Traditional retailers continue loosing ground to online sales. Thankfully Christmas season is here. The shopping trends have certainly moved away from massive department stores and toward easier click websites. I don’t look intently at numbers week to week but the shopping season is here and most will see an increase.
The trend toward online is real and although it will never replace brick and mortar storefronts, it will damage them enough to rearrange the retail landscape toward something quite different. The real punch may be a few years off however. Some will disappear altogether unable to bear up under slumping numbers. Slow earnings over a long period of time force companies to adapt and get creative. It’s never fun to come up with new ways to make money, especially because it requires buying new product or investing in new ventures.
Store owners, and I imagine shareholders, hate investing in a “Well let’s hope this works type” gamble. My experience is with small local companies so our flexibility is a little better. Private stores don’t have to match projections like public ones to satisfy shareholders. A few years ago my store sold Power Balance bracelets and increased the daily totals by around 20%. They were faddish, based on “energy” and had unproven health benefits, same with the magnetic ones. It helped though.
New product can get small businesses through rough patches in the short term. Local shops benefit from trinkets like spinners and bracelets. Expect to see more of that. Also longer hours and free shipping should be used to boost daily totals. Workers hate longer hours of course and increased payroll has to be weighed against expected sales. But it might help.
Free shipping on orders above a threshold, say $50 dollars, is anther option. Consumers are clear about their preference for buying product over the phone and having it shipped. We have seen a slight bump in this.
Stores that don’t have an online option will need to get one quick. It can be the difference in getting the sale and loosing it. I’ve noticed an uptick in local customers that want a shipping option. Most of the larger retailers, Dicks Sporting goods and Target, made the adjustment years ago.
Retailers should get back to what they do best, offer great service and as many exclusive offers as possible and shed dead weight. Dead weight is anything that doesn’t pay off within a calendar year. For us it’s shoes. Shoes are a tough sell because of all the offerings, sizes and colors. Let the big guys do shoes.
The difficulty for retail stores is always the same, how to buy inventory and stock up without holding product that won’t sell. It takes up space in warehouses and stock rooms and needs to be cleared out in less than 6 months. Full stockrooms eat up available cash and limit the amount of room for new stuff.
Companies that hope to survive in the disappearing retail environment need to get creative. The advantage they have over Amazon is in their closeness to the consumers. By adding small trendy offerings and building up their online presence with shipping they have a better shot at weathering the storm.