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Brick-and-mortar stores try to lure shoppers with service | @adetem #distribution

DAILY HERALD | 12/04/2016




ALEXANDRIA, Va. -- Outside a Best Buy store in suburban Washington, a throng of shoppers lined up early to pounce on the annual parade of Thanksgiving "doorbuster" deals that have come to mark the start of the holiday shopping season.

But this year, the once-chaotic ritual had layers of efficiency: Shoppers got color-coded tickets guaranteeing they would receive the laptop or 4K television they came for. The entryway doors were opened just partway so customers had to enter single file instead of in a stampede.

It was all aimed at making a harried experience go more smoothly. And between now and Christmas, some of the biggest names in retail are taking their own new steps to ease the hassles of shopping in an actual store.

Their attempts come as the shopping industry undergoes a massive upheaval that extends far beyond the rise of online merchants like Amazon.com. Now, newcomers offering a more high-touch, boutique-like feel -- such as Bonobos or Warby Parker -- have begun to gobble up serious market share. According to Deloitte, small- and mid-size retailers have grabbed $200 billion in annual sales from the big guys over the past five years.

For 100 years, we've consolidated the industry," said Rod Sides, the leader of Deloitte's retail practice. "Now, the fragmentation we've found in the last four years has been blowing that up."

To fight for shopping dollars in this fast-changing climate, Walmart, for example, is adding a dedicated squad of yellow-vest-wearing "holiday helpers" to direct people to open registers or run back into the aisles to grab items that shoppers might have forgotten. Kohl's is trying to speed up its "buy online, pick up in store" program by adding more store staffers focused on gathering the orders. In 1,500 Target stores, tech experts have been trained to help customers with a wider array of personal electronics questions.

As the nation's annual gift-buying spree gets underway, it appears likely that the winners and losers among retailers will be those who execute best on delivering a satisfying shopping experience -- a challenge that depends on managing the complex interplay of supply-chain gymnastics, merchandise assortment and customer service.

Those that fail certainly won't have the economy to blame for their woes. Gas and food prices are low. So is the unemployment rate. Consumer confidence is relatively high; the stock markets are humming. And while the roller-coaster presidential campaign once created a distraction from the seasonal shopping blitz, experts expect shoppers to snap into high gear.

Ino Medrano of Richmond, Virginia, was ready. He is a regular Black Friday shopper, the kind of seasoned participant who was camped outside the Best Buy on Thursday with a huge umbrella and a folding chair. As he waited on line to nab two big-screen TVs, he said the vibe at these events is a lot different these days.

"The first year, it was crazy. Now it's really, really organized,' Medrano said. "It's kind of calm quiet, and you don't have to mess with a bunch of people trying to run to get into the store."

He said he'll probably end up spending about $100 more this year, simply because the scene is not so stressful. Earlier on Thursday, at Kmart's pre-dawn Black Friday kickoff event, LaNessa Ferguson was on the hunt for two swimsuit-wearing Ken dolls to pair with the Barbies she picked up for her 4-year-old granddaughters. A sales associate was by her side, sales circular in hand, scouring the aisle for the right doll -- the one on sale for $2.99. The employee disappeared to another aisle for a moment, and then came back, Ken in hand, declaring, "We hunted him down!"

Ferguson, a resident of Fort Washington, Maryland, said that this kind of service is what makes it worthwhile to make the trip to Kmart. "It's really important, especially during this shopping time, Black Friday. Normally, it's packed, busy, everything is moved, you can't find everything," Ferguson said. "I will definitely come back -- and I won't have a problem asking somebody for help."

Such kudos are music to the ears of behemoth retailers struggling to stay relevant at a moment when many shoppers are gravitating toward a new breed of stores that are highly service-oriented or have focused obsessively on delivering high quality in a niche product.

Rent the Runway, a store that allows women to borrow designer clothes, employs a team of stylists to consult with shoppers about their every purchase -- both in-store and online.

Men's apparel upstart Bonobos, too, has a team of "ninjas" that help with online customer service. These employees are not assigned to some distant call center; they sit right in company headquarters so they can give executives real-time feedback if, say, people are reporting some garment is sized oddly or is tearing at the knee.

And in their stores, Bonobos employees are charged with providing one-on-one service to all comers.

"They have the ability to really guide you and talk to you about what you're looking for in your wardrobe," said Erin Grant, a spokeswoman for Bonobos. "Are you looking for something specific? Or are you looking to refresh your whole wardrobe?"

It's not just personal service that is putting pressure on the big-boxers. They are also challenged by the fact that many newer chains offer a highly curated assortment of goods that feels unique from what might be found at a typical department store. There's Shinola, the Detroit-based watch and bicycle maker; Aesop, the Australian skin-care outpost; and clothing and accessories players such as Marine Layer and Cuyana.

These stores perhaps have hit the same nerve that craft beer and locally sourced food have: Consumers seem to like the idea of spending on small-batch goods that feel a bit more specialized, more one-of-a-kind.

So, in addition to convenience and service improvements, big-box retailers are looking for ways to turn a trip to a shopping center into more than just an errand.

Toys R Us, for example, held in-store demonstrations this month of toys such as Nerf blasters and the Paw Patrol Zoomer Marshall, a walking-and-talking robotic pup. The chain also plans Santa meet-and-greets at 100 of its locations in coming weeks.

"We feel strongly that we want our stores to be more interesting, more interactive and really kind of feed this notion of experiential retailing," said Dave Brandon, chief executive of Toys R Us, in an interview. "We're really working hard to transform our stores to a very different feel, much higher energy."

Indeed, legacy retailers have every reason to pull out all the stops to get people to set foot in their stores. Store traffic has been down in every month so far this year, according to RetailNext, an in-store analytics firm.

The decline comes as many consumers have chosen to spend their money on things such as vacations and dining out.

And then there's Amazon, whose threat is only getting more formidable. In the third quarter alone, the company added 18 more fulfillment centers for picking and packing a growing crush of online orders.

Amazon's dominance comes into sharp relief during the holiday season. Last November and December, for example, an astonishing 40 percent of all online sales were at Amazon, according to research by Slice Intelligence. That was up from 37.1 percent during the same period in 2014. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)

To fend off that challenge, old-school retailers will need plenty of shoppers like Tracie Shepherd, a Temple Hills, Maryland, resident who stacked her shopping cart high at Kmart with fleece throw blankets, king-size sheets and washcloth sets. Shepherd said she prefers in-store shopping because she likes to be able to pick up items to see them for herself.

And during Black Friday sales, the festive atmosphere doesn't hurt either.

"It's exciting to me," Shepherd said before darting off to buy slippers and a sweatshirt. "It's like my cardio."

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