Should showrooms replace closed stores?
Through a special arrangement, what follows is a summary of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.
Traditionally, when retailers closed stores, efforts at retention in those neighborhoods — even for customer relationships sometimes spanning generations — were rare.
But the costs of store closings now directly impact online sales. Each store is more than a place of commerce. It acts the same way a billboard does, reminding people of a brand, nudging a consumer who needs a new suit or a pair of socks. And just as new stores have been shown to increase traffic to a retailer’s website, closings have the reverse effect. Handled wisely, it’s possible to capture some (though not all) of a store’s value, effectively transitioning it to the online world.
For instance, what if instead of outright closing Macy’s store in Columbus, OH in spring 2015, a smaller, 5,000-square-foot space had opened in the immediate market area, or even a BOPIS (buy online, pickup in-store) depot?
With a customer base unwilling to make the miles-plus drive to the next closest Macy’s, this depot might have provided the standard basics purchased for years right in the neighborhood. Or if a loyal customer saw an item available online at the next nearest Macy’s department store, the item could have been delivered to this BOPIS outlet within 24 hours.
Dating back to 1970, the former Lazarus location might have successfully converted its thousands-strong shopper base to a new consumption model.
What we internally describe as a “Showroom Store In-Fill Strategy” could make use of effective retention tactics to help brands transition stores sales to online sales before shuttering a store. For example, retailers could offer customers a stack of free shipping coupons for same-day delivery to the BOPIS depot, or survey customers about what key, staple items they would likely purchase at a smaller outlet in the neighborhood.
With this smaller, yet valuable product assortment, a brand can maintain a toehold in a market area and better transition a customer base to online sales.The value of an in-fill strategy, whether showroom or BOPIS outlet, isn’t proven for every retail category and brand. But it is undoubtedly a far better option than utter abandonment.
DISCUSSION QUESTIONS: How would you rate the idea of opening a showroom or BOPIS outlet instead of closing a store in a community? What are the pros and cons of such an approach? Are there other ways to retain the loyal customers as online shoppers who have been left behind by store closings?