In 2018, it seems like we constantly see headlines about retailers that are shutting down a large number of their store locations throughout the U.S. This past summer, Toys ‘R’ Us closed its remaining 200 U.S. stores after 70 years of business. The news of these closings left customers feeling shocked as they observed the end of one of the most iconic names in retail.
How can any major retailer be able to grow—and remain successful—in the face of so many retailers consolidating their stores? What issues do retailers like Toys ‘R’ Us continue to face in our current retail environment?
Let’s find out.
Innovate, Refresh, Energize the Shopper Experience
With the ease and accessibility of Amazon for consumers, it is vital that companies constantly work to keep the shopping experience fresh and exciting.
This was something that Toys ‘R’ Us struggled with before closing. The company was millions of dollars in debt, and it was unable to provide its stores with investments that were already long overdue. CEO David Brandon even admitted as much himself, saying that Toys ‘R’ Us had failed “on various fronts, including with regard to general upkeep and the condition of our stores.”
Furthermore, big-box stores such as Walmart were far ahead of Toys ‘R’ Us in overall toy sales, racking up twice as many sales as the once-fabled company.
When Toys ‘R’ Us filed for bankruptcy in September 2017, it did so with the hope that nearly $65 million would be invested back into its stores. The money was to be spent on hiring more employees to help guide shoppers through the massive stores, plus investments in general store upkeep and enhancement. However, because of the low unemployment rate and increasing hourly wages throughout the country, the legendary toy retailer was unable to adequately hire the staff that they so desperately needed. Ultimately, it was too little, too late for Toys ‘R’ Us.
Act Quickly and Confidently
Through Wiser, retailers can know, in near real time, what stores are underperforming in the eyes of the customer. Track the factors behind positive shopper experiences within your stores.
For instance, key factors in a positive shopping experience include:
- Ample inventory.
- Clear signage.
- Efficient checkout lines.
- Dedicated and friendly employees who can assist customers with their needs.
It was too late for a turnaround by the time Toys ‘R’ Us realized where they were failing. Crowdsourced data sets that are gathered by actual smartphone-enabled shoppers are essential for retail companies. This data helps those who want to stay ahead of the curve and constantly improve the in-store shopping experience. Actionable insights from inside the store prevent companies from losing sales to big-box stores and online retailers.
Listen to Your Shoppers
Wiser’s mobile app can bring your questions directly to the shoppers who can provide answers. These smartphone missions allow you to gauge shopper sentiment, especially as you attempt to open new locations.
For example, a company that has been quite successful recently is Five Below. By following shopper sentiment and knowing that their customers desire trendy, cheap gift items, they have been able to open hundreds of new stores. On a call with analysts, CEO Joel Anderson said that “we’ve always been a trend right retailer. That’s what Five Below was built on.”
Five Below’s dedication to listening to customer feedback led to an increase in sales, net income, and more store openings. It should be a model for how other retailers, especially discount stores, operate in the current climate.
Ultimately, there is still a definite need for physical retail stores of all categories. Consumers still like the in-store shopping experience as well as the ability to browse for deals and promotions that are not available online. While headlines on the internet will continue to spread doom and gloom about the future of the physical store, retailers are successful by offering a comfortable and welcoming shopping experience for customers by listening to their feedback and quickly acting on this data.