From the Editor: Retail, Reimagined
Brick-and-mortar retail isn’t dying – it’s evolving.
A recent conversation with friends turned to the decline of brick-and-mortar retail – a game in which they know I have more than a little skin. (In addition to Screen Printing, I also work on other ST Media Group brands, including VMSD, the leading magazine covering retail store design.) I asked the group to guess what percentage of retail is now done online; the consensus was “more than half, easily.”
No one believed me when I told them the actual number: Nine percent. According to the US Department of Commerce, there were about $5 trillion of retail sales in 2017, $453 billion of which involved orders that were placed or negotiated using mobile or other online devices.
I know why my friends doubt the data. News about brick-and-mortar retail has been unremittingly grim, including a record number of store closures last year: 6700, according to Fung Global Retail & Technology, a figure that could swell to 8600 stores in 2018 based on estimates from Credit Suisse. Malls are dying; iconic brands like Sears and J.C. Penney top analysts’ death-watch lists; the retail sector lost more than 67,000 jobs last year, according to UBS, even though sales were up substantially. The numbers are brutal.
But they’re also misleading. Lost in the gloomy narrative is the fact that stores are opening as well – about 2200 from major brands alone based on a recent Business Insider report. And just as it’s becoming conventional wisdom that e-commerce will inevitably displace the conventional store, many of the most successful online merchants are migrating the opposite direction, with brands like Warby Parker and Bonobos aggressively opening new locations and apparel merchant Everlane opening its first store in New York after years of swearing it would never get into physical retail.
Last month, VMSD’s editorial advisory board, featuring many of the key decision makers in the development of retail spaces, met at Globalshop 2018 in Chicago to discuss this phenomenon and the store transformation it’s causing. Realizing that their connection with consumers is incomplete without a physical presence, merchants are upending the traditional role of the store to deliver unique consumer experiences that cannot be approximated online.
Two excellent examples from our industry were featured at SGIA’s outstanding ThreadX conference in February. Closing keynoter Johnny “Cupcakes” Earle built a successful brand around limited-edition novelty shirts, beginning with online distribution and then unusual pop-ups before opening his first permanent location in Boston in 2012. Building on the unlikely merger of baking and magic that defines the brand, he designed the store to look and smell like a vintage bakery, packaging his shirts in pie boxes and using creative incentives to draw fans into the location. Tim Williams of London-based YR Store explained how his company developed an on-site apparel customization platform, initially to sell their own shirts before realizing that their value proposition was creating in-store experiences for brands that license their technology – as dozens now do.
As one of the VMSD board members put it at our meeting, “Retail is no longer a place to go; it’s a state of being.” Count on places being a part of that state for a long time to come.