Another One Bites the Dust? Not So Fast.


This week's retail news greeted us, yet again, with another not-so-surprising headline, which has been a reoccurring theme throughout the past year:

Toys ‘R’ Us Files for Bankruptcy, Crippled by Competition and Debt

While for nostalgic reasons this headline saddens my inner six-year-old, fully aware that Toys "R" Us was at one time the ultimate childhood utopia, it’s a relief knowing that a file for bankruptcy doesn’t necessarily mean the end.

According to a recent Retail Dive article:

“Nearly 20 major retailers have filed for bankruptcy so far this year by our count, including major brands ranging from Toys R Us and BCBG Max Azria to Gymboree and Radioshack (for a second time) […] Retailers file for bankruptcy for a number of reasons and it's not necessarily a death sentence…”

While bankruptcy isn’t necessarily the bullet in the head for retailers (yippee), and can be a clear sign of transition—there is A LOT of work to be done. Retailers may undergo reorganization and come out alive, but how they fair after is the true test of survival.   

How well retailers cater to their consumer’s expectations, compared to their competitors, is going to be the determining factor.

A Smaller Footprint, Better Experience

While store closures can be a sign of retailers ‘cutting the fat’ across less profitable stores, it also indicates a transition away from more traditionally formatted stores. 

We’ve gone over this topic before, but it falls under the overarching theme of consumer influence. Retailers are becoming more receptive to the shopper experience, which is one element driving transformations in the retail world. 

We saw this with Coach earlier this year with their successful ”shrink to grow’’ strategy, which was a result of paying attention to what customers are actually after.

Retailers have to listen to their customers in order to thrive.  

Decreasing your brand’s physical footprint to cater towards a more personalized, intimate shopper experience is one way this is being done.

On top of this, some brands are getting really creative when it comes to innovation and re-inventing the in-store experience.

Get this:

Nordstrom is opening a brand new location—in a time when most clothing retailers are closing up shop—with absolutely nothing for sale.  


Yes, you read that right. This experimental location will shrink from an average 140,000 square feet per location to a much more compact 3,000 square feet. Nordstrom plans to make clothes available to try on; only the store won’t actually keep any actual inventory in stock. 

Instead, customers will have to wait (while enjoying beer, wine or espresso, or indulging in a manicure) for the department store to order selected items online or from other, local Nordstrom retail locations. The goal is to eliminate overwhelmed consumers who face a vast array of choices in a typical department store setting.

In addition to the fitting rooms and reduced selection, stylists will be on hand to help customers and create customized recommendations to shoppers.

According to Nordstrom’s news release: 

“As the retail landscape continues to transform at an unprecedented pace, the one thing we know that remains constant is that customers continue to value great service, speed and convenience. […] We know there are more and more demands on a customer’s time and we wanted to offer our best services in a convenient location to meet their shopping needs. Finding new ways to engage with customers on their terms is more important to us now than ever.”

Nordstrom’s experimental foray is another in a long line of experience-driven brick-and-mortar retail. Other retailers have offered more than their own clothing in an attempt to lure in would-be customers. Lululemon, for example, has begun offering yoga classes, and some Luis Vuitton locations double as art galleries.  

Tommy Hilfiger recently took a different approach by offering a ‘shoppable’ fashion show using mobile visual search and image recognition tools during the unveiling of its fall collection. This was done in an effort appeal to the brand’s mobile users and increase the speed of availability of their new products.

Attendees could snap a quick pic of any item they liked on display, and, voíla, the product instantly became available for purchase on Tommy Hilfiger’s website.

Doesn't that sound magical?

Give the People What They Want 

It’s all about the consumer, their experience and their connection with the brand. They thrive off authenticity. They looove personalization. They want items delivered quickly and they want their shopping experience to be easy. 

When all is said and done, when and if retailers going through bankruptcy succeed in restructuring, paying off their debts, etc.—how they succeed in meeting consumer expectations and influencing their decisions around the customer will essentially determine how they can stand to compete in the retail space today.

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Topics: customer experience, shopping trends, physical stores, consumer insights

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