“Closing stores starts a spiral that can’t be stopped,” posited Hudson Bay Company CEO Jerry Storch on stage at Shoptalk in Copenhagen this past Monday. The strategy for 2018 and beyond: Play to Win. Sure, like most retailers, HBC may have a few duds across their chain, but unlike many retailers, they aren’t just closing down stores. Instead, the company which owns the likes of Saks and Lord & Taylor is retooling and investing in underperforming stores, modifying the footprint and concept to better address the local market, and making technology investments that connect stores and online shoppers – driving value to an ever-more integrated set of channels. “Be great in stores and be great online,” according to Storch.
How can you “Play to Win” like Hudson Bay?
1. Avoid the “Death Spiral”
Stores provide a core anchor of experience for retail, without which ecommerce sales have been shown to suffer with customers in a given market. Retailers need to think more broadly about the consequences of closing stores to avoid the “spiral” Storch refers to. Sure, there are duds stores out there but, beware of shuttering diamonds in rough.
2. Embrace Local and the Store at the Center of the Local Market
Storch pointed out that stores at the nexus of a population are a rich opportunity for retailers to connect to local trends and customer behaviors (drivers of sales), something that ends up lost in translation in the shift to ecommerce. Additionally, for most, there is an untapped efficiency in the immediacy of product availability provided for customers by the store. This taps into customers’ desire to get items immediately at a drastically reduced cost to the retailer compared to trying to compete head to head with Amazon’s fulfillment power.
3. Be Great at Stores and Online
There is no denying that today’s customer is online and mobile, and the fact is that the customer who shops solely in store is dwindling to single-digit percentages. The key is to leverage the store digitally, bringing the store to the customer so that the customer comes to the store, and retailers can make the most of their brick and mortar. Harnessing the power of both, in the right way, at the right times, is the recipe for success.
Storch’s presentation was a fitting opening to Shoptalk Europe, as well as, forward looking perspective on success in 2018. There will certainly be more store closures and brand failures, but for those with the ability to capitalize and invest- the recipe is clear: doubling down on stores and doing so smartly is the key to success. If you’d like to learn how Radius8 can help you leverage local data and signals to connect with customers locally so that you can “Play to Win” in 2018, reach out to me or a member of the Radius8 team and we’d be happy to set up a demo to show you how.