1. “How will we cope with the reduction of floor productivity (sales per store floor area) due to sales shifting online?”
2. “How can we increase the profitability of our (loss making?) online channel this year?”
One or both of these questions have been and will remain at the top of the list of conundrums to solve ASAP for CEOs of multichannel retailers. The answer to both of these questions may well be this: Ally with the enemy!
Compared with the shopping experience of 10 years ago, the modern-day shopper may seem spoiled. Shoppers are treated to pop-up stores, shop-in-shops, flagship stores, concept stores, multipurpose stores, and experience centers, a far cry from the more transactional locations that were the stores of yesteryear. And in a continued hunt to remove the disadvantages of online shopping, pure-play online retailers are offering ever more immersive online experiences, personalized content spread over an array of social media channels, same-day delivery, free returns, and 100-day trial periods.
But the shoppers are not spoiled by nature — they are being raised this way by retailers. The intensifying competition driven by increasingly scalable international business models enabled by technology will only set the expectations of shoppers higher and higher.
If a retailer is going it alone and not part of one of the few international “super retailers” like Zara parent Inditex, chances are that the retailer will not be able to keep up with the expectations of shoppers and pleasantly surprise them.