Apparel Stores Can Survive the ‘Retailpocalypse.’ Here’s How Some of Them Are Innovating

80% of purchases happen at brick-and-mortar locations

Last fall, Nordstrom debuted Nordstrom Local, a storefront that carries no inventory, but offers services like alterations and online order pickup.
Nordstrom

The Limited. Wet Seal. Payless ShoeSource. BCBG Max Azria. Claire’s. Nine West. Toys R Us. Brookstone. The list reads like a directory of a mid-aughts shopping center. But in actuality, they’re just a few of the latest casualties of the so-called “retailpocalypse.”

The term might feel hyperbolic, but with new stores frequently announcing closures or bankruptcy filings, the state of the retail industry (particularly the brick-and-mortar brands that once felt like staples) often seems, well, apocalyptic. But according to a June 2018 study of 1,500 people by international management consulting firm Oliver Wyman, the pivot to ecommerce may not be as intense as consumers might assume, particularly in the apparel sector. The study reports that traditional brick-and-mortar stores account for 80 percent of clothing and shoe purchases. This number not only reflects results from past years, but even shows a potential growth in brick-and-mortar shopping—in 2015, a study from Fluent said that 55 percent of people primarily shopped for apparel in-store.

It’s something of a surprising statistic in the age of Amazon, when it seems more and more that ecommerce is king. There are immense benefits to ecommerce, particularly for brands that started as traditional stores—it can reach a new customer, one that isn’t already a regular shopper at a brand’s physical outlets. But to do the opposite—attract digital customers to a store—innovation is key.

Jeremy Sporn, partner at Oliver Wyman and one of the study’s authors, said providing customers with unexpected experiences—even small touches like offering Wi-Fi or coffee in stores—can make them more appealing. Retailers are now armed with a valuable tool to improve in-store experiences: data collected from ecommerce. Brands can identify the demographic info of their primary customers and tailor retail experiences to them. He added that this data helps stores “take a consumer-first lens, rather than lumping all consumers together and creating an offer that is acceptable to all but fantastic to none.”

The Minneapolis-based retailer is rolling out a visual merchandising tool in stores to help consumers add to their apparel purchases with matching items.
Target

Target is keeping its stores current with regular updates, including remodeling, changing the “look and feel” and introducing new, tech-savvy features, according to store spokesperson Joshua Thomas. A recent addition includes a visual merchandising tool that Thomas said will help shoppers find apparel that goes with a particular product they’re eyeing, such as a nail polish in a corresponding hue, or a top that matches the skirt they want to buy. “We see our physical stores as being a key differentiator for us because of the experience we can offer and the fact that we can couple it with a compelling digital experience,” Thomas said.

There’s one key quality that makes purchasing apparel in-store more appealing: It’s easier to gauge in-person if a clothing item is a good purchase. “The ability to touch, to feel, to try on the product, that still remains the No. 1 contributor to this trend,” Nick Drabicky, head of agency strategy at PMG, said. 

All this may help explain why brick-and-mortar stores are still the predominant way that Americans buy clothes and shoes, but then why are so many retailers who carry these products shuttering? Sporn said that it predominantly comes down to store experience. “Successful retailers have made the consumer experience in-store more and more compelling,” he said, adding that innovation can allow brick-and-mortar locations to become brand builders. Sporn cited unexpected and interactive elements, like Nike installing soccer turf and basketball courts in its stores, as prime examples of this trend. 

At Nike’s flagship in New York’s SoHo, shoppers can test out products on an in-store basketball court.
Nike

Bob Phibbs, CEO of consultancy The Retail Doctor, added that customer service has become less of a priority in recent years, which has removed some of the magic of the in-store experience. “People decided they’d rather have no service than bad service,” Phibbs said.

Service is so much a key that Nordstrom has opened a storefront that offers only that. In October 2017, it introduced Nordstrom Local, a no-inventory storefront in West Hollywood, Calif., that instead “provides easy and local access to Nordstrom services such as personal styling, alterations and tailoring, and online order pickup,” according to a spokesperson. The brand has plans to open two more of these locations in the Los Angeles area this fall.

The change we might see going forward, Sporn said, is that retailers will be more deliberate about the stores they open, and focus on both those storefronts and ecommerce. “They may not need these big stores,” he said. “They can do better with smaller stores and a strong online presence.”

By that logic, brick and mortar is here to stay. And perhaps, it’s on its way to being better—if a bit more streamlined—than ever before.

This story first appeared in the September 3, 2018, issue of Adweek magazine. Click here to subscribe.

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