What a Successful Brick-and-Mortar Strategy Looks Like in 2024

It's a tough time for retail.

Roughly 4,600 retailers closed store doors in 2023--80 percent more than in 2022, according to Coresight Research data. The first quarter of this year isn't looking much brighter, with big names like Macy's closing 150 stores and Family Dollar announcing plans to close 1,000 this year. DTC brands like AllBirds are taking a hit, too. The San Francisco-based footwear brand announced in a press release earlier in March that it expects to close 10 to 15 of its stores after year-end numbers showed a 14 percent decrease in revenue, over a $40 million loss. 

So, is this the end of brick-and-mortar retail? Not quite.

Omnichannel over everything

Despite the rocky footing, there are still a number of ways that business owners can leverage their brick-and-mortar stores, as long as it's in tandem with other sales channels, says Amish Tolia, CEO and co-founder of the New York-based retail platform Leap, which helps digital-first brands launch stores. He recommends brands employ retail strategies that can generate both social media buzz and increase in-person foot traffic. That can look like hosting pop-up events for product launches, offering free hot chocolate in-store, or endorsing brand ambassadors, as lifestyle brand Malbon Golf did with professional golfer Jason Day, he says.

"[Consumers] want to be able to post things to their social feeds and social currency, so the marketing activation piece of the puzzle is critically important," he says. 

That said, business owners should be wary of the temptation to accelerate retail too quickly. Tolia points to AllBirds as an example. The shoe brand, which opened north of 60 store locations by 2022, ultimately didn't have enough variety in product strategy or assortment to keep pace with its retail strategy, he suggests; when demand started to slow for the brand's core products, sales consequently dipped, thus resulting in store closures this year. AllBirds declined to comment on the matter. 

Consumers want experiences

Tolia says in-person shopping has returned to its pre-pandemic traffic levels, and businesses that are excelling are the ones that create things for customers to do--or experience--beyond just shopping. "Retailers are really re-concepting and reformatting their retail experiences, which is creating excitement for consumers," Tolia says. "If you give [customers] a reason to be [in store] to experience and to be excited--to come visit you--people will come, and they will seek you out." And that, of course, can translate into sales.

Customers should "feel the brand" the moment they walk inside a store, says Juan Pellerano-Rendon, chief marketing officer of Swap Commerce, a software development site for retailers. He points to casual apparel brand Sporty and Rich, which recently integrated mini spas into its stores where customers can get facials and different treatments when they visit. "Thinking about, 'what are things that I can add that are resonant to my audience that fit within the brand and our aesthetic and what we're trying to do?'"

Crawl, walk, run

Considering the difficult climate of brick-and-mortar, however, Pellerano-Rendon says brands should think of taking a slower approach to retail by deploying pop-ups in potential markets--essentially taking a "crawl, walk, run" approach to retail growth. "Do a lot of promotion and see what kind of foot traffic you get for these short engagements," he says, and then choose the top performing places to launch retail stores based on that pop-up data.

Utilizing a pop-up strategy has become common for many young brands, like D'Amelio Footwear. The Los Angeles-based shoe brand, co-founded by famous TikTok sisters Charli and Dixie D'Amelio and their parents, had a booth at a trade show in Las Vegas, hosted a month-long pop-up in Los Angeles, and recently held a New York pop-up in March--all of which is part of the brand's strategy to physically and personally engage with customers before scaling into brick-and-mortar, the family told Inc.com. 

In today's retail landscape, brands that want to survive should be willing to meet customers wherever they are--but there's no one-size-fits-all solution to do just that. "You have to diversify across all these channels in a way that makes sense for your business," says Tolia.

Source: Inc