A renewed focus on building better customer-brand interactions has resulted in an unexpected strategy emerging in department and big-box retailers alike. Apparel retailers like Macy’s, Nordstrom, and Kohl’s have limited their inventory since mid-2017 as a part of an ongoing initiative to minimize costs.
This kind of thinking flies against the “stack ‘em high, watch ‘em fly” paradigm that has dominated department stores at large for the past century. Having a diverse selection of products in-store has been the answer to driving sales. What has changed in the past decade to result in this dramatic shift?
Physical Stores Can’t Beat the Diversity of Online Retail
No matter how large a store is, there is no matching how many products are available online. Customers have virtually endless options in selecting a retail outlet on the Internet. That is why some retailers have reduced the number of brands carried by physical stores, and some department stores are even creating their own store brands.
For the past year, the Kohl’s omnichannel strategy has overtaken their previous philosophy of maintaining a wide selection. As a result, they have been able to grow their profits significantly compared to late adopters like Target. At its core, reducing inventory is a matter of reducing costs. If customers are no longer interested in variety from their retailers, then it only makes sense to cut that cost.
Replacing Inventory With A Better Customer Experience
If you’re not convinced that customers are looking for more, only look at the number of retailers refocusing from that “stack-‘em-high” mentality to the more multichannel-centered experimentation. If it’s a matter of filling in space in the store, retailers are finding more often that introducing more diverse and engaging touchpoints can also benefit the customer journey and increase conversions.
Utilizing store space can be done any number of ways. Adding a section for self-checkout lanes, click-and-collect kiosks, or a seasonal pop-up can help drive foot traffic and attract customers to your store over carrying specific brands.
Your brand experience is a function of what you offer in your stores to make the trip memorable, and as a result, many retailers have taken additional steps to focus on engagement. The term is called “pull” marketing – giving a reason for customers to come into the store, as opposed to “push” marketing, or simply offering products.
The Future of Retail Inventory
Still skeptical that less can be more? The numbers speak for themselves in the case of department stores who are adopting omnichannel strategies, but for those who are having trouble imagining what a large department store would look like without just product, you can take our tour through a tech-driven retail environment or find out what stores are succeeding, and how their physical stores are looking in today’s climate.
If you are ready to get started and bring your store into the current era of retail, we can help. Worldlink Integration Group has a depth of experience in upgrading current systems and deploying new ones. These include digital signage, kiosks, and point-of-sale systems. Contact us today to find out how you can Win With Worldlink.