Around America in 80 days

 

Best BuyThe retail industry is fixated on what is new. Industry professionals are apt to get just as quickly jaded as the consumers in whose service we toil.

We complain about how our children have short attention spans and need ever greater thrills to hold their interest, yet when we see a shopping centre only a year old we’re quick to notice what has been done better more recently somewhere else.

Retail tours swan in and out of the world’s retail mega cities – New York, London, Los Angeles, Tokyo, Hong Kong. They hardly ever go where the average Joe lives or shops.

Also symptomatic of our own short attention spans is the now numbing overuse of the word ‘flagship’. Any retailer worth its salt doesn’t deign to open a store anymore. It’s always a damn flagship. As though the whole retail industry had a maritime obsession and every big store was run by a captain and a quartermaster.

I just spent almost three months scouring North America to find out what was really going on in Ordinaryville, where most people shop. It wasn’t very pretty. To feed my own addiction to the new and electrifying I also went to the usual haunts of the retail industry tourist, and that was edifying too in its own way.

Much has changed in American retail post-Lehman Brothers. Not all of it is for the best, and after five years of dormancy during which few new developments have seen the light of day, it can no longer be said that the US is a leader in shopping centre innovation, at least from the standpoint of design.

It does, however, remain a laboratory for technological and merchandising experiments at shopping centres, some of which hold a lot of promise.

But what strikes you first is not what’s changed for the better, but what’s changed for the worse.

1. Service levels

Service levels have dropped at retail stores, in some cases catastrophically. Retailers that once set the international bar for positive instore experiences are now coughing up some of the most mediocre ones imaginable.

A good example is Best Buy, the world’s biggest consumer electronics chain, which used to have everything you wanted and buzz with informed sales staff. Now it feels moribund every time you walk into a store.

Worse, Best Buy is now backing up its instore experience with a simply horrible omni-channel experience. You can’t purchase from the e-commerce site within the store. And when you buy from the e-commerce site at home you can’t return the item to the store when its the wrong thing or it’s no good. And that’s when the fun really begins, as I was to find out.

2. Too much space

The amount of retail space that is either vacant or functionally vacant (meaning the lights are on and the doors are open but no one and not very much stock is inside) is mindboggling.

Again, this is not something you see in the major shopping centres and main streets of the big cities where the retail tours go. You have to drive around a bit.

The worst problem is with power centres – the US equivalent of a bulky goods centre – where e-commerce and overbuilding have combined to wreak havoc. There are also quite a few regional shopping centres that are not too flash either.

3. Health and wellness

This is becoming a prevalent theme in shopping centre merchandising. It may involve just the introduction of a fitness centre and a health food store, or it could be a much more comprehensive re-tenanting initiative, involving spin studios, gourmet supermarkets, bakeries, eyewear practices, and medical offices.

Hospitals as anchor tenants are also becoming a big theme. Health and wellness centres are arguably one of the most promising concepts for bridging the generation gap out there at the moment.

I asked a friend of mine in Philadelphia, does this mean Americans are getting serious about more healthy lifestyles? She grinned at me and said: “No, not at all, they just want to be able to keep indulging themselves, and going to fitness centres just keeps them from exploding.”

4. Technology

Retailers and shopping centres have become much more proactive about introducing technology. They are hellbent on bridging the gap between themselves and Amazon.

Wi-fi, crowdsourcing, big data initiatives, and geofencing are all part of a growing suite of technologies they are either rolling out or studying.

5. Factory outlet centres

The larger centres coming on the market are factory outlet centres, but they are a far cry from the those of the early days.

Designed differently, merchandised differently, and much nicer. The only thing they seem to have held over from the bad old days of factory outlet retailing is a penchant for poor food. But there are signs even that is changing.

6. Bacon

No, you read that correctly, I’m quite serious. In seeming stark contradiction of the health and wellness theme, bacon is really back in fashion and if you don’t like bacon you’d better beware, particularly if you’re a vegetarian or almost a vegetarian like me.

Bacon is being used as the base for soup, it’s sprinkled on salads, scattered on french fries, and baked into toasted cheese sandwiches. Even if you go to a fairly nice restaurant in a shopping centre you run a huge risk of being ambushed by bacon. You’ve been warned.

Three months back in the US, which used to be my home, has become a testing, but fascinating experience. The place is still a lab for what is best and worst, but I guess the worst is just a little more obvious to me that it used to be.

Michael Baker is principal of Baker Consulting and can be reached at [email protected] and www.mbaker-retail.com.

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