The Victoria's Secret models in front of the Victoria's Secret store in London

The Victoria's Secret models in front of the Victoria's Secret store in London

Tim Jenkins

Despite reports to the contrary, stores are not dying. And the most successful are “experiential,” earn high engagement scores and evolve into brands where brick-and-mortar and online operations symbiotically support each other.

That assessment came from two executives on different sides of the retail business: Les Berglass, chairman and chief executive officer of Berglass + Associates executive search, and David Munczinski, founder and ceo of Brickwork, software technology that helps retailers steer online traffic to store visits. They discussed “2016: the return of the store” in a meeting Thursday with members of the media.

“A store makes your brand come alive three-dimensionally,” said Berglass. “When it’s done right, it leads to growth and greater profitability. Victoria’s Secret and Apple Retail are the best examples.”

“Retailers really need to focus on engagement scores, how many people hit the dressing rooms, for every 100 people who visit a retail Web site, three end up checking out something,” Munczinski said. “A” malls are doing really well, while those in the “B” and “C” tiers are losing traffic, he said.

“The store isn’t going away but the definition of what is a store is changing,” Munczinski said. Don’t look at stores as simply pieces of real estate but as assets that have value well beyond just the physical property, Munczinski added.

Among the reasons they cited for brick-and-mortar enduring — they’re more profitable, more fun and they do a better job projecting a brand image than pure plays.

Given the retail industry’s challenge to be “experiential,” WWD asked the executives to list retailers that are successful because they provide innovative and distinct shopping experiences. The common thread, according to Berglass, “They own the category.”

Here’s who they came up with and why.

  • Apple: It’s fun to be in the store; 95 percent of Apple’s business is done in the stores with fewer than 10 stockkeeping units generating 90 percent of the business, and the frontline workforce is empowered and focused on engagement.
  • Victoria’s Secret: The brand is about three decades old but stays “forever young.” Its Pink subbrand speaks to the daughters of original VS shoppers.
  • Restoration Hardware: Has strong leadership and does a good job marrying its direct business with the stores. The ceo Gary Friedman adheres to the philosophy, “fix it if it ain’t broken” and is able to extend the brand beyond historic product categories, like sleepwear. However, the stock tumbled Thursday after the company missed earnings projections.
  • Nike: The company is reconceiving its approach to retail; customers are viewed as members, and the brand delivers a shopping experience that is fun.
  • Warby Parker: The business generates very high sales per square foot and makes the product accessible by featuring glass-less counters so customers can readily reach for models to try on. In locations where stores open, there’s a spike in online sales.
  • Casper: The direct-to-consumer mattress start-up sells its own branded mattresses and pillows at affordable prices and has quickly earned a reputation for product innovation and speedy deliveries.
  • Trader Joe’s: The grocery store offers low prices, attracts overeducated customers who don’t earn as much as they could and presents strong competition to Whole Foods.
  • Costco: The business offers items at bulk at low prices and makes much of its money off memberships. The assortment is eclectic and compelling and keeps customers engaged, but its challenge is to attract more Millennials who increasingly are moving downtown and choosing not to live in the suburbs where Costco is concentrated.
  • Starbucks: A consistent winner that created a brand resonating for years and years, strong brand image, constant product updating — one of the few cases where bringing back the ceo (Howard Schultz) for a second tour of duty helped revive the business. The shop always gets crowded and it’s not just about coffee. It’s also a social setting.
  • Urban Outfitters: The retailer has a range of brands with distinct niches, presents an eclectic assortment cross-merchandising hard and soft goods and found goods with innovative vignettes, and knows that food is of growing importance to retailers. Last year, UO entered the pizza business by acquiring The Vetri Family group of restaurants including Pizzeria Vetri.
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