As consumers continue to spend more time shopping online — and posting reviews of stores and brands — traditional retailers struggle with ways to have meaningful engagement with customers that results in consistent conversions.
Here, Dan Brickner, principal and executive vice president of brokerage services at Metro Commercial, shares his insights into what’s working at retail right now, and how “Internet-resistant” brands are connecting well with consumers.
WWD: What are some of the challenges facing traditional retailers today? Which segments are most vulnerable and at risk?
Dan Brickner: Failing to resonate with consumers is the biggest challenge facing retailers today. Those that do will survive, those that become irrelevant will shut down. In addition, any retailer whose goods can be purchased online but has failed to connect with their customer through a streamlined omnichannel delivery model are most at risk.
This includes delivery of a seamless service from start to sale and thereafter. Customer reviews and ratings are a huge part of the overall retail experience. They influence buying decisions as customers seek reassurance for their purchases. Brick-and-mortar retailers are watching how digitally native brands are merchandising their physical stores and the use of technology embedded in the overall experience.
WWD: And which segments or retailers are finding success as the industry goes through this transformation?
D.B.: Any use or retail segment that requires the customer to be present is finding success. This includes uses such as restaurants, bars, entertainment venues, hair salons, spas, boutique fitness and personal grooming. Grocery stores are somewhat insulated; however, more and more customers are getting comfortable with grocery delivery through online channels.
Another segment is the “treasure-hunt” set of retailers. These include tenants such as Marshall’s, Home Goods, T.J. Maxx and other tenants that provide goods that have limited availability due to the nature of their business model. Some shopping centers and vacant retail spaces are now occupied by medical uses or related services — again, a use you must be present for to receive service. In general, Internet resistant retailers are preferred tenants. They offer a landlord stability in assessing long-term retailer success.
WWD: TJX Cos., in particular, seems to have found the secret sauce that resonates with shoppers. What’s driving their business? Offering a sense of discovery and bargain hunting?
D.B.: As previously mentioned, the stable of TJX Cos. is known for their “treasure-hunting” approach to shopping. Their customers are well trained, and they are very cognizant of the fact that stock is limited so they must buy on the spot before they lose the bargain. The TJX Cos. shopper recognizes value and is prepared to buy in the moment.
WWD: What’s your sense of where retail is heading over the next five years? What role will physical stores play?
D.B.: In the next five years, we expect to see even more retailers operating brick-and-mortar stores in conjunction with a strong omnichannel platform. While physical stores will not become obsolete, we will see technology play a bigger role in the overall shopping experience.
This will include sales automation, bespoke digital marketing and service, smart tools that imprint customer profiles and preferences, display and delivery methods and management of the supply chain. Technology will continue to evolve retail so long as the customer evolves with it.