Love them or loathe them, retailers can’t live without stores

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Brought to you by Retail Insider and K3 Retail

Talk about a polarised view – the physical store seems to either be a millstone around the neck of some retailers whereas for others with a predominantly online presence there is desperation to get some exposure to good old bricks and mortar.

Amazon seems to be on the cusp of opening convenience stores – up to 2,000 of them apparently. They would stock a modest assortment of items but the real imperative behind such outlets is for them to be used as places to order and pick-up goods. These stores would be in addition to its bookstores and the pop-ups it is currently operating.

It has run a couple of book stores in a trial and has since confirmed its intention to open more of them around the US. Again, it is not just about flogging goods in the traditional retail sense but is more about using the insight it gains from the shops to influence how it develops its overall business – both online and physically.

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Amazon is built on data and the insight it gains from shoppers’ behaviour in these physical units is massively valuable to the business. When talking about the book shops Amazon founder Jeff Bezos stated: “In these early days it’s all about learning, rather than trying to earn a lot of revenue.”

We also have Missguided in the UK opening stores and myriad other online-only players looking to add bricks and mortar to their virtual business models – because that’s the way people like to shop today.

Contrast this position with that of the established store-based retailers who can’t shed stores quick enough. Recent data from PwC and the Local Data Company showed 15 stores a day closed in the first half of the year in the UK. Some of these will sadly be a result of failed businesses but many will be part of the rationalisation programmes being implemented by the big chains.

Take Marks & Spencer – it is among the many big retailers that are seriously over-shopped and is in need of reducing its store count. When analysts Bernstein recently surveyed retail investors about M&S they suggested it needed to kick-start some “radical initiatives”, which for some included “shrinking clothing store space by 50%” and 64% of the investors want store closures.

M&S is certainly not alone in facing the problem of having to deal with far too many stores, just as other retailers are in the complete opposite position of desperately needing to get their hands on stores.

Glynn Davis, editor of Retail Insider

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.

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