Retail IS detail. And some of those pesky details are increasingly cropping up to torment online sellers. For example, there's the matter of managing returns. As Chris Jarvis wrote in DMM/ShoppingCenters.com*:
Meanwhile, the pure-play online retailers are confronting the ever-demanding customer expectations.
Is it any wonder that Amazon partnered with Kohls to accept Amazon returns? As Jarvis points out, "Returns start inside the local community – you need to be everywhere your customers live." Surely other online merchants will be jumping onto that lifeboat. Meanwhile, online merchants are beset by other challenges. And once again, they discover newfound respect for physical retail, and actual customer interaction. (How do those guys make it look so easy, they wonder. 🤔) "The rising costs of doing business online is making physical retail more appealing for e-commerce brands," noted The Wall Street Journal** in "Why Bricks Might Save Clicks."
All of which prompted plans from online furniture seller Wayfair to open three brick-n-mortar stores this year; the stores will be "valuable avenues for discovery, visualization and marketing," they explained to their investors. What's really driving this move to physical retail to attract new customers? Because online advertising costs have increased dramatically.
In a sense, online selling just may have seen its best days. It will always be part of retailing, but it will no longer be the tail wagging the dog. A comeuppance is happening. --- * Combating the Returns Crisis – Charting a Path Forward. Chris Jarvis, ShoppingCenters.com, February 16, 2022. ** How Bricks Might Save Clicks. Jinjoo Lee, The Wall Street Journal, April 22, 2022.
Here's a post-pandemic strategy that should not be missed: higher margins! Not the entire store, of course; you must be a merchant here. But think about it: many shoppers have increased savings, reduced debt, or gotten their job back. Maybe all three. And after months of being at home, and spending on home improvement and groceries, many shoppers have pent-up demand to spend on items they have had to postpone, like for themselves. Whether that would be in a restaurant or in a specialty store, shoppers are more willing and able to spend. (And some even feel entitled to spend.)
Each of us, our households, businesses and communities are in different stages of shutdown due to the coronavirus. While we cannot speak to when this will end, we do have some ideas for dealing with the "fog of uncertainty" that hangs over us all.
For retailers, the Fog of Uncertainty that began in April 2020 around the pandemics keeps coming back. Just when it appeared that we were ready to "get back to life" if not "back to normal," the Delta variant has surged. This has created more uncertainty. How willing are your customers to actually go out and shop? Even more important (to you): how willing are YOUR customers to shop with YOU? So, here's an idea: Why not ask them? Really. Send them a short questionnaire.*
That's a sign of the times, isn't it? While retailers are more accustomed than most folks to cope with change, 2020's unrelenting flexibility tests have been a challenge. Forget about five years. Retailers have to be ready for the next five months! It's back-to-school and then Holiday. The only certainty about the next five months is that they will probably feel like the past five months. Yet you still must run a retail business. And that means you still must buy and sell merchandise. The opportunities – and the pressures – are mounting.
We often caution that many vendors are so much better trained at selling than retailers are trained at buying. In their eagerness to grow sales, and the associated promise of thereby growing profits, it is all too easy for retailers to become overbought. Instead of higher profits, they can find themselves in a cash flow crunch. And that was in Before Times, before the pandemics. Throughout 2020 and continuing now, vendors and retailers alike have increased their online capabilities. Ordering online brought new challenges to buyers and sales reps, but also saved time and improved access.
We have applauded these advances in technology, but...
For some time, conventional wisdom has characterized independent retailers as "technology laggards." Not that they are Luddites; it's just that they regarded retail technology as a major expense, especially in human capital. They often were cautious, even skeptical, about the promises of new technology being pitched to them. When the pandemics arrived, many retailers responded rapidly and smartly. In scramble mode, some crammed five years of technology adoption into five months! Now, as the lockdown restrictions recede, the conventional wisdom eagerly suggests that consumers of all ages will continue to rely on online shopping and other technology. Hmm. Let's consider that "conventional wisdom" a bit more closely.
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