retail news in context, analysis with attitude

The National Retail Federation (NRF) and Forrester are out with a new “State of Retail Online” study suggesting that “traditional and online retailing are increasingly intertwined as customers seamlessly shop across touchpoints and the industry uses both platforms to better serve them.

The study goes on:

“Of the companies surveyed this year, 32 percent were ‘pureplay’ online retailers while 57 percent were multichannel retailers, including traditional bricks-and-mortar retailers that also sell online.

“This year’s data reveals that 43 percent of store-based retailers surveyed expect a net increase in the number of bricks-and-mortar stores they operate by the end of 2018 compared with 2017, and only 16 percent expect a net reduction. Additionally, retailers are proactively working on their real estate assets, whether testing new store formats such as opening some type of pop-up store (24 percent), and opening new warehouses or distribution centers (12 percent).

“New physical locations are important because 42 percent of retailers surveyed say that faster delivery of online orders is their top customer-facing priority, and many plan to use stores to achieve that goal. Omnichannel services such as buy online, pick up in-store are an in-store priority for 21 percent, along with 15 percent that cite ship-from-store as a fulfillment priority.”

And:

“Digital continues to contribute significantly to retail overall, both directly and as it influences sales in stores. Seventy percent of retailers surveyed noted that online conversion rates – the number of people browsing an item online who actually follow through and make a purchase online – increased in the past year. Further good news: 62 percent said repeat customers were up and 57 percent said average order values had increased.”
KC's View:
The basic message it seems to me, is that for the customer, retail is retail, with channel distinctions becoming less and less important. Retailers have to keep up with these shifting expectations, understanding that borders and boundaries and lanes that used to be important to how they did business may have to vanish completely if they are to be successful, along with traditional expectations and benchmarks.

I’m not really surprised that retail square footage is expected to grow, as long as these retailers are building stores that are prepared for the new consumer attitudes that the next generation of shoppers will bring with them. Those stores have to be relevant, compelling, and differentiated. Otherwise, they’re just going to be taking up space.