Retailers and fashion designers targeting the youth market will broaden their horizons in 2018, with a greater focus on ecommerce and a departure from traditional children’s designs that have dominated the industry for decades. The youth market in particular has seen some stunning failures in recent years, as management continued a focus on outdated tactics and a belief that mall stores should continue to be their primary focus.
Do young people still stroll through shopping malls? Sure – but the bloom is off the rose, and youth retailers who still place priority on shopping mall boutiques are pursuing a losing strategy. It wasn’t that long ago that shopping malls were the center of retail, and success in this market was simple: Appeal to the mall-bound youth market by placing boutiques in shopping malls with big anchor stores. “Build it and the tweens will come” worked wonderfully for a time.
That strategy no longer works.
Claire’s, which targets the youth market with a strategy that is heavy on mall stores, has also taken a major hit due to that strategy. With more anchor retailers shuttering mall locations, and the malls themselves seeing losses to ecommerce, Claire’s too has seen some big challenges, never fully recovering after a leveraged buyout in 2007. Moody’s Investor Service ranks Claire’s as one of the lowest-rated retailers – a big shift from its heyday, when its success was built on a belief that the shopping mall would be the future of retail, and everything else – including ecommerce – came second.
Other costume jewelry retailers like Charming Charlie, a 370-store retailer selling jewelry and accessories, are seeing significant challenges with an overly broad consumer target, and a weak ecommerce strategy, placing too much of their resources on new store openings with not enough on building an equivalent online presence. Charming Charlie, which targets women between 35 and 55 and features moderately-priced jewelry and accessories, filed for Chapter 11 in December and announced plans to close 100 stores.
Retailers are seeing the need to place equal, if not greater, emphasis on the online channel for all markets, but especially for the youth market – and these old-school, traditional retailers are losing ground to newer born-in-the-cloud retailers like In Season Jewelry, who understand well that the Web and social media are the new shopping mall for tweens and teens. Those retailers with a strong online channel fared well this holiday shopping season, and Deloitte’s 2017 holiday retail survey predicted that online spending would exceed in-store for the first time.
The Deloitte study noted that in previous years, consumers turned to the Internet to look for deals and compare prices, and then bought in-store. That trend has completely reversed – the 2016 study showed online and in-store purchases comprising an equal share, with 51 percent of respondents in 2017 saying they will spend online, compared with 42 percent in-store. That trend worked well for In Season Jewelry, whose large collection of youth-oriented jewelry appealed to holiday shoppers looking for alternatives to mall boutiques this year.
Shopping malls, and the tenants therein, need to figure out a new strategy to compete against those newer retailers who have found their way in an omni-channel world. Results from Black Friday through Christmas 2017 are already coming in, and the big winners this year include mobile shopping, major online retailers like Amazon, as well as smaller online-only boutiques like In Season. In-store foot traffic declined this year over last year, according to Shoppertrak, which noted that shopper visits declined 1.6 percent compared to 2016.
Youth retailers planning ahead for 2018 will recognize the decreased importance of mall boutiques, and will put resources into mobile-friendly ecommerce shops, increasingly popular retail apps, and consumer-friendly ecommerce sites that take extra steps to replicate the in-store experience such as virtual reality and virtual try-on apps that have gained popularity, allowing shoppers to “virtually” try on clothes and accessories online without having to physically visit a store. Simple innovations like free shipping and a generous return policy close up the final gap between in-store and online – and for 2018’s holiday shopping season, the tipping point will have been reached and online shopping will once and for all be the preferred method of shopping, firmly overtaking the shopping mall, which will never be the same again.FOLLOW NEWSORG.ORG ON SOCIAL MEDIA