Every year, some stores close and some stores open – it’s the circle of life, as The Lion King would say. But in 2018, and now 2019, we’ve begun to see a shift in what stores are going under and which ones are outperforming their targets.
As we recently wrote about, bricks-and-mortar stores are far from dead but the consumer trends are changing.
We are seeing larger, more traditional stores struggle – the recent Sears and Payless Shoes bankruptcies come to mind, along with Hudson’s Bay struggles, J. Crew, and Gap Ltd.
Department stores seem to be on the outs, but what’s on the rise? That’s where it gets really interesting.
Across the board, consumers seem to be split between two extremes: the high-end and the low-end.
On the high-end, shoppers are gravitating towards luxury retailers like Nordstrom, Holt Renfrew’s expansion, and designer stores, like Chanel. Yorkdale Shopping Centre in Toronto is a perfect example of this shift – most of the stores are high-end or first-to-Canada brands, yet it is busier than ever.
But on the other side of the coin, we have stores like Dollarama, Giant Tiger, Uniqlo, and the like that are expanding, indicating a preference for bargain prices.
It appears that consumers who aren’t willing to spend high-end prices want the best deal possible. The middle of the road is where it gets tricky.
The other big market is niche and off-rack stores. We’ve written recently about Saje Natural Wellness, Trader Joe’s, and Nordstrom Rack. While some of these stores do fall in the murky middle of pricing, their sales aren’t suffering for it. Consumers are gravitating towards retailers that offer a unique produce and experience, especially, it seems, if that niche has to do with health and wellness.
So, what can we take away from this?
- Look at your product offerings and examine the price points.
- If it is in the murky middle, ask if it could function well in a high-end retailer at a higher price, or if dropping the price for low-end retailers is the better solution.
- Do you sell a niche product? Or is there an opportunity to make your products niche?
There may be ways to shift your products to reflect your chosen market with a few small design and marketing tweaks.
Consider the experience:
We’ve also recently discussed the “ROX” – return on experience – which was a highlight in the PwC Canada 2019 Canadian Consumer Insights Survey. Customer experience is a big selling feature, particularly for bricks-and-mortar stores.
If your product or retailer lies in the middle, how can you make it more of an experience? If your price point isn’t a draw, you need something else that gets customers in the door. Look at stores like MAC, Home Hardware, and Costco for examples of great in-store experiences.
Storesupport Canada is here to help you meet your merchandising goals regardless of your price point. We make sure your products are kept in stock, on shelf, priced correctly, and that your displays catch eyes.
Contact us today to learn more about our services. Call 1-877-421-5081 or visit www.storesupport.ca.