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Take a closer look at the ‘Retail Apocalypse’

In this Behind the Gavel column, Wayne Jordan sheds light on the misconception of the 'Retail Apocalypse' of 2017, which he explains - with supporting evidence - is really a shift back to small business.

Do you remember the Retail Apocalypse of 2017? It sure got a lot of press. CNBC, The Washington Post, CBS, Fox, USA Today, and most major news organizations rallied around the Apocalypse concept. They're happy to assert (again) that bricks-and-mortar retail was dead, overwhelmed by online sellers. They seemed to have the facts to back up their stories: In 2017, around 6,700 U.S. storefronts closed, including closures and/or bankruptcies by such retail icons as JC Penney, Sears, The Gap, Banana Republic, The Limited, Eastern Outfitters, Radio Shack (for the second time), Gander Mountain, Payless ShoeSource, Rue 21, Vitamin World, Toys R Us, and others.

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But, the news outlets seriously misrepresented (or simply didn’t understand) what was happening in retail. They missed the “big picture.” What they were asserting was pure fiction, much like the 1978 zombie apocalypse movie “Dawn of the Dead.”

More to the 'Apocalypse' Story

Here’s the story that was rarely reported: Among chain stores, U.S. retailers opened 4,080 more stores than were closed. Better still, it appears that there will be another net gain of 5,500 stores in 2018. Add in small retailers and the net gain becomes closer to 10,000 stores for 2017. Greg Buzak, president of the global research firm IHL Group points out that: “The so-called ‘retail apocalypse’ makes for a great headline, but it’s simply not true.”

Not true, indeed. What we are experiencing, instead, is a major shift back toward small retailers.

Fifteen years ago, the retail pendulum swung toward online selling. Ultimately, the online customer experience was hollow. There’s nothing touchy-feely about online buying; there’s no atmosphere or personal interaction with the merchants. Online buying occurs in a sterile environment, and today’s consumers want more. So, the retail pendulum is swinging the other way, and that’s good for antique stores.

John Persinos, in his May 2017 Investing Daily article “Main Street’s Revenge: Going ‘Small’ Is The Next Big Retail Trend” says:

Small Business Perspective

“Americans increasingly demand a distinctive shopping experience ... With more retail sales concentrated among a narrower band of large retailers, shoppers are looking for products and services that stand out from the pack. This dynamic creates an opening for smaller companies that have forged a compelling identity. The maturing of the huge Baby Boom generation is creating a fickle but affluent class of customer.They are looking for a more emotionally rewarding shopping experience that mimics the feel of Main Street.”

“Emotionally rewarding experiences” are an antique dealer’s stock-in-trade. We offer the nostalgic touch-points that create emotionally rewarding shopping experiences for our customers. It should be stressing this point in all of our marketing activities. We have (or can develop) three elements that big retailers can’t (or won’t) employ:

Well-Curated Inventories

The ASD Market Week Lifestyle Trend Report suggests that “curated journeys” are a powerful retail

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trend. The report says: “The curated journeys trend is an exploration of antique malls, flea markets and craft fairs in search of hidden vintage treasures. These interesting items are quickly added to households in order to tell the homeowners’ stories.” Your store is full of merchandise that may trigger a customer’s memories. They certainly can’t get that at Walmart or Amazon, can they? For a more detailed discussion of building a curated journey in your store, see the May 11, 2016 Behind the Gavel column, “Nostalgia Merchandising: Selling emotional appeal”.

Sights, sounds, and smells are strong nostalgic triggers. In July 2012, Entrepreneur Magazine published an article titled “5 Ways Store Colors Can Influence Shoppers” It’s not necessary to re-paint your entire store; adjusting wall colors with colored track lighting is as easy as changing a light bulb (once you have the tracks up, of course).

Background music adds to a customer’s comfort level, and can inspire them to stay in your store longer. According to Spectrio, background music is “a tool for improving the performance of your store and the experience of everyone who steps inside.” Not to be overlooked in create an inviting shopping atmosphere are fragrances. One’s sense of smell is, perhaps, the strongest emotional trigger of all, as discussed in the December 15, 2013 Behind the Gavel column

Down-Home Atmosphere

Smells Sell: Studies show pleasant odors put shoppers in the spending mood." Creating a down-home atmosphere in your store can be as simple as adding music, some mood or colored lighting, and a few sprays of fresh-baked-bread or other fragrance from retailers such as Sensory Decisions.

We’ve all heard horror stories of department store customers being ignored while employees engage in a gab-fest or are buried in their phones. These days, shoppers almost expect to be ignored in retail stores. (Are zombie employees a reason for the Retail Apocalypse?) Studies have proven that retailers that warmly greet and engage shoppers create the “emotionally rewarding experience” that causes customers to return regularly.

Research by AT&T Retail in their 2,400 stores proved a simple tactic that, when used regularly, leaves customers with a positive impression of a store. Consultant Carmine Gallo reported the results in an article for Forbes Magazine.

Staff Engagement

The test was performed with two focus groups. Group A customers were not greeted upon entering the store, and were forced to wait three minutes before they were approached by an employee. Group B customers were greeted within 10 feet and 10 seconds of walking through the door, and they were told that an associate would help them “in about three minutes.” Each group waited exactly three minutes to be served.

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The results are clear: Group A customers (without a greeting) offer much lower scores to their overall experience than those who were greeted warmly. The greeting made a significant difference in the customers’ overall evaluation of their shopping experience. Furthermore, today “10 feet and 10 seconds” is a key customer service guideline in each of AT&T’s retail stores in North America. Antique dealer, is that a tactic you can use as well?

In conclusion, your well-curated inventory, down-home atmosphere, and engaging staff are three key elements that differentiate your business from online and big-box retailers. Retail is trending back in our direction; let’s prepare to capitalize on that trend.