Fashion accessory brand Fossil is the latest big name in reshaped retail.
The company announced that it is downsizing, in the face of declining total sales, by streamlining its SKUs and closing stores. Fossil is a wholesaler and retailer operating 610 branded outlets around the world, including 284 in the US.
Fossil hasn’t announced how many stores it will shutter, but its brick-and-mortar strategy will doubtlessly dovetail with its plans to pare down inventory.
“People want fewer and better products,” Fossil CEO Kosta Kartsotis said on a conference call. “Consumers don’t want to see a huge assortment of products like what’s in a department store. They want to see a few good, well-designed products.”
Big-Time Reshaping Retail in US
Fossil joins Macy’s, Staples and a slew of other major US brands that have announced closures of brick-and-mortar locations in 2016. eCommerce has forced them all to rethink what they sell and where they sell it.
The exodus of big retailers from shopping malls has American commercial real estate firms scrambling for better investments. Sprawling malls and parking lots are suffering, but the brick-and-mortar store will never disappear, because customers will always want it.
Physical Beings
More people shop online, and more frequently, by the year. Research from digital marketing firm Walker Sands reports that in 2016, nearly one-third of consumers shopped online at least once a week, a 41% increase from 2014.
The same report also shows, however, that aside from buying electronics and books, they still prefer shopping in a physical store. The figures show 77% of surveyed consumers want to shop in a store for consumer packaged goods, and 95% prefer shopping for groceries in the supermarket.
Free shipping, one-day shipping and free returns are among the top drivers for customers to shop online.
Tangibility is the reason people will continue to shop in a store. People want to try on a shirt, see what a piece of furniture looks like in person. They want to be certain about what they are buying, and they do not always trust images and customer reviews to convey the full experience.
As one writer pointed out earlier this year, “we’re flesh and blood beings, living in a physical world” and thus seek out real-life authentic experiences.
This is the reality that brands like Fossil, invested in a pre-eCommerce supply chain, are not only rethinking their retail strategy, but how their inventory fits into the reality of an omnichannel world.
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