We started this year with news about retailers closing some of its stores in different locations across the country. Probably, you have been aware of some of these retailers’ economic woes; however, some others were news for us. Some of these retailers closing stores are: Finish Line, GAP, JC Penney, Kmart, Macys, and Walmart among others. Brands that we thought they were strong are losing grip on the market. What could be happening in the retailer industry?
First, the changing demographics is taking its toll and brick and mortar stores cannot change as fast as they would like to. Millennials are becoming the new consumers/shoppers and they have a completely different behavior towards the shopping experience: they prefer brands with strong social media presence; they like to be entertained while they shop and do not like to wait. Retailers have to be ready to change fast and introduce new ways to engage the new generation of consumers. Is your business engaging the new generations of consumers?
Second, based on the Food Marketing Institute research there is no longer a “primary” shopper in the household; it has changed and now has become more and more a “shared” shopper experience in which none of the household members have the main shopping responsibilities. This translates in consumers shopping for food and beverages across multiple channels; they no longer go to one store to do their groceries. Do you know who the shoppers in your business are? Is your business ready to attract cross generational consumers?
Third, the consumer now is more conscious about a healthier eating and looking for better quality products. For example, private label groceries are projected to grow 63% in 2016. The consumer is demanding new products that satisfy their new habits which mean a more fragmented and diverse market. Thus, the profit for the retail industry is no longer concentrated in one place but fragmented among the different subdivisions of consumers. Are you keeping the pulse of your industry?
The retail industry is changing fast and they need to change quickly if they want to stay in the market and remain a relevant brand. The industry needs to look in the new trends and search for commonalities within their current business model and change what is no longer relevant. The dark clouds are in the horizon, this is a good time to make changes in technology, reduce store size, bring higher quality products, and innovate. Is your business ready for what the market may throw at you?
