Going into President's Day weekend, many Americans were looking forward to an extra day off. However, last Friday was anything but joyful for the brand Payless ShoeSource, who confirmed they'd be closing all of their stores in the U.S. and Puerto Rico. Payless ShoeSource, or more commonly known as simply just ‘Payless', operates more than 2,100 stores of the same name that are going out of business in 2019.
This marks the largest store closure for brick and mortar stores in 2019, and it almost doubles what was projected for the entire year, according to a study by Coresight Research. Abandoned retail buildings have become the sad marker of a consumerist society that no longer finds the same amount of value in physical shopping. When so much can be purchased online, offering purchase privacy and convenience, it's no wonder that nostalgic giants from years of yore are closing at a faster pace than previously expected.
Obsolescence: A Brief Timeline
A UK study refers to locational obsolescence as an outcome that can be caused by a number of unique factors. Among these are:
- Loss in value due to physical factors outside of a property, itself
- Loss in value due to external influencing factors
- Loss in value due to activities in the environment or unique consumer ecosystem
- Loss in value due to a disintegration of the building itself, the utilities or other amenities that made the building an attractive retail option; and
- Loss in value due to other factors like changes in economic activities and implied value
These definitions can help guide the discussion on what's happening to retailers with physical locations in the United States. One key factor that surely has retail giants rethinking their business model when it comes to brick and mortar stores is the trend to buy online versus in person. Surely, this change in economic activities came into play when Payless made the decision to shutter the brand for good. To that end, since announcing their departure from the marketplace, they have stopped accepting orders online in order to send people to existing stores to buy products prior to liquidation.
Payless isn't the first brand to meet its end, and as the climate of consumerism continues to change they won't be the last. In fact, in 2017, more than 5,000 retail locations closed, with the most closures being attributed to big names like Sears, RadioShack, JCPenney, Macy's, Gymboree, Vitamin World, Teavana, and even Payless. In 2018, little relief was seen by retailers, who closed 3,800 stores under the banners Walgreens, Toys ‘R' Us, and Gap, to name a few of the bigger ones.
How to Avoid Obsolescence in Retail
If you're a retailer offering customers a brick and mortar shopping experience, these disruptive changes are likely alarming. You may be thinking, "If malls are struggling to stay open, and big names in shopping like Macy's, Lord & Taylor, and Sears are feeling the struggle, what chance do I have as an independent retailer?"
Don't close up shop just yet!
If you're a retailer looking to stay ahead of the competition, you need to consider making your own disruptive changes to your current business model to keep from hemorrhaging under the weight of rent and utilities. The financial experts at Credit Loan recommend following these three steps to stop the bleed and save your business:
Step 1: Become a One Stop Shop
The days of boutique shops selling niche goods to the public are likely over. Businesses must think bigger to survive. Whether that means partnering in a cooperative way with other business owners to share a space where more goods and services are sold, like a multi-unit bazaar versus a single storefront, or simply dipping your toe into the new waters of expanding your current business, change needs to come and it needs to come quickly.
Step 2: Invest in Local SEO and Mobile
You can't stop the momentum of online shopping. Data suggests nearly 90% of retail transactions occur online. However, 88% of consumers who search for a business using phrasing like "near me" call or visit the store within 24 hours. That means local SEO (Search Engine Optimization) is vitally important for businesses who want walk-in traffic and in store conversion.
Most shoppers these days access the web from their mobile devices. As such, ensuring you show up in the local search results of a potential shopper's smartphone or tablet, and that your website is mobile friendly should they click on it to get more information, will jumpstart this process.
Step 3: Engross Customers with Unforgettable Experiences
Brick and mortar retailers have one unique benefit compared to their online counterparts, they can create beautiful, tactile engagement and sensory experiences for their customers. Business owners should pay attention to lighting, sounds, smells, and the overall feel of the location, also keeping a close eye on some of the other factors at the top of this article that cause a retail location to become obsolete.
Things like maintaining the grounds and ensuring your business occupies the right location in a part of town that's bound to get you foot traffic are important in this step. Equally important is ensuring a wonderful customer experience, one where the customer's needs are met in the most appealing environment imaginable.
The Hard Truth for Retail Stores
More and more businesses are opening up stores that are online only, and why shouldn't they? These stores are much easier to set up and come at a much lower operational cost, but no one said being a retailer was supposed to be easy. So, if you're wondering what to do with your retail location, prepare to make big changes if you want to fight for the storefront you've created. Partner with other businesses to offer a unique and memorable experience for local shoppers, or throw in the towel and become a digital business enterprise. Either way, the era of online shopping is here, and it's time to make the best of it!