“With the growth of online shopping, how can digital signage evolve in customer- facing environments and impact the shopping experience?”
Online shopping is drastically impacting brick and mortar stores. Retail is evolving more quickly than some companies are able (or willing) to adapt, and in the race to a finish line that keeps edging out of sight, many big brands are stumbling off course. However, both Toys “R” Us and Sears have more than just online retailers to blame for their demise.
Hundreds of retailers have filed for bankruptcy this year in the U.S. and Canada, including Toys “R” Us with more than $5 billion USD in debt, making it the third largest retail bankruptcy in history. Some forecast that “Retail is Dead,” and with the collapse of companies like Sears, it’s not hard to chime in. But is it true? Walk into an Apple store, the local Starbucks or IKEA, and the answer is clearly NO. But it’s more complicated than that.
Toys “R” Us may have been doomed since 2005 when private equity firms loaded the company with debt to take it private, making it financially difficult to invest in innovation. They were slow to embrace e-commerce, essentially allowing the competition to beat them online. The rise of mobile devices as entertainment for children, discount retailers, online shopping and indie retailers like Mastermind Toys stealing market-share have all added up to disaster for Toys “R” Us. Efforts to revitalize the brand were half-hearted even though it was clear the company was in trouble. Debt prevented Toys “R” Us from making the substantial, transformative changes that were really needed.
Sears had additional challenges. Customers are shopping at large discount stores like Walmart for day-to-day needs, buying more from online retailers like Amazon and indulging in brand-name luxury items at Nordstrom’s, leaving a gap for department stores. 18 months ago, Sears decided to right-size and refocus their offering around fashion and home décor, but this effort (which included a new logo and store design) meant competing in a fierce marketplace. Fashion was not Sears’ strength, and even H&M now offers home décor. Sears would have been better off focusing on appliances and housewares, where they have strong brand association and trust, rather than try to compete in an extremely over-saturated market where they were not really contenders.
Retailers cannot afford to wait and see or make choices that are not strategically vetted. An immersive experience is the new retail presence, and the best retailers are killing it. Nordstrom allows you to instantly buy items you like on Instagram. Bonobos has “guide-shops” where merchandise can be viewed, touched and tried on, but not taken home, to introduce their online brand to brick-and-mortar retailing. And Apple has changed retail stores from a place that sells products to an experience where the brand is so crisply defined at every touch point, it couldn’t be anything else but Apple.
Retail is not dead, but it has transformed and is still evolving. Many retail trends are helping in this evolution: Omni-channel, big data, digital marketing, mobile commerce, interactive engagement, AR/VR. They are all shaping how we define retail today. These opportunities have one goal in common — creating immersive experiences, which redefine how customers interact with brands. There is a pivotal moment when trends stop being referred to as “game changers” and become common practice, moving from the most talked about, landscape-shaping factors to becoming the everyday fabric of the industry.
There is one “trend,” if it can still be called this, that stands out above the rest, which has the capacity to shape the future of how we shop, buy and interact with the built retail environment. This “trend” is best described as “immersion” — a retail state where the barriers between the physical and virtual worlds disappear and become one. And the new technology and channel proliferation offers retailers the opportunity to move beyond brand engagement toward full immersion in a brand story. Retailers that embrace immersion most effectively and creatively will be the big winners, while once-iconic giants like Toys “R” Us and Sears fade into distant memories.