Expert: 5 Reasons Why Retail Armageddon is Not Happening!

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By Dan Jablons

The Owner of Retail Smart GuysDan Jablons has worked in retail while attending the Ohio State University, where he graduated with a Bachelor of Science in Marketing and Production. He has worked with retailers such as Walmart, Target, JC Penney, American Apparel, Betsey Johnson, Donna Karan, Jimmy Choo, Charles David, Diesel, Oakley, Tumi, Hollywood Bowl, and many others.  In addition to his vast retail background, Dan also has a background in improvisational theater and performed with comedy troupes all across the USA, and recently appeared on Curb Your Enthusiasm.  Dan combines his extensive knowledge of retail with his comedy skills to become one of the industry’s most popular speakers.  As part of our Experts column, Jablons discusses why the Retail Armageddon is overblown. 

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Lately, the media has reported with great enthusiasm, the demise of retail.  You can see it everywhere.  They have all kinds of horrible names for it: “Retail Armageddon,” “Retail Melt Down,” “Retail Havoc,” and probably a dozen more apocalyptic ways of describing the end of the retail world.  These articles describe a world where we never go out in public, we just stare into the glow of terminals, tablets and phones, tapping the things we want, and then barely opening our front doors and dragging in our bounty, after the drones fly away.

Before you cry out “OMG” or LOL, I thought I’d give you the truth.  What’s really happening out there?  Is it really the end of shopping as we know it?  Well, maybe in some sectors, but most of independent retail is doing quite well, thank you.  Just as a brief example, last month our international customer base of independent retailers posted an over 10% increase over last year’s sales, and the holiday season looks like it’s going to continue on that trend.

Some of you could be thinking, “Oh, he’s just a die-hard optimist. The retail world is ending, I’m sure of it!”  In the spirit of providing real, useful information, here are my FIVE REASONS WHY RETAIL ARMAGEDDON IS NOT HAPPENING!

REASON #1: LOOK WHO IS CLOSING

When you read these articles about the death of retail, notice who they are talking about.  Take a look at the chains that are closing stores, and look at how those stores are operating.  Most of the department stores that are closing have not changed anything about the way they do business since the Carter Administration.  They have the same fixtures, many of the same brands, the same merchandising methodologies, and probably most important, they have absolutely no one on the floor that can help you.  Smarter minds than mine have often said that business changes, that the best business professionals don’t manage business, they manage change.  When you hear about the stores that are closing, take a look at how much they’ve changed with the times.  You’ll see why they haven’t, and that’s why they’re closing.

REASON #2: LOOK WHO IS GROWING

As the department stores and chains close, notice who starts to grow.  You’ll see that store that do innovative things to bring shoppers in are the ones that take over.  Of course, online shopping is growing, as is Amazon.  I’m not denying that.  What I am saying, is that those online businesses grow but only in certain segments.  They are very good at growing the “need based” products, such as paper towels and dog food, but not so good at the “want based” products, such as fashion.  Why?  Because most people need help picking out the right things, and they need the store associates who are well trained in fashion to point them in the right direction.  Customers want to touch and feel that merchandise, want to try it on, want to see how they look.  And yes, they could do it in their homes and return the goods that don’t work, but that is still a hassle, and not nearly rewarding as finding that magical dress, that perfect jacket, or those super cute shoes, and bringing them home.  You just don’t experience that kind of fun online, ever.

REASON #3: WHO BENEFITS FROM REPORTING RETAIL ARMAGEDDON?

When you read that kind of media, ask yourself if the motivation of the author is really to inform you, or is there something else at play?  I met with a person who works in this kind of media, and he told me that a false yet controversial story is pure gold to him.  He can promote out some “semi-truthful” story, get millions of clicks, and produce tons of revenue in advertising dollars.  To him, it just doesn’t matter how true it is.  So authors and the press are often encouraged to write the most “exciting” stories they can muster.  Truth has taken a back seat there, for certain.

REASON #4: WHAT REALLY IS THE AMAZON THREAT?

Amazon does continue to grow, and people do enjoy buying merchandise from that site.  That said, the merchandise they buy is not fashion, as I wrote above.  It’s things that the need, things that they already know the exact UPC code of.  It’s household staples that they need to replace.  It could be certain types of footwear, if they know the exact brand, style, color, size, SKU number, etc.  That said, no one really browses Amazon for a cool jacket, nor is there anyone there to help guide you to the right thing.  I honestly believe the future is Amazon plus independent retail, for this exact reason.  Buy the stuff that is routine, boring, and just needs replacing from Amazon.  Buy the stuff that is fresh, new, exciting, and fun, at independent retail.

“No one really browses Amazon for a cool jacket.”

REASON #5: IN ANY ENVIRONMENT, THERE ARE BUSINESSES THAT GROW, FOR A REASON!

I began my consulting company almost 10 years ago, and after I had been consulting for a little less than a year, the recession hit.  At first, I was super worried about my clients, because I thought they’d get swallowed up in the financial disaster.  The exact reverse happened.  Why?  Because we all worked together, shoulder to shoulder, and fought for every dollar we could.  We got creative.  We found new ways to promote the stores, new fun things that would bring customers in, innovative and enticing in-store events and activities that kept shoppers shopping.  It wasn’t easy, sure.  But I learned something very important, which is that great businesses are driven by great people who figure out how to make things happen.  So what does a retailer need to do today to achieve growth, to make the stores work?

First, your store has to be a destination. People need a reason to go – not just because of sales, either.  They’ll come to fun events, to trunk shows, to parties, to anything that makes the experience fun.  Find great new things for them to do, and they’ll show up.

Second, you need to market yourself like crazy.  Lots of emails, lots of social media posts, lots of in-store events, lots of clienteling.  In this day and age, we are all bombarded with a million messages.  Yes, everyone’s yelling.  You have to be out there, too, and making the right types of noise that remind your customers that you’re still there and that they need to show up.

Third, and without question, the most important, is that you have to have the right inventory, at the right place, at the right time.  You absolutely MUST control that investment, you must manicure it, curate it, massage it, and love it, so that when your customers arrive from the above two steps, there isn’t an ounce of disappointment, and your customers leave with bags of merchandise, having had a great time shopping.  That’s how you win market share, keep customers, get great cash flow, and experience the FUN of having a retail store.

Fun?  Did he just say fun?  But what about Armageddon?  I guess when they ask you about it, you can LOL, but really laugh out loud.

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