new York In the USA, the longing for the old shopping experience is growing again: For the first time since 2017, more stores will be opened than closed in the USA this year. This is the result of a study by the IHL Group, which analyzed 900 US chains. This means that 4,361 stores will have been added net in 2021. And that despite the Covid pandemic, which is still causing many people to avoid the shopping malls.
For years, local shops were considered to be expensive ballast that didn’t stand a chance against the rapidly growing e-commerce. But recently they are experiencing a comeback: This is due, among other things, to the lower and more flexible rents. Dealers today can not only rent more cheaply, they also don’t have to commit themselves for ten years as in the past. For many online retailers, however, the local shops also serve as logistics hubs where customers can return or pick up their goods.
Many brands have ambitious plans for their stores for the future as well: The jeans brand Levi’s plans to open 100 new stores in the next three to five years. US fashion icon Ralph Lauren is planning 90 new stores.
Every day new retailers announce that they are expanding their branch network: The rapidly growing online eyewear retailer Warby Parker plans to open another 35 stores in addition to the 154 they already have. The sports equipment supplier Dick’s Sporting Goods is also expanding. And the low-cost chains Dollar General, Dollar Tree and TJ Maxx also want to continue growing. Dollar General plans to open more than 1,100 new stores in 2022 alone.
Top jobs of the day
Find the best jobs now and
be notified by email.
“The corona crisis has fundamentally accelerated the hybridization of retail. The stores play a key role in this, ”says Steve Dennis, president and founder of Sageberry Consulting, with conviction. Therefore, most retailers should fundamentally reconsider their strategy, performance criteria and investments.
Target delivers to customers from stores, saving 40 percent
Online and offline business no longer take place separately from one another. People examine goods in the store and then buy online, or they shop online and pick up the purchases on site.
Traditional chains such as Walmart and Target have successfully connected their large supermarkets beyond the city centers with online business and supply their customers from the branches. Target, for example, estimates that it costs an average of 40 percent less to ship products from its stores than from the most distant warehouses.
But the shops you can touch also function as advertising for online shopping later: “The more conventional stores we open, the more digital business we do in these regions,” said Macy’s CEO Jeff Gennette recently to analysts.
The football player Adrian Amos takes part in a shopping event.
(Photo: AP)
Sometimes it also works the other way round, and the stores follow their customers because, thanks to the digital data, they know where the demand is particularly high. “The brands come to us today and ask: What are the regions that we have to win over? Let’s go there, ”says Justin Abrams, founder and CEO of FlagshipRTL, a data analytics platform for luxury brands.
That’s why brands like Moncler, Gucci and Dolce & Gabbana have opened pop-up shops in the upscale ski resort of Vail in Colorado, in East Hampton and in Greenwich in Connecticut – all popular retreats for wealthy New Yorkers in the pandemic. “Business today is media – it is billboard,” writes Agrams. He expects that in 2022 a larger proportion of the advertising budget will flow into creative experiments with branch offices.
Climbing wall and tailoring for the brand experience
Creativity is also the keyword that is the focus of many planned expansions. Levi’s, for example, is not planning traditional stores for the 100 new openings it has announced, but rather so-called “next generation stores”. They should be a little smaller, but offer additional services such as their own sewing shop, in which customers can have their T-shirts and jeans personalized with patches, rivets or special seams.
Levi’s also wants to offer mobile check-out and use artificial intelligence to have the right products in stock for local tastes. The sports equipment supplier “Dick’s Sporting Goods”, on the other hand, wants to entertain its customers with a baseball cage, a climbing wall and a golf course.
“In the stores of the future, it will be more about conveying a meaningful and personal brand experience,” says Abrams. “Smart brands will experiment with new formats and locations,” he predicts.
A change is also taking place in the search for the right location: While many brands in the past liked to attach themselves to a large department store such as Macy’s or Nordstrom, today they are looking more closely to grocery stores. This is the result of a study by the real estate agent JLL.
Because while the large department stores already had difficulties before the pandemic, the supermarkets are still well attended and are therefore also a customer magnet for the neighboring shops.
“Many of the one-size-fits-all formats continue to lose market share,” observes Dennis. He advises retailers to offer a hybrid portfolio of concepts to cater to the diverse, rapidly changing preferences of customers. In the past few years, many traders had run large shops that offered too little of everything. “For many, ‘smaller and more focused’ could be the right antidote,” says the consultant.
More: Black Friday disappointment – Cyberweek sales down