Is 'Mocial' The Key To Struggling Retailers' Future Success?
Struggling department stores know they need to make a splash to remain relevant and survive in a constantly changing retail environment. Connecting with the consumer inside and outside of the store has become more important than ever. As has ever been the case, those who capitalize on changing trends will emerge better positioned for the future within the retail landscape.
Some have wondered why department store Macy's Inc (NYSE: M) is struggling and has announced it is closing 100 stores, while a competitor like Nordstrom, Inc. (NYSE: JWN) delivered excellent earnings recently and is up 37 percent in the last three months.
One thing that sets Nordstrom apart from Macy's is its online footprint. Nordstrom has been performing well due to its strong e-commerce presence and loyalty program. Likewise, Wal-Mart Stores, Inc. (NYSE: WMT) recent Jet.com acquisition for over $3 billion has brought to the forefront the importance e-commerce strength plays in the future of any business.
It's All Reality, Whether Tangible Or Virtual
The balance between brick-and-mortar and the virtual store space continues to be a precarious relationship, as retailers need to leverage their physical store presence to boost e-commerce sales. As further testament to the success of both physical and virtual presences, Amazon.com, Inc. (NASDAQ: AMZN) has already done so with its physical locations, dubbed Amazon Books. A growing trend in business is the need for a local, social and mobile strategy, which could be the key to the resurrection of struggling retail stores.
"Mocial" (Mobile Local Social), as the trend is known, is a way for retailers to connect with consumers inside and outside of the store to drive revenue. One way the retail landscape change is beginning to be realized is through the introduction of beacon technology. One example of such technology has been seen in Pokémon Go (Nintendo Co., Ltd (ADR) (OTC: NTDOY)); the app identifies when users are in an area, and through mobile beacons, a Pokémon character pops up.
Knowing that apps can incentivize users to go to physical locations to get "rewards," retailers are likely to jump on the trend and utilize this innovative technology to drive people to their businesses.
Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) is in the process of developing "Google Nearby," which will be a way for mobile users to interact with what's around them. In turn, it will be a way for what's around the user to interact and drive traffic to specific locations through incentives. Google Nearby will allow users interact with Devices up to 100 feet away to do things like pay for parking in a garage from their phone and order food to your seat at a baseball game.
International Business Machines Corp. (NYSE: IBM) is also altering the retail experience with analytics tools from its supercomputer Watson. IBM knows consumers shop for products before they ever get to the store, and Watson will allow retailers to better identify product and channel preferences "while engaging and serving consumers in an always-on, tech-addicted world," according to the company.
Companies that utilize this new technology and strategy to enhance customer shopping experience will be able to capitalize on the next wave of retail, and possibly survive the current slump.
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