Brick-and-Mortars Look for Consumers to Return to Traditional Shopping
Are the shoppers coming back to brick-and-mortar locations? According to the National Retail Federation (NRF), the world’s largest retail trade association, there are strong indications that consumers are willing to return to in-person shopping.
The NRF reported that retail sales were virtually unchanged from a strong March performance and grew dramatically year-over-year in April as the rapidly recovering U.S. economy marked a full year since the pandemic shut down most stores during the spring of 2020. The NRF cited year-over-year growth of 28.8% as an indication that household finances remain strong, and the economic recovery will likely continue to gain steam as we head into the summer months. Here are what some brands are doing to entice back shoppers to their physical store locations.
Macy’s Inc. (Tii:M) experienced a very challenging 2020 that came on top of prior store closings as the department store chain hemorrhaged customers to discount clothing retailers. To contend with these pressures, Macy’s is looking to open new locations that further away from mall locations, where there is less direct competition. Demonstrating its commitment to brick-and-mortar locations, the retailer also announced plans to renew its flagship Herald Square store, which includes $235 million of private investment in the surrounding New York City neighborhood. The renewal plan is expected to generate $269 million annually in new tax revenues for the Big Apple, support 16,290 annual jobs and spark $4.29 billion in annual economic output.
With more than 1,100 stores in 49 states, Kohl’s Corporation (Tii:KSS) is looking to entice consumers into all those physical locations, particularly while struggling to compete with Walmart Inc. (Tii:WMT) and Target Corporation (Tii:TGT) in the apparel space. To that end, Kohl’s is partnering with Sephora to offer small beauty shops inside 200 Kohl’s locations this fall. The omnichannel retailer also formed a partnership with Volta Industries, Inc. to bring 100 electric vehicle (EV) charging stations to 50 additional Kohl’s stores this year. Through the partnership, consumers will be able to shop Kohl’s wares while charging their EVs at 275 stations at more than 150 Kohl’s stores.
Nordstrom, Inc. (Tii:JWN), which operates 358 stores in the U.S. and Canada, reported that fourth-quarter sales reflected broad-based improvement across the Nordstrom and Nordstrom Rack brands both in stores and online. While sales were still considerably lower than pre-pandemic levels, the leading fashion retailer introduced order pickup at U.S. Nordstrom Rack stores for Nordstrom.com, NordstromRack.com and HauteLook.com orders – likely a strategy to lure consumers into physical locations to boost in-store sales. Later this year, customers will be able to pick up their U.S. NordstromRack.com and HauteLook.com orders at their nearest Nordstrom and Nordstrom Local.
The largest off-price apparel and home fashion chain in the U.S. with 1,866 locations in 40 states, Ross Stores, Inc. (Tii:ROST) is committing to its physical locations. The retail giant announced plans to add approximately 60 new stores – 40 Ross and 20 dd’s DISCOUNTS locations – during fiscal 2021. The company expressed optimism that it can grow to 2,400 locations. Ross Stores generated total sales of $12.53 billion for the 12-month period ended January 30, 2021.
An operator of 1,271 T.J. Maxx, 1,131 Marshalls, 821 HomeGoods, 48 Sierra, and 34 Homesense stores, The TJX Companies, Inc. (Tii:TJX) has adopted a treasure hunt shopping experience strategy to bring consumers into its storefronts. The retailer surreptitiously stocks higher-end designer brands or other unexpected items at discount prices along with its off-price apparel and home fashions, creating a treasure hunt. This strategy is designed to entice shoppers into impulse purchases and encourage consumers to return to stores to uncover what new surprise offerings are in stock.
If the NRF’s predictions come to pass, retail sales should grow between 6.5%-8.2% by year-end and generate revenues between $4.33-$4.4 trillion as millions of consumers load up physical shopping carts as well as virtual.