Tuesday, November 20, 2012

Retail World Shaken Up as Internet and Wholesale Brands Open Stores

Hunter Communications recommended reading from:
USA Today

Link to Article: 
Retailers such as Spanx, Uniqlo open stores

The retail world is experiencing a shake up and a bit of flux, as brick and mortar stores become internet retailers, internet companies open flagship stores, and established retail brands become wholesalers to other stores. Compounding this is the fact that retail leases of 15-20 years mean that many store brands have realized that many locations have far outlived their profitable lives.

Excerpt: "This holiday season, shoppers will be able to buy Spanx "shapewear" at the brand's new stores, Brookstone gadgets at other retailers, including Target, and Uniqlo clothing on the Japanese retailer's new website.

Retailers and brands are trying a variety of ways to expand. Most have learned from their own and others' overexpansion in the years before the recession. Many once-popular retailers have been closing stores, including Abercrombie & Fitch, Talbots and Coldwater Creek.

Most retailers lease real estate for 15 to 20 years, says Chris Donnelly, global managing director of Accenture's retail practice. Many signed their leases before online shopping saw a big uptick in the past few years.

'At the time the decisions were made, for the most part, they were sound decisions,' Donnelly says. Now, 'most retailers would like a magic wand that they can just wave and get rid of 10, 20% of their store base.' ...

Still, storefronts keep brand names in front of consumers. Retail analyst Jennifer Black, of Portland, Ore.-based Jennifer Black & Associates, says stores aren't only about sales anymore. A 'flagship' store in a major city such as New York is also "about brand awareness and tourism."

That was Uniqlo's plan. The fashion-basics brand now has three stores in New York City, one in New Jersey and one in San Francisco. Shin Odake Uniqlo USA CEO, says last week's launch of Uniqlo.com is a way to satisfy tourists who learn to love the brand while visiting stores but can't buy it back home.

And regardless of the recession, the company plans a rapid expansion in this country — up to 30 new stores a year — as part of its goal of becoming the 'world's No. 1 retailer,' Odake says."

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