DDi - July 2012 - (Page 72)
72 | Think Tank
Retail’s Darwinian moment
harles Darwin believed that only the strong will survive. In today’s retail environment, we’re in the midst of a Darwinian moment like never before—and it is not enough just to be strong. Strength, smarts and fearlessness are all characteristics that retailers will require, in high doses, to survive the paradigm shift we are witnessing in the current climate of consumerism.
For department stores, being strong, smart and fearless means evolving traditional approaches to remain relevant with modern consumers in the face of increased competition.
But, how exactly do they do this? The answer is simple: by remembering what originally made them successful. Department stores inherently have a number of unique strengths, and if they learn to leverage these strengths in new ways, they will be well positioned to survive in the new marketplace and even lead the industry. For example: • Department stores have plenty of square footage. With laserfocused planning of physical product category square footage allocation, combined with technology-enhanced product displays, RFID-enabled stocking efficiencies and strategic leveraging of their websites, department stores can reduce the amount of physical area required to showcase pure product and turn over the surplus area to providing unique customer experiences. • They have tremendous access to buying power. Department stores, whether on a regional or national level, can leverage their buying power to demand exclusives from designers—such as limited-run collaborations, exclusive product offerings or special events. This is an advantage smaller retailers don’t have. • They have clout. As anchor tenants, department stores are major stakeholders in the malls where they reside, with the clout to push 24/7 programming vital to driving traffic. They have fantastic neighbors in the mall tenants—the specialty stores—and the corporate relationships to forge strategic alliances with these neighbors to create synergies that are mutually beneficial. • They are all about convenience. The one thing that shoppers can’t buy is time, and they have less and less of it every day. The department store can look to its roots, and provide a wide selection of relevant offerings to provide the “one-stop shopping” alternative while still maintaining a curatorial edge.
• They have marketing power. Department stores have enormous marketing budgets. These budgets can be shifted from pure commercial advertising to community outreach—strengthening their connection to the communities where their stores are located. I suspect all retail executives are keenly watching how the current transformation at J.C. Penney unfolds. I hope their chief change agent, Ron Johnson, doesn’t lose heart or succumb to stockholder pressure to return to the status quo. While I question some of his strategies (like making customers stop couponing cold turkey and expecting long-term shopping habits to change overnight), I firmly believe that he will succeed if he is bold enough to stay the course—if he stays strong, smart and fearless, and leverages the unique strengths of the department store channel. For all department stores contemplating changes, whether in the physical environment, product strategy or operations, they must never forget that at their birth, they were rooted in convenience to the customer and that core tenet originally made them successful. The same strengths, modified for the current marketplace, will lead them into the future.
—Kathleen Jordan is a principal in Gensler’s New York office, and a leader of the retail practice with more than 24 years of experience across merchandising and design development all the way through construction documentation and administration. Check out her latest thoughts on retail trends at www.gensleron.com, where she is a regular blogger, or contact her at firstname.lastname@example.org.
Table of Contents for the Digital Edition of DDi - July 2012
DDi - July 2012
From the Editor
From the Show Director
El Palacio de Hierro
Global Department Store Summit
State of the Fixture Industry Roundtable
2012 Fixture Leaders listing
2012 Fixture Leaders company index
DDi - July 2012