Retail

Retail Pulse: The Price Must Be Right

It’s been a week of experimentation in retail, with many big names opening new types of stores to as the saying goes see what sticks. Brands like TJX, Macy’s, craft and fabric retailer Joann, and Walmart’s ModCloth are trying on smaller-format, off-brand and off-price destinations with features and experiences tailored for the digital-first generation.

Will one of them uncover the key to getting convenience-driven eCommerce shoppers to walk back through brick-and-mortar doors? It seems more likely that these brands will uncover their key rather than some universal master retail key that can solve the brick-and-mortar challenge across the board.

It does seem, however, that a focus on affordability is a core driver of new retail strategies for brands. Consumers love a deal, so if retailers can offer lower prices that give shoppers the sense that they’re saving and in particular, saving over what they would spend in an eCommerce environment, which is generally seen as more affordable and certainly more convenient then they may be able to lure some foot traffic back through the doors.

But price is just part of the strategy. Experience is also a critical component. If merchants can’t share a master retail key, perhaps they can at least take inspiration from the creative approaches of others in the space. Here’s what these big brands are trying on for size.

TJX

HomeSense is TJX’s Canadian chain of off-price home furnishings, a sister store to HomeGoods and, of course, T.J. Maxx. The discount furnishings retailer has a presence across Canada and Europe, with dozens of locations in those regions, but is just getting its feet wet in the good old U.S. of A.

TJX plans to roll out 400 of its HomeSense stores across the U.S. at a rate of 20 to 25 locations per year. The first HomeSense stores opened earlier this year in Massachuestts, New Jersey and New York. The chain, this week, signed on for two locations vacated by H.H. Gregg in Maryland and Virginia, and also has plans for more stores across states where it already has a presence.

The owner of the Fairfax, VA property expressed hopes that HomeSense could do what the previous anchor tenant had not: “To be the 800-pound gorilla and bring in traffic.”

Macy’s

The first Macy’s Backstage stores appeared in 2015 and 2016 as free-standing entities in the Northeast and San Antonio. Now, it is introducing more Backstage locations in Nevada, Texas, Washington, Ohio, New York and others, following the store-within-a-store model that it has used in 96 locations.

The company aims to open 100 new locations this fiscal year and is backing up the growth with a dedicated distribution center in Columbus, Ohio.

Like TJX’s HomeSense, Macy’s Backstage offers discounted clothing, styles and fashion and it’s not just last season’s stuff. Backstage stocks current trends from top designer brands, offering an outlet-style shopping experience focused on affordability.

Joann

What could be more fertile ground for a retail experience than an arts and crafts store? That’s the spirit behind Joann’s prototype store format in Columbus, Ohio, which was unveiled June 13.

The new format focuses on community and creative learning, with dedicated spaces and supporting technology. An open community space will be available for classes, events and machine rentals. Touch-screen kiosks are available to help guests customize crafts based on personal preferences. Other new tech allows fabric shoppers to check in on mobile and continue shopping until an associate is ready to cut their fabric, rather than waiting in line.

The brand has also expanded its category assortment and introduced new concierge services so customers can get their suit tailored or curtains shortened in the store.

Leveraging intel from its partnership with Pinterest, Joann introduced an area where customers can learn to use electric cutting machines, and various materials and accessories to make DIY custom T-shirts a trending project. Going forward, features and classes will be based on the latest trends like this.

ModCloth

Like many brands opening brick-and-mortar locations today, ModCloth started out as an online-only store. The Walmart-owned retailer is now opening stores in four key cities: San Francisco, Los Angeles, New York and Washington, D.C.

Hailing back to its digital roots, however, ModCloth is taking a unique hybrid approach to these stores. Shops will feature sample items in a variety of sizes, which customers can try on but shoppers will never walk out of the store with a bag. Instead, when they find an item they like in a size that fits, they will be directed to order that item online.

In-store stylists will be on hand to help shoppers select and order items, adding to the “experiential” aspect of the stores.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

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