Future of Retail – A Story
Once upon a time, there was a place where children could find all kinds of toys to delight their little hearts. It was called Toys ‘R Us, but it went out of business this year.
Then there was a place where adults could find all kinds of toys, such as power saws and paint, to wet their desire for home improvements. It was called Sears, but it filed for bankruptcy in 2018 and is closing many of its stores while undergoing a redirection.
Other retailers have filed for bankruptcy or closed hundreds of stores in an effort to improve profits. Some will succeed; others won’t. The list includes popular brands like Gap, Banana Republic, Claire’s, J. Crew, Abercrombie & Fitch, J.C. Penney, Foot Locker, Brookstone and many others.
In 2017, more than 5000 stores were closed and another 5000 store closures have been announced so far this year. (https://clark.com/shopping-retail/major-retailers-closing-2018). Is the future of retail a dim outlook?
We don’t think so. Once Toys ‘R Us closed its doors, retailers like Target and Walmart saw an opportunity to try to grab some of the $3 billion left on the table in the US toy market instead of acknowledging that Amazon had won. According to Manufacturing.Net, “Party City opened 50 Toy City pop-up shops,” and “Walmart says 30 percent of its holiday toy assortment will be new. It will also offer 40 percent more toys on Walmart.com from a year ago. In November and December, the company’s toy area will be rebranded as ‘America’s Best Toy Shop.’”
In essence, retail is not dead; it is just changing. Retailers who want to compete against Amazon will need to up their game and create engaging customer experiences, both online and in brick and mortar stores. Forbes magazine says, “Physical retail is not dead. Boring retail is.” As an example, FAO Schwartz will reopen its Manhattan store (which closed 3 years ago), using theatrical performers as staff and areas for kids to build radio-controlled cars with the help of a mechanic.
Beyond the customer experience, retailers need to better manage their inventory so that all channels have a centralized view of it to avoid out-of-stocks. Retailers will have to have faster inventory turns to keep products fresh for consumers. They will also need to improve their transportation operations to better compete with Amazon, who just announced free shipping during the holiday season with no minimum purchase on hundreds of millions of items.
The story can have a happy ending. A robust transportation management system can help retailers better compete with improved efficiencies and optimized processes. Kuebix TMS is available to any size company. Contact us to find out more.