Who will win? Who will survive?

"Competing" and "winning" in business and trade has been much in the news as the Trump administration begins.

Meanwhile, at the NRF's BIG Show 2017, where technology dominated (510 retail tech exhibitors!) it was reported that in 2016, "Amazon spent more than $15 billion on innovation, which is more than the top 20 retailers (excluding Walmart) combined." 

Yikes! How is an independent retailer to "compete" and "win" in that environment?

Well, consider this perspective: 

• A lion and a gazelle wake up on the Serengeti. The gazelle knows that to outrun the lion, it need not be the fastest gazelle. It only has to be the second slowest.

The good news for many retailers is that you don't need to outinvest or even beat Amazon. (Whew!) You just need to outperform your weakest competitor! 

• Amazon is unquestionably a relentless competitor and growth machine. So too was Wal-Mart. And before that, the "category killers" like Barnes & Noble, Office Depot and Toys 'R Us. And before that, regional malls. Department stores. And on and on.
• The Big Guys will come and go. There always will be another one emerging.

Through all that, independent retailers who stay focused on their own survival – keeping their own competitive edge, knowing their real competitors – those retailers have continued to have a place in the community. And that is truly a win!

Great opportunity for local retailers?

In mid-January, the Wall Street Journal reported that a real estate investment trust that runs class B and C malls across the country "is allocating a portion of space in its portfolio of about 70 million square feet to pop-up stores". These pop-up stores offer 60- to 90-day leases. The REIT is "targeting new merchants, including those that started their business online." 

• Crocker Galleria, in downtown San Francisco, has a 1,700 square foot Storenvy Popup that began in 2013 as a venue for new merchants. They cite one example of a women's clothing retailer that "started out in a 'fashion truck' in a parking lot, moved to the pop-up space, and now occupies a retail storefront in the three-story mall."

However, we see a great opportunity for an established retailer – like you, perhaps? The mall business is very tough right now, and few landlords are in a position of strength. That means that more of them are open to considering new ideas.

As an independent retailer, maybe you can be very nimble in setting up and operating a 90-day pop-up shop. 

Plus, as an established retailer, versus a new merchant, you could draw in foot traffic, coveted by mall landlords.

• Maybe you want to experiment with a new concept.
• Or, close out of a category of goods.
• Or, reach out to a new market segment.
• Or...?

Few landlords have retailers clamoring for long-term leases. For them, the opportunity to get some revenue – and its accompanying foot traffic to their property – could have a great deal of appeal. 

Even better, it's a fine way for you to be able to experiment, innovate, and maybe even re-energize your operation. 

Might a grim situation for some landlords be a golden opportunity for you? Something to consider.

What do customers really want? More control

We are living in unsettling times of rapid change and news cycle drama, now accentuated by a U.S. President-elect who values being “unpredictable.” 

Whether it’s the latest natural disasters, international conflicts, aging parents, unexpected expenses, or just trying to open a new bottle of aspirin, life can seem more out of control than normal. Especially during this upcoming holiday season.

This anxiety and frustration can be unsettling to many folks, some of whom undoubtedly are your customers. 

And frankly, as the frustrations grow of having less control, some people will seek more control wherever they can.

Where would that be? That’s right. Your stores. You and your staff must be ready.

“Give the customer what they want” has been a long-standing directive in retailing. Especially for today's customers, it's not about price or selection. What they want today is control. 

This holiday season, many consumers will turn with a vengeance to a new kind of “retail therapy”. Shopping is one place where they still are in charge! But it's not how much merchandise they acquire; it's how much control they can exercise.

How might you and your stores be better able to serve these seekers of "retail therapy" Among ideas for you and your staff to consider:

• Choose and use technology that gives your shoppers more control (versus just having the gee-whiz “latest technology”).
• Be more willing to explain “why?” There are reasons behind your careful editing of assortments (or what’s known today as “curating”). Explain how the merchandise in your stores meets your standards. (And why you don’t have everything that is available on the web.)
• Alas, some customers will abuse this power. They can be rude, or leave merchandise on the fitting room floor, or challenge return policies. It is important to avoid a tug-of-war with such customers. They want less confrontation!

Today's new "retail therapists" – that is, those retailers who understand and cater to customers who want more control –  will be better able to weather today’s tumultuous times. And to help their customers do so as well.

Millennials prefer L-A-T-T-E. Maybe you should too!

The Millennial generation - now ages 17 through 34 - represents nearly a quarter of the U.S. population, and a significant portion of annual consumer spending. 

We recently read of a study that has identified a set of attributes "that overwhelmingly resonate with this age bracket."  In fact, when making shopping decisions, Millennials are 20% more likely than other generations to consider these elements.

As these studies so often do, an acronym has been created to help us remember those attributes: L-A-T-T-E. 

• Local
• Authentic
• Transparent
• Traceable
• Ethical.

While each of these attributes provides the means to differentiate your stores, in our view, many independent retailers can leverage ALL of them!

Moreover, in our opinion, these L-A-T-T-E qualities not only resonate with Millennials, but with many others (your customers? your neighbors? You?) who share these same values. 

• It is not just demographics (quantitative data); it's also psychographics (qualitative data). And the L-A-T-T-E attributes certainly point to qualitative measures.

We think this offers two significant opportunities for independent and local retailers. 
With the L-A-T-T-E attributes, independents are uniquely positioned to take the lead, and make it known that Local - Authentic - Traceable - Transparent - Ethical have long been in your DNA. 

Especially in today's environment, winning the hearts and minds of shoppers is the challenge confronting all retailers. Sharing your love for L-A-T-T-E is an important step!

Your stores: places to BE? Or just places to buy things?

One of Retailing’s Hottest Trends: Selling Experiences

“After years of choosing the speed and wide selection offered by big-box retailers such as Home Depot or online merchants like Amazon.com, customers are demanding higher engagement if they’re going to buy something in a store,” reports Lindsey Rupp of BloombergBusinessweek.* Stores must be “exciting destinations rather than places to make a quick purchase.” 

Some brands or chains, Rupp reports, already are selling experiences along with their goods. Consider:

• Lululemon Athletica offers yoga classes in its stores
• Apple holds in-store digital art and video workshops
• Some Cabela’s (outdoor outfitters) stores have indoor archery ranges
• PetSmart opened its first Pet Spa store, focused on the “pet lifestyle experience” for pets and their pet owners
• Teen retailer Urban Outfitters last year bought a pizza chain

Beyond "Product Demos"

In our view, each of these examples goes well beyond the merchandise, and focuses on actively engaging the customer.

• These experiences are not “product demos”. Instead, they showcase and celebrate using and enjoying the merchandise.
• Plus, customers engage not only with “experts” who use the products (those leading the sessions), they engage with other customers (people like themselves?) who also use the products.

In other words, compelling reasons to come to your store! Hands-on participation and involvement are essential for today's customers. So, what are you waiting for?

• Specialty retailers are well-positioned to deliver these in-store experiences. You have the product knowledge, the love of the merchandise, the respect for your customers. 
• And what a great way to energize your staff! Ask for their ideas, and try them all! Test different times of the week: What appeals during a weekday? How about weekends? Or evenings?

For retailers, synergism and involvement is the new competitive edge.

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* Pizza, Parks, and Pet Spas: Shoppers Will Pay More for Retail Experiences. Lindsey Rupp, BloombergBusinessweek, October 19, 2016.