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Brick and Mortar Retailing Basing Comeback on Generational Marketing

November 2019 Marketing, Selling

Rumors of the demise of retailing are highly exaggerated.

In the article “Brick-and-Mortar Stores Are Making a Comeback,” author Jon McFarland Flint interviews two Harvard Business School faculty: Antonio Moreno, associate professor, and Jill J. Avery, senior lecturer. In this Q&A, they discuss the problems retail stores have encountered in recent years and provide some thoughts as to how retailers can turn things around. The lead-in to the article reads: “Left for dead alongside the retail highway, physical stores are suddenly finding new ways to compete.”

Brick-and-mortar retail stores are finding new ways to compete

Avery contends that “a store has to create a branded experience that goes beyond the purely transactional — one that aims to build a relationship with the customer and communicate the brand and experiential way.”  Moreno says that “malls are going to increasingly transform into places for experiences, not just for taking inventory home. What probably will not survive are retailers that are more like a warehouse or just physical repositories of goods. Real estate is too expensive for that purpose.”

Avery adds “each retailer needs to know what they are, what value they want to provide, and then understand the customer’s purchase journey for obtaining that value.” She goes on to say that legacy brick-and-mortar retailers have “amazing assets, but they need to think about what’s unique about having a physical space to convene with consumers and how that can be leveraged to do something that can happen in the digital world.”

Among the retailers Avery singled out is Glossier, a digitally native, direct-to-consumer cosmetics company. With a permanent showroom in New York, Glossier is creating a different kind of retail experience by focusing not so much on selling products but rather on introducing customers to the brand in a way that can be shared with others through social media. Avery observes that there are special areas in the store that are set up for selfies at which you can take a picture of yourself in Glossier pink clothes or accessories that can be immediately posted on social media. Their expectation is that you will move your shopping experience from the physical to the digital. It’s not meant as a channel for distribution so much as “an acquisition engine and a way to make a brand splash in a particular market.”

In a May 18, 2018 FORBES article entitled “How brick-and-mortar stores are making a comeback with millennial’s and Gen Xers,” author Sean Mao, president of Perfect365, a digital platform with users worldwide, sees retail’s comeback as one linked to focusing on two generations: Millennials and Gen Z.

Millennials (also known as Gen Y, Gen Me, Gen We and Echo Boomers) number 95 million. The shaping events for this generation were the Great Recession, the Internet explosion, social media and 9-11. Gen Zers are the current generation and include approximately 25 percent of the total population. Their shaping event has been Internet access at a young age.

Mao’s article reports on a survey conducted by Poshly in collaboration with the (San Francisco) Bay Area Beauty Association. Data showed that 94% of millennials purchase makeup and 65% make purchases from their smartphones. “However,” writes Mao, “a staggering 72% would still prefer to make their purchases in a store. These women prefer trying out products before committing to buying them and that is why makeup subscription boxes have become such a big hit.”

Mao sees similar patterns with Gen Z. “Gen Z is the younger and more diverse age group of the two. In the U.S. alone there are 69 million people in Gen Z, meaning this population will soon outnumber millennials. They are worth $44 billion, and this figure continues to grow.”

She adds, “Despite being perpetually on their smart phones, Gen Z shoppers are more likely to ask for help in the store.”

She sees applications for retail beyond cosmetics. “Even companies outside of the beauty industry can use augmented reality to enable virtual try-on jewelry as well as clothing items. Digital engagement involves a commitment, not only at the store level but also at a corporate level.”

Mao sees two major store brands that appear to be strengthening their brick-and-mortar presence: Starbucks and Nordstrom. Starbucks have closed their online stores and instead have focused on re-directing customers to their nearest store. Nordstrom has started opening stores called Nordstrom Local that don’t have any merchandise. Instead, these a manicure bars where you grab a coffee or other kind of drink or sit down with a stylist. After that, you can have items delivered to the store based on what you like or choose.

It is interesting to note that JCPenney, a retailer flirting with extinction, saw its stock recently increase 25% despite reporting dismal earnings. The reason for the increase is the comeback strategy tested at a 208,000 square-foot store. The experimental store included a fitness studio, selfie studio, a video game lounge and a barbershop. These are hardly the services associated with Penney’s cluttered and drab look of the past.

According to Avery, “there is still a purpose for physical shopping in today’s environment; it just has to feel different from what we’ve grown used to as consumers.”



About the author

James T. Berger, Senior Marketing Writer of The Wiglaf Journal, through his Northbrook-based firm, James T. Berger/Market Strategies, offers a broad range of marketing communications, research and strategic planning consulting services. In addition, he provides expert services to intellectual property attorneys in the area of trademark infringement litigation. An adjunct professor of marketing at Roosevelt University, he previously has taught at Northwestern University, DePaul University, University of Illinois at Chicago and The Lake Forest Graduate School of Management. He holds degrees from the University of Michigan (BA), Northwestern University (MS) and the University of Chicago (MBA). Berger is an often-published free lance business writer who has developed more than 100 published articles in the last eight years. For more information, visit www.jamesberger.net or telephone him at (847) 328-9633.

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