ISSUE NO. 65 06/06/12

Predictions of retailers meeting their demise in the face of growing online commerce have been much exaggerated, reports Reuters, though it is true that brick-and-mortar stores do need to find new ways of serving shoppers to avoid the fate of chains like Circuit City, Linens N' Things and others. The key, according to Morningstar analyst Paul Swinand, is to identify services that can't be duplicated by online retailers. "People are trying to think up stuff you can't download," Swinand said. Indeed, if retailers aren't experimenting," said Wendy Liebmann, CEO of WSL Strategic, "then they are doomed to fail."

A handful of retailers have come up with notable efforts, including PetSmart's doubling of the number of its "dog-hotels" from 200 to 400. The chain's kennel-type service in which dog owners are able to leave their pets overnight is one way to defend against and other competitors. Macy's "virtual concierge" kiosk is another interesting in-store service that the retailer is counting on to appeal to its shoppers.
Other retailers are expanding their offerings and expanding their footprints. Coach, traditionally a women's handbag retailer, is pumping up its men's offerings. As many as 100 of its stores will now offer men's wallets and travel bags, up from 42 last quarter, a move that project CEO Lew Frankfort told Reuters last month was its "most important initiative." Both Michaels, the arts and crafts chain, and Family Dollar are looking to add around 400 stores in the coming year. Family Dollar is also remodeling current stores and adding more food items.
Another notable effort to distinguish the shopping experience comes from C. Wonder, a newly launched retailer of women's apparel, shoes, jewelry and accessories, housewares and home décor. The trendy boutique features deluxe, spacious fitting rooms with velvet curtains and the ability to customize lighting and music. Shoppers are also able to request assistance from a sales associate at the touch of a button. "It's supposed to be an experience. We're revolutionizing shopping," Elissa Sutton, manager of the Paramus C. Wonder store, told the New Jersey Record.

If necessity is the mother of invention, then ecommerce is the father of the rejuvenated retail scene. Retailers are going to great lengths to differentiate their in-store shopping experiences including some fairly outlandish initiatives like C. Wonder's dressing rooms as well as more tame efforts like Coach's product line expansion. Whether your retail partners are of the outlandish or the tame variety, this time of heightened competition spells opportunity for manufacturers able to meet their retailers with interesting ideas that dovetail with the retailers' goals.

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"Expanding or Not, U.S. Retailers Rethink Stores," Reuters, 5/21/12

Retail dressing rooms offering a customized experience," North Jersey The Record, 1/30/12
C Wonder, Coach, Family Dollar, retail landscape

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