Retail Radar: 16-Jan-2024

Welcome to "Retail Radar," your weekly insights offering innovative solutions and forward-thinking strategies to navigate the dynamic retail landscape, helping you lead effectively and stay ahead in an ever-changing market.

Top of Mind

Returns are a $1,000 B problem in retail, which has escalated to 16.5% of total purchases.

This trend is particularly pronounced in online shopping, where easy return policies have become the norm. The article evaluates the effectiveness of AI-based tools, like Amazon's "Fit Insights Tool," designed to tackle common issues such as sizing discrepancies.

Several strategies are proposed to address this costly problem: utilizing physical stores for processing returns, introducing convenient locker systems for returns, offering instant store credit via digital wallets to motivate re-spending, and leveraging AI to analyze return data thoroughly.

This data can then improve inventory management and enhance sizing accuracy. The suggested solutions aim to mitigate the financial burden of returns, increase customer satisfaction, and streamline retail operations. The article underscores the need for innovative approaches in tackling the complex challenges posed by product returns in the retail sector.

Why 1,000 Billion? Because managing a trillion dollars is an unbelievably large number, even in today’s economy.

Tech Spotlight

Smart-er Omnichannel

In 2024, we are witnessing a transformative blend of digital and physical retail experiences.

Smart Shopping Baskets, cloud-based and accessible across all brand channels, are revolutionizing customers' shopping. These baskets, along with Omnichannel Customer Profiles, enrich the shopping experience. Each customer interaction, whether online or in-store, enhances their profile, allowing for a seamless, personalized shopping journey.

Customers can curate their smart baskets from any channel, storing favorite items and recommendations. This flexibility culminates in a seamless journey: for example, a customer might add an outfit to their basket via a mobile app, try it on in-store, then complete the purchase online.

This approach maximizes sales opportunities and builds a comprehensive understanding of individual customer preferences. This 360-degree view is invaluable for personalized retargeting, ensuring that every customer interaction is informed, relevant, and engaging, ultimately driving sales and customer loyalty in a retail landscape where the lines between physical and digital are increasingly blurred.

I’ve dubbed the blending of e-commerce and physical locations humnlss.

Link 🔗

The Disruptors

Retail exits the mall, stage left. 350 Gap stores will have closed by early 2024, and the trend continues.

The retail landscape has significantly shifted in recent years as many retailers are moving away from traditional mall settings.

Traditional malls have relied heavily on anchor tenants like Sears, JCPenny, and Macy’s to drive foot traffic. However, these anchors have faced financial struggles, leading to store closures and, consequently, a decline in mall traffic. For example, Sears, which had 863 mall-based stores in 2000, has dramatically reduced its presence. The decline of department stores, a key component of malls, has significantly impacted the viability of malls.

Consumer preferences brought on by several factors, including technology, are taking them outside the mall. This shift is forcing malls to rethink their tenant mix, moving towards a greater variety of offerings like food halls, local chefs, and premium coffee shops. Additionally, malls are transforming into mixed-use spaces, combining retail with residential buildings to increase foot traffic and adapt to the needs of a more home-centric workforce. Stores become a point of destination.

Retailers like Gap are increasingly favoring off-mall locations. These locations offer lower rents and proximity to consumers, making them more economically viable. Retailers like Macy’s, Victoria’s Secret, and Foot Locker are also moving towards off-mall locations due to better foot traffic and economic models than traditional malls.

The store becomes a product as a point of destination for consumers where they can do pickups and returns and participate in the developed ecosystem for some retailers.

At least we still have Atomic Fireballs.

Ferrara Candy Company announced last week the discontinuation of the Fruit Stripe gum line. A bit of nostalgia, the gum has changed hands and been produced since 1969.

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Onward.