In recent years, retail has gotten a bad rap, especially fashion retail. Too often stores have fallen into a slump, neglected by management shift in attention to building up their e-commerce channels. Many brands had too many stores and too little revenue to maintain them all properly. That's led to a rash of retail closures in many key markets around the world. But is physical retail really fated to become just a memory of the way we used to shop, or can the right people with a vision, and the drive to bring it to fruition, rejuvenate retail into a dynamic place where today's consumer wants to shop? “A few years ago we started to hear about the demise of retail, which people were calling ‘the retail apocalypse’ and I thought ‘that does not apply to the hundreds of 1000s of people who work in this industry’,” said Ron Thurston, Vice President of Stores at Intermix and author of the bestselling book <i>Retail Pride</i>. While many of the bigger brands and retail chains have filed for bankruptcy during the past four to five years, they don’t represent the total retail sector. Their failures (prior to COVID) have been as much a result of decisions their leadership made as it was due to market conditions. <h3><b>Innovate, Not Replicate</b></h3> Too many businesses spend too much time obsessing about the competition. However, they do this at the expense of under servicing their own customers. While they chase the other guy’s customers, they end up alienating or overlooking people who came to their stores - but left empty handed. For too many retailers, in copying someone else they miss opportunities to do innovative things that would enable them to better serve their own customers, while also attracting new ones. “I helped launch the retail concept for Bonobos known as the ‘guide shop’. This was very much a controversial way to operate brick and mortar with no inventory. They said that the entire purpose of the store is service, and that we are here to teach men what size chinos they should wear, how to wear a suit in the best possible way, how to style their wardrobe, how to update it without huge dollar investments - it was entirely based on service. All the inventory was held in the warehouse and shipped directly to the customer’s home. They felt that we can actually create great brick and mortar with low investment upfront, low low cost store build outs, relatively low payroll, but in a really engaging way. And what we found is that those customers were incredibly loyal to the brand. They spent more money. We could capture all the CRM data that everyone wants. Because once you've had this experience, with a guide, as they call them, then that guide can stay in touch with that customer and say, ‘Ron, we just got in new colors of that Chino, or that shirt in that fit that you like. Definitely check out the website or come in and see me and I'll show you what they look like’. “That's a new way to think about business. The traditional model of holding too much inventory with very little payroll, and low levels of service is why many brands ended up in trouble. And that's where we have to dig ourselves out. “Sometimes we have to take risks and do business in a non traditional way. Staff the business in a unique way, hire people that are different, all of it should create memorable experiences for the customer that they didn't expect to have when they walked in. If you build a store that is just four walls full of product, throw some salespeople in and a ‘cash and wrap’ counter and think it's going to work, well that is not the future. It's not because they can buy that product anywhere else. But what they can't buy is the service that your team is going to provide or the conversation, the experience, the connection, the education that comes whether that's education about the brand, education about how to wear something, what to do with it, how to use it. That all happens in brick and mortar,” said Mr. Thurston. Going forward, most retailers are more likely to see better results by selling lower volumes with better margins. Only a few retailers will be able to succeed as discounters. “We’re going to have smaller fleets of stores, and those stores have to be highly productive and highly influential about how the customer interacts with your brand. Engagement is the name of the game today. “I think a customer should be able to leave a brick and mortar business - whether its apparel, tech, home furnishings - and have learned something that you didn't already know. Great sales teams are, of course, concerned about making sales, but they also want to engage and teach and they want customers to learn about their brand. The goal is to make the customer feel that when they’ve left your store they're smarter or better dressed than when they arrived,” said Mr. Thurston. Ultimately, if you can make a person feel better about themselves or help them solve a problem, they'll want to buy. <h3><b>The Big Data Trap</b></h3> “I think there's nothing more powerful as we look to rebuild this industry than ensuring that every level of leadership within an organization understands the customer and spends some time being customer facing and being right in the heart of where the business happens,” said Mr. Thurston. The growth in the ability to capture ‘big data’ has led many retailers and brands to rely on it exclusively, overlooking the ‘soft data’ that comes from interacting with customers on the selling floor. Big data will tell you what customers bought, but it won’t provide any insights into why they didn’t buy - or what they might have purchased if it was available. “You can't learn what's in the customers' heart and mind through what they're buying on your website. You don't actually know, all you see is the transaction. And you may have CRM data, and you may have some survey data, but you'll never learn as much as you do when you're in the store on the sales floor, asking questions of your team and asking questions of your customers,” he added. “We can see evidence of these by looking at how low the typical percentage of conversion is on websites - roughly 1-2 percent. So what did the other 99% of people that didn't make a purchase want? In stores, if your conversion rates are at 15-20 percent, why did the other 80 percent not buy? What were they looking for? You can learn a lot by just asking customers questions. Store teams have all the answers to your business. They know exactly what’s happening because they can hear what the customer is saying - what they are looking for. Why something didn’t fit well. Why they didn’t like the season’s collections. This is critical information,” said Mr. Thurston. <h3><b>Road Map for Renewal</b></h3> Knowing what we now know, how do we reinvent or re-energize retail as we head out of a pandemic that has forced people to stay away from stores? “As we reset 2021, and you think about a growing e-commerce business, maybe a slightly declining or flat store business, and maybe a shrinking fleet, I would encourage retailers to take that fleet and reinvest back in it and make it the best possible expression of your brand. “We need to say ‘Let’s find the best possible people that can work in our stores. Let's pay them well. And let's create an environment of success. My experience has been that where it has fallen down is cost.. But cutting all the costs and stripping out everything, and thinking that it's going to reinvent itself is actually not the right approach, in my opinion. Instead, put a little bit more money into it. And you would be really surprised what could happen,” he said. There’s also a need to get senior management and buyers involved in the retail side of the business - to build a strong connection between them and their customers. “Any business today with a brick and mortar fleet should have all of its team members spend some time in stores, whether that's through the onboarding process, through a week each quarter in stores - there has to be a continued connection. If you're a buyer, you have to understand the customer and the customer is in your stores every day. Talk to them. Say ‘hey, I'm the buyer for sweaters. Tell me what kinds of sweaters you're looking for right now.’ By just getting into the heads of the customers and the sales team who are interacting with the customer every day, you can learn so much from that,” he said. “ I think we have the opportunity to do this better this year. We have to, we actually don't have a choice now,” said Mr. Thurston. <hr> <i>Note: “<a style="color: #0000ff; text-decoration: underline;" href="http://www.retailpride.com" target="_blank" rel="noopener">Retail Pride</a>” by Ron Thurston is available on Amazon in hardcover, paper or Kindle formats.</i>