Retail’s Only Competition Is Itself

E-commerce didn’t kill physical retail, but forced it to evolve.

Everyone from Bloomberg to The Atlantic has weighed in on the great retail apocalypse of 2017. Retail has indeed suffered, largely because we have way too many malls, we’re spending more money online than ever before and we’re increasingly choosing experiences over material goods. Consumer confidence is up; the unemployment rate is down; wages are growing; the GDP keeps climbing. Yet retailers struggle to keep pace. Meantime, bankruptcy-ridden big box stores like Sears, Toys ‘R’ Us, Mattress Firm and Payless come crumbling down around us.

But have we ever considered that today’s shoppers aren’t captivated by retail because retail isn’t captivating? 2018 alone should attest to the fact that retail isn’t as much dead as it is different. We’ve seen more and more e-commerce brands open brick-and-mortar stores — or in marketing speak, become a full-fledged omnichannel retailer.

Warby Parker, Harry’s, Allbirds, Casper, Everlane, Untuckit are all growing their physical footprint, not just as a second thought but as a growth model core to their business strategy. Digitally native Glossier, whose founder famously wants to put the emotional in e-commerce, makes art and discovery the core experience of its first permanent flagship store. Even Nordstrom — “one of the last remaining dynasties of American retailing” according to the New York Times — bet big on retail this year with a gigantic three-floor store in Manhattan, rising above quiet malls and ominously empty storefronts. Nike ditched its (Trump-managed) NikeTown space on 57th Street for a six-story, 68,000-square-foot tech-fueled concept store called House of Innovation 000 on 5th Avenue and 52nd Street. Gucci’s new Soho flagship ditches the bouncer-like security guard and neatly organized clothing racks for friendly store associates, exposed brick walls and a messier, adventurous setting.

The rules of retail must inevitably be rewritten. But brick-and-mortar retailers need to rebuild from the ground up as more than a glorified warehouse.

The strategy: be what e-commerce cannot.

People don’t leave the comfort of their homes only to return with a thingy in a box. Whether we realize it or not, we walk into stores to view the goods and services we seek in a new context, learn more about what we consume, have an actual person address our unique concerns, be inspired, explore possibilities and feel good about ourselves.

The great retail apocalypse of 2017 left a trail of zombie malls in its wake, with a quarter of American malls predicted to close in the next 5 years. Perhaps the mall would find it useful to revisit its word origin, which comes from the old alley game, Pall-Mall, and then the 17th century shaded London promenade lined with elegant buildings and social clubs.

The less retailers and real estate developers make shopping the mainstay of malls, the more relevant they’ll become to the American shopping experience. In Columbus, Ohio — dubbed the Silicon Valley of Retail — the Easton Town Center is fighting the mall implosion by posing as a bonafide town square, from elevating its open-air design to setting up offices spaces, hotels and apartment units. In the Mall of America, the biggest mall by size in the U.S., you can ride a roller coaster, feed stingrays at an aquarium, play a round of golf, enjoy stand-up comedy, go to the pop-up Children’s Museum or take a stroll through its 30,000 live plants and trees. You could even get married there. And if you felt like it, buy something.

Mall developers also have a thing or two to learn from sports stadiums. AT&T Stadium, affectionately called Jerry World after the Dallas Cowboys’ owner Jerry Jones, is designed as an entertainment mecca that hosts more than just NFL games and concerts. With tours open for people of all interests and ages, the stadium serves as a contemporary art museum and a unconventional classroom for local students.

Malls can no longer remain retail spaces, but complex ecosystems where consumers congregate and interact with brands only if they wish to.

They must take inspiration from physical spaces like cafes, libraries, hotels, resorts and museums, where the goal isn’t always to get consumers to make a purchase but to convince them to stick around for longer.

Retailers also have the opportunity to reduce packaging waste at the checkout counter. Rising online sales means taller stacks of delivery boxes full of bubble wrap and packing peanuts — a recycling problem that consumers aren’t necessarily set up to solve. More than 90 percent of potentially recyclable plastic in the U.S. ends up in landfills, National Geographic reports. Brick-and-mortar can fight this by phasing out single-use packaging altogether and letting consumers decide how they want to take a purchase home. If they choose not to double-bag groceries or hand-wrap every ceramic plate individually, they’ve already taken environmental matters into their own hands.

There is another cause that retailers have yet to fully embrace and champion: gender inclusivity. If our sign-up forms and bathrooms strive to become gender-neutral, why not department stores and changing rooms? From separate toy aisles to color-coded cues, shops are still organized by gender. In contrast, the Phluid Project, dubbed the world’s first gender-free clothing store, is designed to be a commercial destination and safe space for queer people. It looks more like a social club than a shop, and even hosts talks and presentations for the LGBTQIA community.

Nor is it necessary for stores to sign a lease or sell the same thing day in and day out. Services like Fourpost allow entrepreneurs to set up “Studio Shops” in less than a week and take care of logistics such as signage, fixtures, hardware and Wi-Fi. As short-term leases and flexible spaces become the order of the day, we’re going to see more microstores and rotating collections.

Somewhere between a quick grocery run and “Alexa, buy more Q-tips,” the way we shop changed dramatically.

But the companies that think retail is all about convenience are the ones that keep getting it wrong. Thanks to Amazon, that ship has sailed. This is why brick-and-mortar will be better off befriending e-commerce than waging war. The digital must complement the physical. After all, a dull department store is just as painful to navigate as a clunky website.

And what better reason to start inviting customers into stores again than the upcoming holidays? Americans spent an estimated $59.6 billion over Black Friday weekend, while retail sales are projected to hit $1.10 trillion this holiday season, more than a 5% increase from last year. Engaging shoppers at every touchpoint, standing up for causes bigger than itself, embracing flexibility — those are the sort of things that should be at the top of every retailer’s wish list. In 2019, the gift that keeps on giving is experience.

This post was written by Shivani Gorle. ThoughtMatter is a creative branding, design and strategy studio in New York City’s Flatiron District. Find us on Twitter.