New success mantra for offline retail
After a relative lull in new mall building activity reports say that across India, both in Tier I and Tier II cities, mall building is once again picking up steam. Space allocation seems to be changing a bit from what we saw in the last decade, with more emphasis on ‘experiences’, ‘food’ and ‘fun’.
While malls are going through this change, the other side is not blinking. In fact, the other side just bought blow torches and are wearing welders glasses. Walmart acquired majority stake in Flipkart for a mind-numbing amount and has announced that it will not rest till it wins the India battle (lest you forget, Flipkart just around 18 months ago was written off as an also ran, which will never win the final race). Amazon too is gearing up for the long battle. Consumers are going to be accosted with more and more luscious deals. Multiple offers are going to be showered on customers and more and more millennials are going to do their shopping from their couches. What will make them get up from their couches?
What then happens to the good old fashioned traditional mall and big brand department stores?
A report in the Wall Street Journal (May 23, 2018) indicated that US is facing its biggest crisis in retail. Net absorption of retail space in the US slowed to 11 million square feet in the first quarter of 2018, the lowest since 2012. Store closures were at 105 million in 2017 and this year the number is already at 95 million and we have a full half year left.
Brick and mortar retail is figuring out new ways to fight online, by making retail shopping a lot more than just going to a store and buying products. I came across the term ‘shop crawl’ as I read the article. Shoppers are treated to new experiences in cities across the USA: A three hour vintage and salvage shop crawl in Wisconsin; a summer shop crawl in Iowa city complete with cocktails; and even a 10-day needle point shop crawl across Washington state, Oregon and California.
These seem to be working and organisers are now being forced to put a cap on the number of people they can take on these ‘shop crawls’.
By changing brick and mortar shopping from just looking at things and buying what you like, a shop-crawl type activity truly turns shopping into ‘shopper-tainment’.
A recent article in The Economist too confirmed this phenomenon was taking hold in the UK as well. Malls are getting transformed into ‘engagement zones’. The article goes on to day, “The new mantra on the high street is to focus on ‘what Amazon cannot do’.” So while big retail chains are shutting operations, malls are discovering new ways of filling up the acres of floor space vacated by high-street brands.
It was therefore interesting for me to see a kind of ‘shopcrawl’ make its way into India. Reliance Retail has been selectively advertising their Project Eve, said to encompass fashion, beauty, salon and events. The ad promises many experiences in one store. They even ‘offer a personal stylist and sleek in-store salon and many more thoughtful surprises’. The chain also speaks of unique workshops for ‘strong, curious and creative women to meet and learn new things about themselves’ under the ‘She Sessions’.
This move is changing the discourse of retail being about selling products at various prices to selling experiences. And I am sure it will find many takers. As an aside it is said that Reliance was the first textile brand to have organised fashion shows to launch their Vimal brand across the country more than two decades ago. So the concept of mixing retail with events seems to be in the brand DNA.
If you can’t stage an event, you can innovate and build traction by embracing a cause that means a lot more to Indians. The move by Raymond to partner with khadi is a great example of a large “suit-boot” company taking the cause of village craftsmen. The advertising has been eye catching and if you have visited the stores you will be quite impressed with the kind of high fashion stuff that has been made out of humble home spun Khadi. I wonder if the brand could have added a little more drama (shop-crawlesque] to their khadi journey by actually demonstrating how khadi threads are spun and how they are used in the fabric making. Nevertheless full marks for a pioneering move.
The concept of brick and mortar retail evolving from just selling products to creating experiences is now par for the course. The faster they do it the better it will be for them. And if this happens fast enough the millennial couch potato would be ready to get up and drive down to the retail outlet or department store. And chances are she/he will not be bothered by the little extra they may have to pay for the skirt, suit or scarf.