If you want to know if retail in dying, just follow the money. And the money is in commercial real estate.
To get a better understanding of what’s really going on, I started listening to the people running the multi-billion dollar commercial real estate funds, because that’s where the money is flowing.
These funds invest hundreds of millions of dollars into buying and developing new brick and mortar retail outlets.
If retail is dying, then their funds would be in dire straits due to high vacancies, their rental income would be shrinking, therefore they would have stopped building new shopping centers and retail outlets… right?
What’s Old Is New Again
In May 2013, Peter Lowy the Co-CEO of the Westfield Corporation, one of the largest commercial retail corporations which encompass around 7,500 retail outlets in the US, UK and total assets under management in excess of $28.5 billion, predicted that book stores would make a come back to the mall.
And you can bet Peter has been very closely watching how the internet is impacting them on a day to day, month to month and year to year basis.
So What’s Really Going on With Retail Stores?
With Amazon continuing to dominate the market and some companies closing down stores, from the outside it may look like brick and mortar retail is slowly dying.
But the best way to think about what’s going on with retail at the moment is to compare it to the pruning of a rose bush.
You’re pruning everything back to stimulate future growth.
Here’s what Peter had to say…
“If you look at the top brands, they are closing marginal stores and they are building much bigger ones” – Peter Lowy, Co-CEO Westfield Corporation
But even as a sizeable majority of Americans have joined the world of eCommerce, and with that number growing each year, many still appreciate the benefits of brick-and-mortar stores.
Overall, 64% of Americans indicate that, all things being equal, they prefer buying from physical stores to buying online.
Westfield also brings a lifestyle component to their centers where friends and family come together to shop, drink coffee, eat a meal or go bowling.
You can’t do any of that on Amazon.com or online.
According to Peter, it’s not an ‘either / or’ debate.
He sees that everything is moving to mobile. People aren’t just sitting at home, surfing the net and shopping, with 70% of his customers going online to research a product and then going to a mall to buy it.
“Technology and the physical world are starting to merge everywhere.” – Peter Lowy Co-CEO Westfield Corporation
Barry Sternlicht, Chairman and CEO of Starwood Capital Group which currently has over $51 billion of assets under management, is on the board of directors for Restoration Hardware, he saw that they were rapidly closing 6000 square foot stores and opening 60,000 square foot stores and becoming the anchors at these malls.
Restoration Hardware are seeing sales at ⅓ from each channel: in-store / catalogue / online. Sternlicht said that they need this physical presence, and that smaller stores closing down is quite common, with much larger flagship stores opening up and becoming much more profitable.
What they’re all seeing is that incremental stores in the area are closing down and you’re getting a better concentration of retailers. The rest of consumers are covered through the online sales channel.
Nicholas Schorsch, Chairman and CEO of American Realty Capital compares it to banking:
“You saw the same thing in banking and that all branches would close. It’s a both business. It’s not an either or.”
4 Concrete Email Marketing Strategies Retailers Can Use to Get People Buying in Store
Email marketing today is still about sending well-timed and relevant emails to the right people at the right time.
We do that by sending lifecycle emails, targeted to specific customers at crucial points in their journey.
If customers are using both online and offline methods to purchase products, the focus should still be about sending them emails at the right moments.
This will be a combination of:
Triggered emails get sent to people taking specific actions on site (browsing activity), making their first purchase or if they stop purchasing.
Merging online and in store customer activity is key in gaining a deeper understanding of your customers.
Here’s four strategies retailers can start using:
1) Send email newsletters late in the week and on Saturday mornings to drive customers into your store
Visiting a brick and mortar retail location is another point in the customer’s journey. When do most customers visit retail locations? Generally on the weekends with friends and family or in the evening later in the week (Thursday / Friday).
If you want to drive in-store visits, email newsletters sent late in the week or on Saturday morning in your customers respective time zone with a special offer for purchases made in-store that weekend can help drive more customers into your store.
2) Send another abandoned cart email that drives abandoners into your physical retail store (not back to their online cart)
Using online browsing behavior we can track cart abandoners and send them abandoned cart emails. For people that don’t convert online after receiving multiple emails, we can add an additional email onto their abandoned cart series based on zip code or state with the goal on driving them into a local store.
3) Capturing email addresses at the point of sale
Everyone that visits your retail store and makes a purchase isn’t always on your email list. Capturing the email address of this group of customers is the unifying key that allows us to build a complete picture of a customer’s journey.
Make it easy for in-store purchasers to sign up for your email newsletter in-store. This can be as simple as having a notebook and a pen on the counter to capture the user’s email address OR capturing an email for a receipt.
Once we have their email address and understand how they make purchases in store, we can use that to power our triggered email marketing.
Here’s a few ways you can use that data:
- They just made their first purchase? Add them to a new customer welcome email series.
- They’ve just spent $1000+? Add them to the VIP campaign that invites them to future in store private events
- Did they purchase a replenishable product like a food item or face cream? Add them to the replenishment campaign that will automatically ask them if they would like ‘restock’ that product in 40 days. You could also provide them with free shipping so they don’t need to worry about coming to pick it up.
4) Using email as means of in-store marketing attribution
Email attribution is a complex subject, especially when you throw visiting brick and mortar locations into the mix.
People still cut out coupons and bring them into retail locations. The inbox can be used in the same way for programs like the one mentioned above.
Near a local store? Print this email or show the email on your mobile device in-store for a special offer. This bridges the gap in terms of understanding how digital can influence in-store purchasing behavior (or if it even influences it).
- Is brick and mortar retail dying? I don’t see it that way. But please continue the discussion with us on Twitter.
- With the online and offline worlds merging together, retailers need to be thinking about unifying their email marketing strategy to get a complete picture of how customers interact with their brands both online and in store.
- Use email marketing to drive customers in store and use in store purchases to capture email addresses and drive more sales online.
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