A key takeaway from the NRF’s Big Show is that retail’s future lies squarely between four walls as customer acquisition costs mount.
Published Jan. 13, 2020
Author Daphne Howland @daphnehowland
By Retail Dive
NEW YORK — Retail may be on a store closure tear — more than 9,000 announced last year, with another 757 already this year— but it’s clear from several analysts and executives speaking at the National Retail Federation Big Show that the key to the industry’s future success is found in brick and mortar.
“The biggest value we can give the founder of a brand is to interact with his customers,” Nathanel told Retail Dive in a post-session interview. “If we can stand for three hours on a Saturday in Showfields, you could interact with a 1,000 people.”
That doesn’t mean that retail should simply return to its 20th century business methods. Nathanel, Pelson, Alexander, Stephens and Kevin McKenzie, (a partner at CrowdedSpaces, which derives analytics and measurements from physical retail), all emphasized the importance of creating compelling spaces, providing good customer service, flexibility in how space is used, and assessing the utility of brick and mortar, often with analytics technologies to measure in-store activity.
That means calculating a store’s marketing value and not just its top-line sales. Crate & Barrel CEO Neela Montgomery, speaking during a keynote address on Sunday, said the retailer has taken into account that a customer may decide to buy thanks to their store visit, but the sale may not be made at that store. That demonstrates a physical store’s influence in customer acquisition, the metric that appears to be falling short at so many DTC brands.
“We’re not accounting for the value of stores,” Stephens said. “Buying advertising doesn’t work anymore. Stores are not about the distribution of products anymore, they’re about the acquisition of customers.”
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