Monthly Archives: Mar 2016

It’s Back to the Future: The 21st Century Evolution of Retailing

Screen Shot 2016-03-09 at 3.51.16 PMIn early January, Macy’s announced that it plans to close 36 under-performing brick-and-mortar stores this year, laying off 4,500 people in the process. In doing so, Macy’s has joined a long list of other retail chains closing their stores – including Office Depot, Walgreens, Aeropostale, American Eagle Outfitters and The Gap.

Despite this trend, not all is doom-and-gloom in retail circles, as some on-line retailers are moving quickly into brick-and-mortar stores. Forbes reported that eCommerce retailers like Fabletics (athletic brand) and Birchbox (subscription-based beauty shop) are opening traditional retail outlets.

Forbes noted: “Moving from an online platform to bricks and mortar is a growing trend with younger online brands, and one that could reshape the future shopping center / mall dynamic.”

Online retailers are confident in making such a disruptive move because they have built an established customer base online, have data on those customers that can inform what to offer them and when. A physical store presence can also offer unique customer experiences, otherwise unavailable on-line.

Screen Shot 2016-03-09 at 3.52.58 PMThis trend reflects a growing “omni-channel” approach to retailing. It’s a business model that deploys a variety of distribution channels to deliver a seamless customer shopping experience. This approach can go beyond an eCommerce website and a physical store to include “buy buttons” on social media outlets such as Pinterest.

For example, a customer can discover a product via social media, go to check it out at a retail store, and then order it online. Or some retailers offer a hybrid shopping experience, such as Best Buy and Staples, that allows customers to shop online then pick up the merchandise at a near-by retail store, without having to pay shipping charges.

This reverse online to in-person retail strategy is helping drive growth for “challenger brands” such as Adore Me Lingerie, a $43 million a year eCommerce business. Founded in 2010 by Morgan Herman-Waiche, Adore Me appeals to young women by offering low prices, and a fast-fashion sensibility to selling lingerie.

Screen Shot 2016-03-09 at 3.58.58 PMThe NYC based company is the intimates answer to fast fashion giants like Zara, H&M and Forever 21. Adore me is also giving lingerie category leader Victoria’s Secret, with $12.5 billion in annual sales, a real run for its money.

Adore Me operates on a fast-fashion / rapid manufacture-to-retail cycle in which the brand introduces a new 30-40 piece collection every month. Their price point is about $39.95 for a matching bra and panties set. New members can buy their first set for $24.95 plus free shipping. Adore Me also offer swimwear, sleepwear, lingerie and accessories.

Recently Adore Me joined the growing ranks of eCommerce merchants opening a physical store by announcing the opening a by-appointment only location inside its West 39th Street headquarters in NYC.

Morgan Hermand-Waiche

Morgan Herman-Waiche

This savvy move was prompted by the success of a three-day Valentine’s Day pop-up shop which Adore Me had created in New York City’s Hudson Hotel earlier this year. Adore Me plans to enhance the customer experience even further by providing 45-minute one-on-one sessions with a personal shopping stylist. Interested shoppers can sign up online for appointments.

“I literally came to the U.S. with my luggage and ambition,” said Herman-Waiche   a French native and Harvard Business School alumnus. “Now I’m disrupting a whole industry.”

As another Frenchman, Marcel Proust, once noted: “Most things are not what they appear to be.” Online shoppers need to be mindful of price savings offers and comparisons that could make them feel like they are getting a great deal, when in fact, they are not.

As the NY Times recently reported, many online retailers use “list price” as a comparative benchmark to demonstrate online savings. However, this sales tactic, which usually involves a much higher amount, is now drawing legal scrutiny and may raise integrity questions for eCommerce merchants.Everything is on Sale

It’s clear that the retail marketplace is changing fast, driven by disruptive technologies (smart phones), risk-taking start-ups, and shoppers who continually seek better deals and broader selections of merchandise.

But the future of retailing may lie in the lessons of the past, as exemplified by Chicago retail pioneer Marshall Field. He was renowned for his ability to provide an exceptional level of quality, selection and customer service. Field’s motto for success was “Give the lady what she wants.”

Marsahll Field

Marshall Field

Retailers like Adore Me are doing just that (in 21st Century terms) in terms of giving customers what they want: great merchandise selection, attractive value, convenient eCommerce delivery via smart phones and tablets. As for those who want to physically see then handle the merchandise, a personal shopper to enrich the transaction.

 

 

Read More