Chasing the Customer … but to where?

Shopping center retail space grew a 2 X the rate of the population for most of the last decade.

U.S. retailing has basically operated under the theory that the only way to growth was to build more or bigger stores. Today, the U.S. has an average of 23  to 46 square feet of retail space per capita, depending on the market. Compare that  to India, 2; Mexico, 1.5; Canada, 14; Australia 6.5; France, 2.3 and Italy at 1.1.

In the 2013 holiday shopping season, ShopperTrak reported a 15% decline in foot traffic vs. last year. On-line shopping was up 10 to 12 % according to IBM.  In an apparent demographic jump, 45% of Walmart’s customers now also shop at Amazon!

The inevitability of an aging U.S.  population, the fact that the Millennials are ‘different’ than previous generations and the advent of e commerce are combining with other social and technological factors that make all that retail space – well – excess!

Drastic downsizing is about to happen. John Kernan, Coven & Co believes that shoppers are likely to see an average decrease in overall retail square footage of between 1/3 and 1/2 within the next 10 years. Sears has already closed 300 stores since 2010. J.C. Penny and Macy’s have also announced multiple closings. Impact example? Perhaps no retail niche is more relevant to the dynamics of change than book retailing. Anybody seen a Border’s Bookstore lately?

There will always be stores – someplace. But they are not going to be the same anymore and there will undoubtedly be a lot less retail brick and mortar square footage. But what’s the right mix of physical retail outlets and e commerce sites? Is Omnichannel a ‘must have’ retail technology investment?

The customer is shifting from what they have predictably ‘always done’ to moving on. But moving on to where? Moving on to what? What are the strategies and tactics, the locations and services, the merchandise and prices, the technology, the media that will ensure that a retailer’s customers are served better than anyone else can serve them. Customer data – understanding the customer – chasing the ever changing customer is the requisite strategy for the future.

Advertisements
Comments
4 Responses to “Chasing the Customer … but to where?”
  1. Priscilla Berry says:

    This is good and on point. I think the model is Amazon and people will look for the “feel good stuff”, once felt say walking into a store like Publix or Niemen’s, someplace else. I think the model will also be away from big box stores like Walmart and Costco that are located off major highways and more to the boutique atmosphere and community like niche of say a Fresh Market. Life and also the retail experience has always been more about feelings than facts! The new so-called Siena Publix store located in Ponte Vedra in Sawgrass has more of the “feel” of what shopping will be like for what is left of brick and mortar.

    pb

    Like

Trackbacks
Check out what others are saying...
  1. […] Some of you might have read my earlier blog on LinkedIn hypothesizing that 30 to 50% of brick and mortar retail space might close in the next ten years or less.  https://rl098.wordpress.com/2014/01/24/chasing-the-customer-but-to-where/ […]

    Like

  2. […] For those of you who read my January 24th, 2014 blog on LinkedIn, hypothesizing that 30 to 50% of brick and mortar retail space might close in the next ten years or less:  https://rl098.wordpress.com/2014/01/24/chasing-the-customer-but-to-where/ […]

    Like



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: