American retailers have announced more store closures in 2019 than ever before. Thanks to the ever-expanding retail apocalypse that’s been on the rise in recent years. Companies like Victoria’s Secret, Gymboree, Charlotte Russe, and Brookstone have announced that they’re either cutting back their number of brick and mortar shops or closing up altogether. In total, around 6,000 retailers have announced closures in 2019. With e-commerce ruling the way consumers shop, will retail ever have room for in-store experiences ever again?
Despite the apparent retail apocalypse, consumers tend to spend more money in-store compared to online. According to CNN, only 16% of sales come from online stores. Meanwhile 90% of a business’s income is generated from in-store shopping. Studies suggest that this is because consumers are more impulsive when in-store and tend to spend more than they would online. In-store shopping gives the business the ability to control the environment that the shopper is in, making them feel more comfortable with the purchase by curating an experience rather than selling a product.
Still, brick and mortar shops of the past seem to be struggling. As the millennial and gen z markets come of age, shopping habits and consumer trends are rapidly changing. Millennials have been named the hardest demographic to market to because they’re not listening to the radio or watching TV in the same ways their older counterparts are. However, they’re highly active on social media and around the internet. Content, for millennialls, is everything. Not just content, but good content. In 2019, if your retail company doesn’t have a highly curated, specified brand identity it simply won’t survive.
Take, for example, the clothing company Dolls Kill. The company was founded in 2011 by a former DJ that noticed a need for a boutique clothing retailer where rave kids could style the look of their dreams. In just a few short years the company went from a deeply niche online clothing boutique to copping a spot at #107 on the list of top online clothing retailers in the world. Yes, the whole damn internet. How did this extremely niche company designed to give ravers a place to look like Charli XCX become so successful? Branding.
This paint company is perhaps the amalgamation of that concept. Backdrop paint is a millennial-owned paint brand with advertising reminiscent of an American Apparel campaign. The company aims to make painting your home as easy as being presented with a list of trendy colors and having everything sent right to your door. If you think it would be easier to just pop over to your local hardware store and pick up supplies, maybe you’re not a millennial.
Online to Brick & Mortar
While dozens of companies have tried and failed to migrate from brick and mortar retail into the online sphere, the opposite has shown massive success for formerly online exclusive companies. Amazon, for example, has opened a handful of IRL stores around the United States. This is in addition to its acquisition of Whole Foods just a couple of years ago. Meanwhile, companies that have, in the past, relied heavily on social media marketing have grown from tiny boutiques into mall brands. Such is the case with this women’s clothing company that advertises primarily to young Mormon women.
As a generation of consumers raised on devices and the internet enter adulthood, older brands are going to have to find ways to make them feel heard. There may be a retail apocalypse happening for older brands, but companies that have implemented necessary changes in order survive have seen success. Walmart and Target, for example, have pivoted into the online sphere by investing in influencer marketing campaigns, curated home decor and clothing, and lifestyle content. So far, they’ve been fine.
How Will Brands Survive?
It takes more than simply making a brand to be able to survive, though. Nothing proves that more than brands that have embarrassed themselves on Twitter. It doesn’t take a University study to show that younger people are often not trusted by their older professional counterparts. However, companies are going to have to trust what younger professionals are suggesting if they want to survive. Notice how the retail apocalypse seems to only be plaguing brands that aren’t changing? That’s not a coincidence. Millennials are telling companies what they want. Now it’s up to those companies to decide if they want to listen.