, Dillon Retail Group

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THE FACE OF RETAIL IS CHANGING:

The Incredible Shrinking Expansion When the economy fell on hard times many established retailers who might have otherwise hung in there long enough to reposition themselves for this modern age of mobile retail were unceremoniously forced to close their doors, permanently. They left, in their wake, an abundance of ready-to-fill retail space that savvy retailers today are snapping up and repurposing for their own uses.

Less and less we’re going to see Walmart constructing another super center. More like putting a Walmart Neighborhood Market in a vacated Circuit City location. GROWTH IS FOR INNOVATORS The internet, that famous and infamous competitor of pretty much every other retailer on the planet, these days, has found a way to be almost all things to almost all people. Be they organic gardeners or vintage motorcycle mechanics, online retailers offers every item on a given shopping list, often at a lower cost than the boutique down the street, and with the convenience of direct shipping. For retailers to compete with this, they need to find new ways to provide what the internet cannot. Things like:

Community space. Emotional connection. Locally sourced goods. Friendly human faces. A tangible experience. The smell of bread baking. A real niche offering.

USA Today Just as online retailers led a revolution in retail shopping in the 1990s, bricks-andmortar retailers are ready to use technology to fight back. By the time you walk into a store in the near future, the employees there will probably know what you want to buy, based on information on your trusty phone or tablet. Merchants will know your gender, age, race and income.

August 2012

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THE FACE OF RETAIL IS CHANGING:

The Incredible Shrinking Expansion

A CONVENIENT PHARMA-GROCER When the goal becomes being all things to as many people as possible, it’s easy to see how traditional retail categories are becoming blurred. Today’s pharmacies have soda fountains and sushi bars (ie., Walgreens). Today’s big box stores sell produce and have pharmacies (ie., Target). Today’s convenience stores sell locally sourced gourmet sandwiches and organic wines alongside Skittles, Camel cigarettes, and gasoline (ie., Oregon’s own Pacific Roads). And mega crossover kings like Fred Meyer are getting national attention for having all of the above, including fully stocked department store s, groceries, jewelers, and more in a single one-stop location.

PEOPLE SHOP WITH ALL FIVE SENSES For goods with relatively objective “quality” such as electronics, office supplies, or textbooks, modern shoppers rely on online reviews, product descriptions, and comparisons - then click to buy. That said, subjective quality still applies and it applies heavily. Subjective in the sense that each person wants to make their own personal judgment call on the product’s value. They want to see that product in person, touch it, push its buttons, and be wooed by its packaging. Retailers today have the opportunity to foster that desire to “experience it” by providing retail environments that complement online research in a way that’s invaluable to the shopper by turning the shopping experience into an enjoyable and appreciated journey, ensuring they’ll return to the store again and again.

“More and more, the kinds of things that are succeeding in the retail world are experiential.” -Charlie O’Donnell Partner Brooklyn Bridge Ventures

KING RETAIL SOLUTIONS KRS (www.kingrs.com) has been providing award-winning retail store design, manufacturing, distribution and installation services to local, national and global retail clients for over 45 years. In each of these service areas, we are recognized as industry leaders. For more information on how KRS can help you connect with your customer, make a lasting impression, boost brand image and drive sales, contact us today:

BUSINESS.RELATIONSHIPS@KINGRS.COM

800.533.2796

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The Incredible Shrinking Expansion  

The Face of Retail is Changing

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