All retailers have been impacted by online — including specialty retailers. By definition, specialty retailers are not trying to be all things to all people, so their focus is an advantage. However, all retailers still face the same challenges, regardless of category – they must offer products shoppers want and deliver a store experience that satisfies customers.

Product is not the fix — really? At the end of the day, after the store renovations, after the mobile apps, after the gathering spaces and after the showrooming … money finally changes hands based on product. AND the quality of the experience along the path to purchase. But if the product isn’t right, then all the backflips along the path to purchase are for naught. Seems to me obsessing over the right product is the right thing to do. PLUS getting path to purchase right. Path to purchase is now trickier than finding a parking spot at the mall.

The challenge with specialty retail has been to remain relevant, trendy, interesting and up to the challenge of a changing marketplace. Specialty retail fundamentally is the best space to drive experiential retail, however it could quickly go south. As history has proven, once dominant specialty retailers such as Borders Book Shop, RadioShack, Circuit City, and others didn’t last too long once they lost touch with the changing customer preferences, and marketplace shifts.

With that said, specialty retail represents fertile ground for retailers, digital native brands and direct-to-consumer models. The key success factor is to keep the experience interesting. Digital native brands such as Casper, Warby Parker, Bonobos, Away, and others are focusing on the experiential side while driving new product innovations. We should expect the DTC specialty retail trend to continue with Nike’s House of Innovation and others whose store locations not only serve as a place to connect and to sell to customers but also drive new and interesting experiences.

Too few specialty retailers have adapted to the challenges of the digital era. Many think their USP still lies in stocking loads of stuff – something that was true 20 years ago but is no longer valid in an online world where consumers have extensive choice at their fingertips.

In reality, the USP is now in curating and editing a range that is relevant and novel and selling this in an engaging and stimulating environment with strong customer service. Some retailers like REI get this, which is why they do so well. Sadly, many do not.

While I agree with the premise, I don’t agree with the prescription “innovations, from mobile apps to gathering spaces and showroom stores.” The only thing a brick-and-mortar retailer has going for it is its people. Fix the people, fix the customer experience. Ignore it and you end up burning through hedge fund money chasing the latest technology. Fix the people, fix the experience.

In a world where customers can have everything at once, specialty retailers are struggling to create an experience worth the trip (and the investment in full-price merchandise).

It’s more difficult for specialty retailers to get customers to download an app to engage with their brand through mobile than it is for, say… a department store with more comprehensive offerings. Because of this, specialty retailers need to focus on social media imagery and outreach to connect with new age consumers in meaningful ways.

Being a former specialty retailer, it pains me to say that specialty, in general, are the laggards of the retail world right now. Where’s the innovation? Why are they still relying on the next delivery to save themselves ala 1990? Why are there rotating leadership attendants? Why did you not knock off Bonobos? The list goes on and on while meantime, AMZN creates a new private clothing label every week.

Sad to say, but unless something happens pretty quick (and the closing anchor situation doesn’t help at all), this is a category that’s ripe to go either A) all on line MUCH smaller or B) to the Third Wave newcomers, who seem to get it.

I struggle to generalize about the differences between speciality retailers and broader line merchants when it comes to the “disruption” that has (rightly) impacted the industry. In our experience as well as our research, there are broadline merchants that do very well and there are those that fail and the speciality categories are quite the same. If anything, the specialty retailers have an advantage in that they are focused, or by definition, specialized.

The real issue in terms of the degree to which their business is disrupted or disrupting comes down to how focused on customers they are and how this translates into their brand relevance and customer experience.

Show me a retailer in any category that is focused on customers and I’d bet they are doing pretty well, regardless of who and what they are up against.

Too many specialty retailers are laggards when it comes to anything technology or consumer behavior driven. They tend to be product focused rather than consumer centric. They are often oblivious to the online disruption or evolution of marketing technology. They don’t know about the customer who never walks in their door.

They see only what’s immediately in front of them from their knowledge of what’s behind them.

Mom & pop shops with limited costs of business will do fine. But specialty chains without their ear to the ground are going to get run over by the train approaching from the other direction.