As a Denver marketing agency, we continually identify and evaluate current marketing trends. While reading a recent article about the closing of U.S. retail stores, it was obvious that all businesses are facing many of the same challenges today. After this story summary, we have provided a list of how you can use this information to help make your company more successful.
Eight Retailers That Will Close the Most Stores
By Douglas A. McIntyre, Samuel Weigley, Alexander E.M. Hess and Michael B. Sauter | 24/7 Wall St – Fri, Feb 1, 2013 12:50 PM EST
“It is the time of year again, when America’s largest retailers release those critical holiday season figures and disclose their annual sales. A review of these numbers tells us a great deal about how most of the companies will do in the upcoming year. And while successful retailers in 2012 may add stores this year, those that have performed very poorly may have to cut locations during 2013 to improve margins or reverse losses.
For many retailers, the sales situation is so bad that it is not a question of whether they will cut stores, but when and how many. Most recently, Barnes & Noble Inc. decided it had too many stores to maintain profits. Its CEO recently said he plans to close as many as a third of the company’s locations”
Several of America’s largest retailers have been battered for years. Most have been undermined by a combination of e-commerce competition, often from Amazon.com Inc. and more successful retailers in the same areas. Borders and Circuit City are two of the best examples of retailers that were destroyed by larger bricks-and-mortar competition and consumers transitioning to online shopping. These large, badly damaged retailers could not possibly keep their stores open.
Store closings can bring a retailer some relief and may not always portend its demise. Gap announced in 2011 it would shutter 21% of its U.S. store base. It has since transformed itself into a much more successful clothing retailer. As the retailer completes the process of downsizing, its store operations likely will become even more efficient and its margins greater.
Very few retailers get into sudden trouble. Chains like Kmart and RadioShack Corp. have struggled for years just to stay in place. Their brands have lost much of their luster. Their stores have become old and their locations no longer attractive. The consumer’s perception is that the products they sell can be found elsewhere, usually at a cheaper price, and at retailers with better customer service and wider selections of products.
These are the eight retailers that will close the most stores in 2013.
> Forecast store closings: 200 to 250
> Number of U.S. stores:1,056
> One-year stock performance: -36.8%
Kmart 175 to 225
|Barnes & Noble
> Forecast store closings: 190 to 240
> Number of U.S. stores: 689
> One-year stock performance: 8.95%
How to Use This Information to Make Your Company Stronger
The way your clients and customers find you and evaluate you has changed forever! They are going to use search engines, they are going to look at your website, social media and read 3rd party reviews. They are going to do this using full-size screens, tablets and smart phones. Then, after a few seconds, if they believe that you have what they need, provide value to them, and you have made it easy for them to do business with you, you may be able to begin a relationship. If not, they will move on. Make sure you are focusing on these key areas.
More successful retailers in the same areas
Do you know exactly how you are better than any of your competitors? Have you studied them and are you able to clearly and relevantly explain the difference between doing business with you and doing business with them? If not, add this to action items list.
Become even more efficient and its margins are greater
Are your continually tracking and improving the efficiencies of your processes? Are you continuing to create increased margins and increased relevant value to your clients and customers (the experience)?
Make sure you are tracking this information on a frequent basis.
Brands have lost their luster, stores are old and no longer attractive
If you are not continually conveying emotional value, thought leadership and a dynamic image that remains fresh and exciting, your brand will lose its luster and your clients and customers will go elsewhere. You have to continually “think ahead” of your customers and reengage to add value on a regular basis.
The products they sell can be found elsewhere, usually at a cheaper price
To avoid this, you must focus on the experience people have with your brand and the value you provide to their lives. The more broad the view of your offering (e.g. we just provide lawn care), the more perceived competition you will have in the marketplace. In our commodity driven world, where customers tend to adopt a broad view of your services and then shop based on price, you must understand how to evolve your offering message to elevate yourself through your brand experience, to ensure that customers are engaged with your brand and value instead of shopping for the product you sell.
Better customer service
In our competitive environment and in an age of social media where everyone’s opinion is public, NO ONE should ever have better customer service than you! You can talk all day about how great your product is, but if you do not have the engaged culture and the on-the-ground people to provide an amazing customer service experience, you simply are not achieving all that you could. You must focus on this as a part of your overall offering and the living manifestation of your brand.
Wider selections of products
Convenience and ease of use (the relationship, ordering, paying, talking with someone, one-stop-shopping, etc..) are paramount to the relationship that you must create with today’s consumer. Make your customer’s lives easier by providing them with complete solutions instead of just selling products. If you cannot offer EVERYTHING to them, be sure that what you have to offer is something in which your specialized knowledge and your unique approach to delivery is enough to keep you ahead of other more comprehensive options.
Marketing Wrap Up
If you would like some help applying these concepts to your company, call Webolutions at 303-300-2640. We believe in making a difference in people’s lives. We would be happy to provide you with a complimentary one-on-one marketing consultation to help get the ball rolling for you.
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