Is retail dead? Will Amazon crush everyone?
No, according to industry executives—not if retailers remember what customers want and what makes them special.
Consider the lowly dressing room at an apparel store. Most make you feel terrible—the mirror is warped, the lighting is no different than that of a prison, and at forward-thinking retailers, the gadgetry gets in the way of good time.
“I feel like apparel retail shopping is really broken,” said Yael Aflalo, founder and CEO of Reformation, during a panel discussion moderated by CNBC’s Julia Boorstin at the Vanity Fair New Establishment Summit in Los Angeles. “A lot of technology that’s been implemented in stores is just razzle-dazzle. A lot of people are offering smart mirrors and a lot of people want dumb, flattering mirrors.”
We know that people love the specificity of information you can get online. Why can’t you achieve that at a bricks-and-mortar store? “How do you make a high-volume store experience high-end?” Aflalo mused.
Daniella Vitale, CEO of Barneys New York, said it’s a matter of taking a holistic approach. “We’re not in the business of just retail anymore,” she said. “We’re in the business of entertainment, service, hospitality, personalization, food even…it really needs to be a different kind of experience now, and that’s something I think is lost on our entire industry.”
Bricks and mortar is not dead—“it’s quite alive,” Vitale insisted—but customers need a reason to cross the threshold of a physical retail store. “We need to become a much-more data driven company,” she said. “We think we know what’s best for our customer but we have so much data” to better inform our decisions. In other words: personalization. “It’s a very show-me, know-me culture right now,” she said. “Amazon is Amazon, but that one-on one-relationship we have” is going to help retailers survive. Don’t sell a pair of black jeans to someone who just bought them—sell them a complementary white t-shirt instead. “The retention piece is the most important for us,” Vitale said.
Calvin McDonald, president and CEO of Sephora Americas, agreed. “If you are stuck in a transactional relationship with your clients you are going to get eaten up by Amazon and other companies easily,” he said. An emotional connection will help the retailer resist being a commodity. “If you can answer that statement, there’s purpose for your physical location,” he said. “If you can’t, you’re in trouble.”