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Last updated on August 26th, 2021 at 01:57 pm
The retail industry has undergone an undeniable metamorphosis over the last several decades. Many retailers that dominated the brick-and-mortar space twenty years ago have been pushed aside by ecommerce giants with impressive product inventories and fast shipping options. While there are a number of reasons why certain retailers experience extinction, there is one common thread for those who succeed—they buy into the concept of remarkable retail.
According to Steve Dennis, president and founder of SageBerry Consulting and author of “Remarkable Retail: How to Win and Keep Customers in the Age of Disruption,” the concept centers on being customer-relevant at a higher level than the competition. If a retailer isn’t convenience-oriented, upscale-geared, discount-based, or relevant in another high-concept way, it may not be able to sustain its place in the market. The “unremarkable middle,” as Steve refers to it, is a dangerous spot for retailers. A niche-based place in the market is a much safer bet.
Steve recently sat down for an Endless Aisle podcast episode with NewStore’s Senior Director of Marketing, Marcus LaRobardiere, to dive deep into what remarkable retail really means, how brands can leverage the art of storytelling, and why some brands have failed to succeed in the modern, digital-first era. Read on for several highlights from Marcus and Steve’s discussion, some of which have been edited for clarity.
On the concept of remarkable retail
“There [are] two things fundamentally wrong about this narrative of the retail apocalypse. One is that physical retail continues to grow. The brick-and-mortar stores have continued to grow for eleven years straight now, basically since the financial crisis. It’s clearly true that physical retail isn’t going away—85% of all sales are still done in brick-and-mortar stores.
“Obviously, ecommerce is growing much faster than physical stores. But if you actually look at where stores are being closed and where retailers are getting themselves in trouble, it’s overwhelmingly concentrated in what I call ‘the unremarkable middle.’ If you think about different business models simplistically, [on] one end of the continuum, you have value, convenience-oriented retailers, whether that’s Costco or Amazon or Walmart, or any number of the off-price guys. [On] the other end of the spectrum, you have high-end luxury or very upscale specialty stores. If you look at both of those categories of retailers, you can find exceptions of poorly-managed companies or companies that took on too much debt, but at either end of the spectrum, you see stores continuing to open profits and sales growing.
“If you look at the group in the middle that’s neither particularly value-oriented or convenience-oriented, or doesn’t have unique products, [like] the moderate department store sector—the JCPenney’s of the world—that is where the vast number of store closings and declines and profits and sales are concentrated. In a world where you can get just about anything you want, from any place in the world, anytime you want, it’s very difficult to stake out a position that’s sustainable without being truly remarkable in some respects.
“The idea of remarkable is really to set that bar for being different—being customer-relevant at a much higher level.”
On leveraging the art of storytelling in retail
“The lines between digital and physical are blurring and our job is to provide that seamless experience, but also a real unique experience—however the customer wants to shop. Years ago, you could probably distinguish yourself [by] having a well-harmonized shopping experience. Today—and COVID has really amplified this—that’s becoming more of a basic expectation. If you don’t do it, you’re probably not in the game. The real distinguishing characteristics are to try to create something truly memorable for the customer.
“The real powerful thing is that people will talk about it. You’re doing something that creates a story for that customer that they can tell about themselves—that they want to tell to others [and] share on social media. That is where you’ve connected to customers in a powerful and emotional way. Frankly, word of mouth is the most powerful marketing of all.”
On why some retailers have failed to succeed in modern times
“[Regarding some retailers that] are gone, I don’t think they were fundamentally close enough to the customer. They didn’t appreciate the degree to which customer priorities were changing. I don’t think they realized the degree to which technology was disrupting—and in some cases, basically destroying—ways of doing business.
“When we go back to the retailers that are stuck in the middle, I think they were defending the status quo. They wanted to believe that a slightly better version of mediocre was going to be a winning strategy. [They made] a lot of incremental improvements in the hope they could hold on to what got them to where they were. Having worked at Sears many years ago, I can tell you what got Sears to be the biggest retailer on the planet forty years ago is also the thing that caused them to go away. They stuck to this a-little-bit-of-everything-to-everybody model in a regional mall when the world was changing by virtue of Walmart, Target, and then category killers, like Best Buy and Home Depot, and then off-price [retailers] and then the Internet.
“I think it’s defending that status quo, not being willing or able to take risks more quickly. The pace of change increases, and obviously, COVID took it to a whole new level. You get so far behind [that] you can’t catch up.”