Fewer people go to retail in malls anymore. A strategy of incrementalism has pushed the physical industry into a death spiral. Product relevance is terrible, especially when you compare to what online stores can show, sell, and have incredibly easy return policies. They have upended the economics of an industry, and the industry has struggled to respond. Some of the highlights of this interview cover the negative side of the accelerated decline in physical retail and a view of the possible re-vector that smart retailers should be taking.
Courtney Hawkins is a senior retail executive, a unicorn really, that has been responsible in her career for over 1.5b in P&L responsibilities, 250 stores, and 12k+ employees. Courtney started her retail career, working on the shop floor, then continued to progress over her 20 years in retail, having relocated all over the country- Las Vegas, NY, Seattle, Houston, Chicago, and now resides in Oakland, CA. A dedicated retailer with most of her experience at Gap Inc., and until May 2020 she was a Vice President at Old Navy. Courtney is also a thought leader in the industry with a knack for understanding what's to come for the future of retail and spends time mentoring women in business.
The bad:
- We could see 1,000 malls shrink to 600 malls by the end of 2020
- We are left with C and D malls, which are the least able to survive
- Corporations like Nordstrom are trying different things like: special online services, rack space, and pick up and return stores
- These struggling stores are dragging down mall owners, so there is a negative multiplier effect in play too
The possible – 8 ideas to change retail from the great adapters:
- Malls could be life experiences, such as removing the roof and letting in the weather conditions to freshen spaces.
- The future of big retail needs to be friction-free and focused 100% on the customers' experience. The choice is not the prime driver, but the best way to build equity is to make it so easy for the consumer the brand value, the historical significance of the brand stands -out and not the inherent hassles and perceived restrictions.
- Specialty retailers need to narrow choices to core offerings in order not to carry high inventory numbers. They need to have seamless online and offline experiences to squeeze everything they can from the moments they have with customers.
- Retailers like Walmart have looked at their space and turned areas into outdoor space. John Lewis, in the UK, has turned sites from retail to converted apartments.
- We could see micro fulfillment centers like mini Amazon warehouses.
- The mall could be seen more like a community experience (exercise, movies, food, medical, and education).
- Curated inventory and experiences will drive brand value, and that also is going to mean that ethics and inclusion, sourcing, and the environment become essential parts of the purchase decision.
- Retail workers cost $19B a year before Covid-19 to recruit and training at the associate level, and there was a 60% turn over at level in 2019.
If ideas like customer experiences, meet the customer where they are, and curating inventory are the future, we need better enabled and professional retail workers to handle this.
Think about how significant shifts in the holiday shopping season in 2020 are going to occur. Safety needs for those working in the store and maybe stores will have to offer booking times for visiting a store. Retailers are deciding to close for Thanksgiving. Will stores provide or need to provide bookings to tour a store?
