Bad news for brick-and-mortar retailers, again.
Sears Holdings Corp, once the king of American retailers, has filed for Chapter 11 bankruptcy with a plan to close 142 more stores.
While its slow demise is lamentable, its bankruptcy is a clear warning to other retail stores, especially to other brick-and-mortar retailers.
As consumers increasingly buy online, and technology changing the landscape of the retail industry, brick-and-mortar stores are suffering in the age of e-commerce.
Physical stores have been struggling with their pricing since the inception of Amazon, Alibaba and other e-commerce platforms.
Now a retail giant is officially bankrupt.
Sears was the largest American retailer as recently as the 1980s, and it dominated over the postwar era and much of the 20th century.
Many call Sears the Amazon.com of its day, the place where consumers could shop for almost anything they needed, including food, clothes, appliances, furniture – even houses!
However, the company recently filed for bankruptcy protectionand announced that it will closeabout 142 stores by end of the year.
What Brick-and-Mortar Retailers can learn from Sears’s Mistakes?
The story of Sears is yet another reminder that everything is changed, there is no guarantee of leadership position tomorrow.
And it is a big message, blaring loudly and clearly to all.
So how are you going to adapt to the times? How are you adapting to what the consumer wants?
Better question, how would a traditional brick-and-mortar retailer survive in this fast-changing industry?
Keep an eye on consumer shopping habits
Being the leader in your field today doesn’t guarantee you top position tomorrow.
Sears choose to ignore rival retailers, and confident that its century-old business model was invincible.
But change in consumer shopping habits brought on first by the rise of retail discounters like Walmart and Target, which made competing on price a prime strategy, and then by Amazon, which made shopping from home convenient, had made Sear’s business model an obsolete one.
If Sears had kept a closer eye on its competitors and
In the present, all the brick-and-mortar retailers need to completely rethink their business models.
Most importantly, they should invest in a strategy that focuses on customer wants, new technology and their competitors’ roadmaps.
Update your brand with good marketing strategy
If a retailer fails to understand the significance of branding, they will not able to survive in this highly competitive industry for long.
In the crowd of billions, it’s necessary to make your brand stand out to attract your clients.
Sears still has roughly 700 stores, but many of the stores have never been visited by an increasingly younger group of shoppers.
The young people today don’t even recognise Sears as a place where they would go.
And why would they? There is no incentive for them to do so when there are millions of other choices online.
Not only is the brand outdated, but Sears has allowed its physical stores to fall into disrepair, significantly affecting their remaining customer experience.
Today’s consumers have more retail choices than ever, and the ability to make snap prices comparisons easier than the past.
Innovation, however, can give retailers all important edge to differentiate themselves from the competition.
Alibaba’s Jack Ma said, “All the consumers are the same; they want new things, they want good things, they want unique things. If we can create these kinds of things for consumers, they will come.”
Outdated technology, operating system, as well as old mindsets, are the key reasons Sears failed.
The company management focused on short-term returns instead of long-term investment, putting more capital on the projects that generate profits right now over the long term.
They had ignored the need to innovate their technology, products and business strategy.
Despite the negativities, brick-and-mortar stores are not dead, and will never completely be. It is, however, evolving.
That’s where the New Retail concept created by Alibaba comes in.
New Retail in layman’s terms is the mergingof the online and offline in a manner that provides customers with a bettershopping experience.
Alibaba has placed immenseimportance on its New Retail strategy in its Hema Fresh’s stores.
In five years, the average consumer journey will look very different as retail’s transformations embrace tech that continues to evolve, deepening our understanding of consumer preferences and shopping habits.
If you offer the right combination of experiences and environment, you can create a unique dynamic between your brand and your consumer.