Is retail dead? No, but brands must prioritize connection over transaction.
In 2017, Ralph Lauren closed its New York City flagship locale in a drive to gain footing in a rapidly changing retail world. Then, in 2021, the fashion giant announced it was cutting 10 more retail locations globally.
The Detroit Newsonce said it was "a symbol of old-fashioned luxury that no longer resonates with today's shopper."
I disagree.
I don't think the clothes are the problem with Ralph Lauren (or any luxury brand).
I mean, have you been in a Ralph Lauren store lately?
The customer service isn't exactly exceptional. And without exceptional service, the best merchandise sits.
Even Ralph Lauren's.
Ralph Lauren isn't the only brand closing stores. Does that mean brick-and-mortar retail is dead?
The answer is still no —, and it doesn't have to be your store that closes. Let me explain ...
When was the last time you shopped at Nordstrom?
One of my last customer service experiences there wasn't great — certainly not exceptional. Here's what surprised me most:
After I wrote about Nordstrom’s problems, I received a call from some of their executives. They told me I was right. These higher-ups already knew they were making customer service mistakes.
Do you know what they said next?
“We can only fix the issue on our own.”
Right ... they can fix it on their own while everyone is asking, “Is retail dead?”
I’ll tell you this: less help on the sales floor due to retail associate layoffs, and the Great Resignation is not the solution to your customer service woes.
It's not just Nordstrom. The retail world is on fire — and not in a good way.
Rue21’s 1,000 stores were purchased by private equity for a billion dollars. A few years later, they filed for bankruptcy.
Other retailers, mired with debt, can't throw off enough cash to service their hedge fund owners' debts.
Weaker demand and falling traffic levels for the past few years have led to a reduced budget for the workforce. As malls lose tenants, the stores that remain worry about higher rents.
All this while we keep hearing the future of retail is online, where no one wants or needs help. That we can and will make all buying decisions via our smartphones.
Here’s the thing:
I'm old enough to remember the start of the Rust Belt, named for the many machines that grew rusty due to inaction. This was a time when countless American jobs moved offshore.
Good-paying jobs evaporated. Deindustrialization decimated entire swaths of Pennsylvania, Ohio, and Michigan.
Most of these jobs never returned. The few that did use more automation and robots than hard-working Americans.
Now we are in the throes of the ghost malling of America. Stores designed to run on 10 employees frequently run on shifts of one or two. And they’re responsible for packing online orders as well!
It’s hardly any wonder that people keep asking why retail is dying ...
Now for the good news:
The retail shakeout will continue, but it doesn't have to be your store that suffers.
You can fend off a closing store. The secret to brick-and-mortar retail success is to proactively rebuild your business from the bottom up through the lens of your customer.
In other words, retailers must prioritize customer connections over transactions.
I don’t mean adding a floor kiosk, installing a robot playing YouTube videos, or convincing customers to strap on virtual reality headsets.
Shiny objects are distractions. And even cool distractions aren't enough to move the retail sales needle. Instead, you must improve the customer experience in your store.
You'll stop asking, "Is retail dead?" and start seeing improved revenue instead.
I want you to remember this:
Your customers care more about the shopping experience than the products or luxury brands you carry.
Otherwise, they would have purchased online, second-hand, or rented the item.
This is where your brick-and-mortar retail store has an essential advantage over other businesses: each customer who walks through your door is an opportunity to start over — a new chance to provide a five-star customer experience.
Now, I know it's hard work to manage staff authenticity.
How do you get your employees to open their hearts to another individual? How do you get customers to go beyond browsing and try something new?
Here’s a tip:
Start listening to customers. Encourage your staff to play the role of personal consultant. They're not just selling an item; they're creating a bespoke experience for your customers.
The product is just a souvenir of an outstanding shopping experience.
Foster human connection the moment a person walks into your store, and the customer will feel the difference.
Now for the tricky part ...
Your retail store is probably providing an average experience — at best. You still do curbside, so what? You have an omnichannel approach to retail, so what? You have employees who can ring up purchases on a tablet, so what?
Those are table stakes.
I know you have pride in your customer service, but is this your perspective or that of your customers?
Maybe you’ve had the same employees for 15 or 20 years. Well, employee loyalty could be your Achilles’ heel. Your staff hasn't changed, and neither have you.
I once spoke at a retail industry gathering. At the event’s close, a well-groomed, older gentleman approached me and said:
"I haven't had to manage my business for the past 27 years — it just runs itself."
I replied, "Oh, so you didn't agree with what I said this morning ..."
"NO," he interrupted. "I've been kidding myself. Thanks for kicking me in the butt. I now see we have to change."
Why are brick-and-mortar stores closing? Because staff are stuck in their ways. They aren't providing an interpersonal experience. Managers have become task managers moving merchandise, shipping merchandise, and trying to keep up with demands from the home office.
No wonder so many people are looking for other jobs in 2021...
For many brands, store closures are inevitable. It's part of the business life cycle — someone gets an idea, builds products they love, creates a brand, and finds a killer location. They share their passion and add locations.
As time goes on, they build levels of management and get further from their passion. Without a strong vision, the brand falls back on discounts, stops innovating, and loses its best employees. Those brands inevitably die. But that doesn't have to be you.
I know the hiring process is hard work. You're responsible for a lot! Things like:
However, if you aren't picky about who you put on your sales floor, you risk ruining the entire customer experience — suffering an Achilles’ heel flare-up, if you will. And I don’t want you debating “is retail dead?” anymore.
Instead, invest time and money into the right people. You'll get employees who embody high customer service standards and drive increased sales and profit.
You build up your people, and they build up your business.
Not sure where to start? Check out my guide to retail employee training.
When you invest in training your employees, you get results like this:
Just before the pandemic, I walked around downtown Los Angeles with a buddy. We passed a pop-up gallery for artist Karen Bystedt and her work of Andy Warhol. We decided to check it out.
A nice young man welcomed us, then left us alone. After a few minutes, this gentleman asked if we'd seen Bystedt's work. Neither of us had. He then asked where we were from. My buddy said New York — he'd been at NYU when Warhol was alive.
The employee shared that Bystedt was going to NYU when she called Warhol's office on a whim. He answered, and she asked if she could photograph him as a model.
Warhol was intrigued, and Bystedt did the photoshoot. Twenty years later, she found the photos and turned them into artwork. These pieces run for between $10–20k. It's interesting but very “LA” — not something I was ready to purchase.
As my buddy and I prepared to leave, the employee introduced himself as Mark. Mark then pointed to a display case and said:
"These are limited-edition Bystedt wallets. They're one-of-a-kind. The pieces are only $40; once they're gone, they're gone."
We each purchased one.
Imagine how many times Mark did this daily! Now that's how you compete. Engage with strangers in your store, one person at a time. Then, make the sale.
Why do some retail stores get the customer experience so wrong?
Because these brands believe we go to a store looking for a specific item when we usually don't.
People go to retail stores for various reasons, only a few of which are conscious decisions.
Take a look at this quote from Simeon Siegel of Nomura in The New York Times:
"There is a self-help mentality now. People walk around with their phones in their hands to tell them the best model and the best price. You don't need as many people walking around trying to convince you to buy a sweater."
I don't see it this way.
When someone goes to your physical store, they want something more than a mobile experience. Why else would they spend valuable time going to your shop?
If customers truly wanted no interaction, they wouldn't be in your retail store.
But they are in your store.
I maintain these shoppers want a feeling. They want a conversation. Most importantly, they want a connection.
The question is this: How are you making a human connection that puts the customer first?
If you agree customers seek connection above all else, then I have to ask:
Why don't you train your employees accordingly?
Look, there's no magic bullet to save you from the Borg of retail — this idea that online shops will assimilate every retail store, and resistance from it is futile.
A five-star customer experience results from many small changes, all of which add up to create a lasting impact.
Trust me: if your retail business was already the best example of premium service, you wouldn't be closing stores.
We're in a seismic shift in shopping, so stay laser-focused on your customer in a human way.
And remember, you won’t become successful by closing your retail doors. But you can prioritize connection over the transaction and win the retail shakeout.
Take my free 5-part email course to learn how your retail store can outsell any online retailer. You can begin your first lesson by entering your name and email address below ...