Do we even need those stupid physical buildings?
( THE ANSWER IS YES DINGUS)
Disclaimer: As a designer I try to analyze flaws and opportunities in our world. While I'm not an expert in technological security or cryptography, let's still discuss it from a design standpoint. 🙂
Remember the good ole days? When you could go to the local mall and see all the shiny trinkets or gadgets featured everywhere? Play all the Playstation demos at GameStop till the clerk asks you to stop? Cry when your mom refuses to buy you a kids meal so you hatch a master plan to make them miserable? Hide in-between the circular racks surrounded by clothes to freak your parents out from lack of kid's meal toy ? Wait, that's my childhood. It also doesn't necessarily make it the "good ole" part any more true in any way either. In fact, now as an adult I can technically browse every freakin' item in existence, play all PS demos at my leisure, and order food straight to my door. Maybe even get someone to feed it to me from Craigslist.
This is mainly through the wonders of e-commerce and the huge leaps in advancements of the Internet. And though this shift is undoubtedly killing off smaller mom-and-pop shops and niche item stores, people will still almost indefinitely want to physically view or experience things in person. New EV car shopping folks will want to test drive a new Tesla. Fashionable peeps may want to see how clothes will fit in-person and don't trust online pictures. Grocery stores give people a chance to see their produce and discover new tasty treats. Pretty much any one I ask about the subject has some form of personal need, that makes physical stores a requirement in their lifestyle. Like my female friend fervently notes that it is ABSOLUTELY necessary to go to a make-up store in-person because foundation oxides and changes the color of your skin in a way that...I really don't care about AT ALL (Sorry Jane).
Does it matter than physical stores are closing down?
I mean, it really comes down to the who's asking right?? If there is a need somewhere, it probably going to be fulfilled by someone. I personally don't care that stores are being whittled down because of the our increasing e-commerce/delivery services still going strong and are getting better as more options and development become available.
However, to some consumers - they do like going out to a location so they can tangibly experience whatever they're about to bring into their life. Not to mention, if you're a company yourself that manages a physical location yourself, it would generally be in your best interest to continue staying open to protect your investments and not have to enter liquidation-mania.
So what's the issue really? There isn't necessarily any deep-set concern for the average consumer that lives in a suburban area due to all the choices we have available. So if there is a dilemma, it will probably lie with the merchandisers, services, and companies in general.
What is the data on how many physical stores are closing?
At the time of writing, COVID-19 has already ravaged the retail landscape in more ways than one. It's something that I'm sure everyone has had felt the gravity of no matter who you are or where you live. A recent Forbes article stated that 14,000 stores have already been closed due to bankruptcy and lack of revenue, which surely were partially a result from the government shutdown and pandemic regulations.
However, this huge number of store closures wasn't something that was recently born from the emergence of the novel coronavirus. This eradication of physical stores has been something that has been noted for a while - Retail Apocalypse - as this rise is aptly nicknamed has been looming around since 2010. Even last year, a 2019 UBS report stated that up to 75,000 retails stores (excluding grocery) could close down by 2026 if e-commerce reaches 25% of overall retail sales (16% at the time of the report). So that means, with 14,000 physical stores already closed in 2020, we're already roughly 20% there from the target of 75,000 in 2026.
What are people currently doing to prevent the closure of their stores?
That's a pretty lengthy question to answer but in most situations, people are adopting a stronger e-commerce presence to supplement their physical location. In some cases, people are even using the closure of their stores as an actual strategy to save their business by gutting overhead and saving resources to apply elsewhere (mostly online). They take this indication as a time to pivot rather than let themselves get eaten by stagnation. By adopting what is currently in-trend and moving towards new directions, these companies can live another day *on the internet*.
On the other hand, some companies might actually double down on their physical stores, like Target. Instead of trying to scramble to get rid of all their failing stores in 2017, they went balls-to-the-wall with a $7 billion dollar investment to remodel them and add private-label brands to their selection. And while this was considered the right move with positive earnings in 2019, who knows how they'll fare in 2020. It should be obvious that there is no magic formula to keep your store open.
So why bother at all finding a solution if most stores are going to close down then?
Well, I personally would love to look into solutions because there is a shift happening - and with most shifts, there is always some form of opportunity (that may or may not be apparent). I also do enjoy physical stores to some extent, there are definitely benefits to physical stores for consumers and sellers:
• Actually being able to see and experience something in person
• Having the opportunity of getting and giving instant gratification
• Being able to speak to a real person and an opportunity to sell
• Finding out additional products or services that you otherwise may have missed
• Building community in some way
• Provide convenience and security without having to worry about shipping incidents
If Darwinism applies to companies and brands - which it most almost certainly does, then the strongest ones will survive by due process. Yet this doesn't mean that we can't give an assist to others that are struggling - sometimes companies are worth investing in but just don't have the capability or landscape to continue on. It doesn't mean that their product or service is unworthy, this rings especially true in 2020 because in some cases the market is flooded with new offerings everyday.
So as designers how do we innovate for keeping physical stores afloat?
I don't want to say that there is a neatly laid-out solution because solutions should definitely be made on a goal/case-to-case basis but there are some basic avenues to consider. Aligning with the reasons I listed above that are common points of interest for people to visit your store - how can you build on these existing benefits and increase their value? Is there anything that makes it a NECESSITY to go to a particular store? Why does anyone HAVE TO enter your store? How do we create desire for your product or store?
Though as a UX/UI designer, I can't but help point out the obvious solution that comes to mind is creating an app for your company or store that has all the benefits of what you would currently have access to such as viewing inventory selection, keeping points, managing your account, offering special deals, all that good stuff. Cool, so why aren't we tying these fantastic features to the actual act of going into the store? It seems like the obvious choice is to coerce and force people into your store by making these same features but with the condition of HAVING to enter the store.
"Money is catching up to the technological trends transforming all aspects of society and business; entertainment, insurance, health-care, gaming, leisure, retail - all commercial and social verticals are going digital - including money itself."
Max Keiser, Economic Journalist and Broadcaster
Some app ideas that would help herd some people into your store location :
• Create desired app features that are only be usable by being physically your store
• If you have a reward system, tie into being having to go into your store
• Special deals that will be only available when you go to the store
• Create exclusivity to items that are only available for purchase in your store
Hold on a second my fellow readers, I hear some distant naysayers...
"But Zack! People will just go to the store for the good stuff and then leave!"
Sure? I guess? That might not always be the case though? If you've made an effort to go out and visit the store then the chances are you might linger around or see what else is available. I don't really know or care because it depends on the person but the goal of having someone come to your store is
"But Zack! Users want convenience of delivery and some people might not be available to go to the store!"
Yeah, every consumer has different desires but that will always be the case despite every circumstance. It's not a fair world and never has been. That's a completely different problem that is being considered which is trying to be as fair as possible.
What else can we do to keep physical stores afloat or thriving?
Having a store able to continue to open its doors really only has one practical solution - more revenue. Input a stream of money and the fun continues on. This can obviously come in the form of additional income or reduced resources. Which eventually comes to targeting some area of improvement in the entire sales process or offerings by improving value to the end-user.
In a similar fashion, how can you improve any one of your process? Are there technological advancements that could take the burden off of your employees to make time/room for other areas of focus? Is there a better way to do things that you can adopt from another company?
Finally - maybe less of a design aspect but is there a possibility of collaborative effort or a partnership of some kind with another company? I think this is one of the more under-looked avenues that companies are not willing to take, possibly out of a fear of losing control or resources. Yet when resources are combined, it technically gives you a double net increase in almost every aspect and can prove to add something for the end-user. I'm not saying that the people who thought of combining a Pizza Hut and Taco Bell together are geniuses but they're certainly providing an improved value for their location.
Here are some considerations for increasing value, improving foot traffic, or reducing overhead :
• Look for technological breakthrough that would streamline one of your processes? Automation?
• Exclusive offerings that will be only available when you visit in-person and not online
• Improve the design or experience of your physical location through store or employee improvements
• Collaborate or partner with another company for an event or launch
So I'm sure there's lots of tiny ways you can make physical stores more appealing, through improving your design, following trends, and more. Or simply be a prime zombie apocalypse bunker (Hello, Costco/Wal-Marts/Target) by having loads of essentials - seems to be working for them. However, with this retail "apocalypse", if businesses want to survive it, they can't continue employing the same tactics and expecting the same outcome. It's really coming to a time where innovation or change will bring about the most impact.
The solution for every business should obviously be different and suited towards their particular needs. Some cases might be able to create scarcity in this abundant world. It's almost like we can go back in time and reverse engineer convenience and make it conditionally "inconvenient" for the user to get what they want. Apple might not need to employ this type of tactic but maybe another company would benefit from exclusivity. I don't even know what I'm talking about anymore.
When asked by my peers on why I'm writing this piece, I really didn't have a good answer of why I felt this was important to me. I think somewhere in the back of my mind, there are so many people who have great products but don't have a platform or way to show off their offerings.
Maybe it's the timing of Covid-19 and the complete lack of being able to go to where people aren't able to go anywhere and imagining the aftermath of the massive closure of physical stores this whole panic has caused. I just want things to go back to normal :( As I'm sure everyone does.
Either way, thank you for reading my first blog post and would love to hear your comments, concerns, or thoughts via my Twitter account.
Happy and stressful designing!