[ad_1]
To receive the Vogue Business newsletter, sign up here.
In the face of a tough year, retail has been forced to evolve online and off.
Bricks-and-mortar multi-brand retailers are already up against competition from e-commerce natives, high acquisition costs, unpredictable inventory and demand, and difficult profit targets. Now, they’re also dealing with volatile consumer behaviour, as higher interest rates, raised inflation, rising energy bills and expectations of a recession have made shoppers less confident about the state of the economy. At the same time, online luxury retailers that saw a burst in sales during the pandemic are facing consolidation and a plateauing, meaning a rethink in strategy.
Despite the challenges, what’s clear is that physical stores are making a gradual comeback. Through the first six months of 2022, major US retailers announced 4,329 openings, an increase of 1.9 per cent compared to the same period in 2021, while there were 1,912 announced US store closures, 58.1 per cent less than the same time last year, according to the most recent data available from Coresight Research. Overall, retail sales in June were up 8.4 per cent year-over-year and 18 per cent higher than pre-pandemic, the US Commerce Department said.
The formula for brick-and-mortar retail has evolved since the pandemic. Not only have customer expectations heightened since experiencing the ease and flexibility that comes with online shopping, they also need enticing back. Retailers are having to work harder than ever before, says Doug Stephens, founder of consultancy Retail Prophet. “Brands that can provide a fundamentally more entertaining experience to fashion consumers are going to be responded to favourably.”
Bigger brands, bigger experiences
This year, retailers upped their game to get people into stores. One of the biggest luxury retail projects of the year was Dior’s whole-store takeover of Harrods, which runs from December to January. With a café, immersive exhibition, two pop-up shops and window displays, it marks Harrods’s biggest brand takeover to date, according to partnerships director Alex Unitt. As the initiative still has another four weeks to go, he’s reluctant to share footfall or sales metrics, but the response so far has been overwhelmingly positive, he says. “I think the multifaceted nature of the project means there is broad appeal and something for everyone to enjoy.”
[ad_2]
Source link
