• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Blogs » Think Tank » Online and In-Store, Retailers Must Adapt to New Shopping Trends

Think Tank
Think Tank RSS FeedRSS

Apparel / Consumer Packaged Goods / E-Commerce/Omni-Channel / Retail

Online and In-Store, Retailers Must Adapt to New Shopping Trends

Online and In-Store, Retailers Must Adapt to New Shopping Trends
July 8, 2019
Robert J. Bowman, SupplyChainBrain

What many economists view as a growing gap between rich and poor in America is being reflected in online retailing trends.

Just as the middle class finds its fortunes dwindling, forcing members either upward or downward on the economic scale, traditional mid-tier department stores such as Sears and J.C. Penney are struggling to survive. What’s left are purveyors of luxury goods and discount chains.

A similar dynamic is emerging online. Both upscale and bargain stores are boosting their internet presence, according to Jose Mendoza, assistant professor of marketing at Sacred Heart University.

High-end merchandisers are selling on the internet but maintaining physical stores as a place to display their wares. “What they’re doing is using their stores as a showroom — a way for you to try before buying, and to have a sort of experience,” Mendoza says. Examples include Tesla electric cars, Peloton exercise bikes, Casper mattresses and Canada Goose outwear. In the case of the last, cold rooms allow shoppers to test the comfort and effectiveness of jackets before purchasing them online.

The idea is to make the physical store as small as possible — just large enough to give the shopper hands-on access to the product. The same locations can also serve as pickup points for online purchases, allowing sellers to minimize their investment in pricey retail real estate.

The presence of discounters on the internet is growing, although problematic. The issue is the cost of shipping, which represents a large percentage of the total purchase price (and might in some cases exceed it). Amazon, for one, is seeking to drive down the cost of shipping low-margin items by developing its own delivery fleet. Another possible solution is the imposition of annual membership fees, which grant buyers a lower shipping price. In addition, says Mendoza, third parties might offer the opportunity to deliver for less based on volume economies, provided they can squeeze out a margin for their services.

The real crisis in retailing, however, is occurring among mainstream, mid-priced chains. Consumers are abandoning traditional department stores in favor of specialty discounters like Marshalls and T.J. Maxx. Also continuing to thrive (although coming under heavy competitive pressure from Amazon and other e-tailers) are the big-box giants such as Walmart and Costco.

Shoppers want a combination of physical stores and online presence. “If they don’t get convenience, then price is going to be the determining factor,” says Mendoza. “[Retailers] in the middle don’t have a huge footprint.”

As economic disparity in the U.S. widens, is there a place for the mid-tier retailer? Mendoza believes that entity must take dramatic action in order to stay relevant.

The first step is to base the location and footprint of each store strictly on its degree of profitability. Relatively strong stores can’t accord to subsidize weaker ones, Mendoza says.

In addition, retailers must emphasize “experiential” shopping. Mendoza cites the example of Nordstrom, whose Trunk Club gives shoppers a virtual experience of the product. It also pairs them with stylists who can advise buyers based on their personal needs.

A key trend in modern-day retailing is the blurring of the line between online and physical stores, Mendoza notes. Regular stores can draw on tools such as image recognition and the Internet of Things to match the variety and novelty of online offerings. As far as the retailer is concerned, “it doesn’t matter where the customer buys, as long as it’s from that company.”

Retailers must also be cognizant of a broader trend: the end of the big shopping mall as a social nexus. The younger generation doesn’t view malls as destinations for hanging out. They prefer to target specific stores and purchases, or do their shopping online. As a result, big “anchor” stores are shutting down at a rapid rate, dooming the mall concept. Asks Mendoza: “If you don’t have the foot traffic, how do you justify the stores?”

Mendoza sees a continuing opportunity for discount retailers, and recommends that sellers of food and groceries adapt the IKEA format of physical stores, combining wide selection with low prices.

“Online is here to stay,” he says, “but we’re human beings. We want to go outside. And some products need to be tried before you buy. So there’s an opportunity to become an experiential store.”

RELATED CONTENT

RELATED VIDEOS

Wake up to live
“Supply Chains in Crisis”
updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • coworkers collaborate

    Podcast | Linking Planning and Execution for Real-Time Decision-Making

    Sales & Operations Planning
  • FedEx

    FedEx Faces Big Changes as New Boss Confronts Higher Costs, Angry Contractors

    Last Mile Delivery
  • 0621_Burrito.png

    Chipotle Zeroes in on Supply Chain Traceability and Visibility

    Sourcing/Procurement/SRM
  • cyber crime

    The Cyber Blind Spot That Makes Every Supply Chain Vulnerable

    Regulation & Compliance
  • 0627_Guitars.png

    Sweetwater Responds to the ‘New Face of Agility’ in Supply Chain and Merchandising

    Inventory Planning/ Optimization

Digital Edition

Scb may 2022 sm

2022 Supply Chain ESG Guide

VIEW THE LATEST ISSUE

Case Studies

  • 3PL Doubles Productivity With Robots to Fulfill Medical Supply Orders

  • E-Commerce Company Cuts Order Fulfillment Time by 40%

  • Fashion Retailer Halves Fulfillment Time With Omichannel Automation

  • Distributor Scales Business by Integrating Warehouse Automaton Software

  • Fast-Growing Fashion Brand Scales E-Commerce Fulfillment With Whiplash

Visit Our Sponsors

Yang Ming Alithya Barcoding
Blue Yonder BNSF Logistics Generix
GEP GreyOrange Here
Honeywell Intelligrated IFM Inmar
Keelvar Kinaxis Korber
Liberty SBF Locus Robotics Logility
Lucas Systems Nvidia Old Dominion
ORTEC Parsyl QIMA
Redwood Logistics Saddle Creek Logistics Schneider Dedicated
Setlog Holding AG Ship4WD Shipwell
Tecsys TGW Systems Thomson Reuters
Tive Trailer Bridge Vecna Robotics
Verity
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2022 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing