Scha.Den.Freude.

OK, that wasn’t actually my first feeling when I heard that The Limited would be shutting its stores effective immediately. Rather, my first feeling was that of nostalgia, maybe even sadness.

After all, like so many women my age, my first job was at The Limited, and the source of so many key life skills I use to this day. The invaluable life skill of selling and servicing, how to deal with low lifes, a little bit about design and styling, and of course, how to steam clothes without burning yourself.

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The dear departed. Image courtesy of Chain Store Age

But then, the schadenfreude kicked in. Good riddance, I thought, to The Limited and all those chains (Macy’s, Ann Taylor, Gap. Abercrombie, American Eagle Outfitters, BCBG, Wet Seal, Bebe, Hot Topic, and more weekly) with their same uninspired approach to the art and craft of retail.

And lest you think that the luxe end of the market is immune, Saks is struggling financially despite a major revamp of its stores, while Neiman Marcus has yanked its IPO and Tiffany has lost its luster.

We have entered the Dark Ages of Retail. Yes, consumer demand is shifting, there’s the Internet, etc. But a great deal of the damage is self-inflicted:

  • Lack of self-awareness: So many retailers didn’t/don’t seem know who they are, or WHY they are. Instead, they chase the latest up and coming market, losing the essence of their brand along the way.
  • Lack of originality: They insist on selling merchandise that’s uninspired, undistinguished, undifferentiated.
  • Lack of imagination: They persist in soulless store design and an enduring lack of sensitivity to creating an experience that’s memorable, emotional, compelling … and superior to the internet (which, when you think about it, still delivers a pretty crappy experience for anything but the basics).
  • Apathy: Retail chains persist in rolling out cookie cutter stores (many poorly designed), so you don’t know if you’re Albuquerque, Atlanta or Amsterdam. The rationalization done in the name of efficiency and brand integrity. Of course, some of that is important, but doing it at the expense of boring customers is self-sabotage.
  • Over-reliance on discounting: When a store is 3/4 sale rack and 1/4 new, you have a problem.Discounting is retail crack, but like any drug epidemic, it creates all kinds of bad effects.
  • Inattention to the details: They skimp on staff training and nurturing, resulting in a cadre of bored, unmotivated “team members” more interested in Snapchat than customer service.

The easy way to think about all this is, of course, “The internet’s so much better for shopping so let retail die.”

And yes, while all those chains have indeed squandered the right to be in business, the accelerating problems in traditional retail are going to have a big impact on communities and people (Macy’s is axing 10,000 jobs – and that’s just for now). And there’s all that real estate and all those malls, the default town centers of so many suburbs. (Real estate analyst Nick Egelanian notes that there are 1000 traditional malls left in the US, down from 3000, and that 2/3rds will close before this bloodletting is done. As if to underscore that point, Wells Fargo found itself the only bidder for a Pennsylvania Mall, and paid $100 for it. Wells, it turns out, had foreclosed on it the year before.)  And it’s all those entry level jobs where you can learn about showing up on time and the  art and craft of customer service.

No end of industry analysts have pontificated that it’s experiences that we all want, not “stuff”. Some truth there. But does it really make sense to have all those brands (high or low) move out some product, and start adding random massage services, trunk shows, local maker “pop ups”, DJs, and whatever else in a completely uncontextualized way that doesn’t relate to a larger brand story? No, particularly when they continue to try to sell unimaginative, banal, shoddy products. It’s not just about omni-channel, either.

We will never go back to that halcyon days of ever-expanding growth, but retail is important for jobs and communities and really, for humanity. So here are a few interrelated ideas on how to fix retail, be it at the low, middle, or luxe end of the market. And while, for retail chains fixated on traditional metrics of sales per square foot and marginal cost, they may not be the most profit maximizing, efficient, or streamlined.

Bottom line: the salvation of big retail lies in thinking small. This forces a different way of thinking, operating, buying, and even conceiving what “retail” means. But it’s how to get consumers engaged again. And yes, those consumers might even buy something along the way.

Know, and live your brand. Most of these chains have fallen apart because they don’t know who they are. For many of the dead and dying chains, the idea – the brand essence – that connects merchandise, merchandising, store design, and promotion seems to have never been there, or have been eroded completely. Consumers lose faith. Investors follow.

Naturally, it’s easier when you’re a newer brand or a small one or one that sells directly: it’s no surprise that specialty, own-brand, and concept stores (L’Eclaireur, Dover Street Market, Collette, Apple, and Warby Parker) do this particularly well but the challenge for larger retailers of all stripes is to regain that energy and originality and laser-like focus on the brand.

Re-conceive what the store is. It’s brand expression, service, and marketing  for whatever is being sold. It is only secondarily a sales channel.  Embrace the idea of showroom, not salesroom, of flexibility, not fixed spaces.  (Yes, this is where omni-channel comes in.) Maybe that desire is fulfilled in the store, or online. It shouldn’t matter. For that reason, embrace the principles of concept and lifestyle stores out there for whom it’s about mood and story (aka brand), and just not a place to display inventory.

Loosen up. Cookie cutter stores must die. A store in Albuquerque SHOULD look different from the one in Amsterdam. Embrace terroir and place: maintain or build local brands, or at least have highly local edits in terms of merchandising and store design. This may not be efficient, and merchandisers will hate it. But keeping things relevant and connected to place adds personality, reason to buy (particularly for tourists).

The Federated/Macy’s strategy of acquiring venerable, beloved local brands like Marshall Field, then either closing them or renaming them Macy’s, sowed the seeds of the chain’s woes. Makes great sense of paper, of course: it’s about efficiency of buying and merchandising, promotion, brand, and the notion that consumers love to shop from brands they trust and are familiar with. But it doesn’t take into account the power of place and the need for these retail palaces to be about community, not just consumerism. If there’s no emotional tug, why not just turn to the internet?

The irony about knowing who you are as a brand is that it also becomes easier to play with it, expand on it, riff on it. A wonderful example of this is Aesop, who – confident in who it is – has a different look to each store, created by different architects using local materials.

Embrace scarcity and surprise. Ubiquity is the killer in the luxury category, but increasingly (thank you, Internet) the more mainstream categories as well. So how do you create scarcity?

Get scrappy and do what the small indie brands are doing, of course. Fewer and smaller stores; shorter runs on the merchandise; limited editions; mobile retail; unlikely markets; showing up in other peoples’ stores; pop ups that are true works of art. But with scarcity comes responsibility: you have to be imaginative about it and highly memorable when you do appear. But then, leverage all the resources that come with a bigger enterprise: high quality design; higher levels of service; including customized service;  omnichannel; and deeper inventory.

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Freda Salvador mobile pop up at West Coast Craft in San Francisco, 2016

Treat your merchandise with respect. Choose better quality, choose less, discount less. Differentiate. Don’t buy the trend. Don’t BE the trend.  No mass buys. No mass sales. There’s not much else to say on this point.

Learn to let go. Not every retail brand needs to be around forever. Some brands (Hot Topic, for example) are so rooted in a zeitgeist or trend that it doesn’t make sense for them to continue. Some brands just don’t stretch that far in terms of equity. Don’t keep stretching them, or keep adding spin-offs that chase a market, but still are in need of an idea (as Limited did with Limited Express.) Let brands die before they get killed. Create new ones that make sense. Then let them die too.

As big retail begins to reinvent itself by getting smaller, here’s a provocative question: What if your showroom/alt-store idea were so great that you could charge people to get in? What would that mean? It would mean, theoretically, that you could lower your prices for the merchandise because people are paying directly for the retail experience – something that can’t be replicated online. I recently went to an art fair where the cover charge was $35 just to get in: no freebies or discounts. And I paid the fee properly knowing that I’d see things I couldn’t see everywhere, would meet interesting people, and would be a part of “an event”. Why not?

Obviously, all this requires a complete rethink of retail culture, operations and the whole notion of how to master broad-based retail. It can’t be command and control from a central office any more but instead requires creativity, smarts, and flexibility in the “field” and the actual market level. And that means people. Is there that kind of talent out there? Sure. It’s probably just not in the traditional retail sector.

Great stores can be magical, soul-restoring, and important. Let’s hope that the current retail Dark Ages creates its own Renaissance.

 

 

 

 

 

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