Shoptalk recap: Are stores flying or dying?
For the movers and shakers who gathered at the inaugural Shoptalk conference this week, an existential question still remains unresolved: Are stores poised to soar in the digital stratosphere or are they circling the digital drain?
“Stores are incredibly challenged,” said Ron Johnson, CEO of Enjoy, the online services startup he founded this year following his stunning success with the Apple Store and shocking disappointment at J.C. Penney.
“Over the past 20 years, stores have been in a relative decline,” he added, referencing the faster growth posted by Amazon.com and recent reports of soft quarterly earnings and closings from brick and mortar chains.
But Jerry Storch, CEO of Canada’s Hudson’s Bay Company, which operates Saks 5th Avenue, Lord & Taylor, Gilt and Germany’s Galeria Kaufof, as well as its eponymous stores north of the border, would beg to differ.
“That narrative is all wrong; 90.2 percent of sales are still in stores,” he told a packed audience. “Amazon still only controls 1.5 percent of U.S. retail sales.”
Mr. Storch described a new status quo in which nearly all transactions are digitally influenced or involve at least one digital touchpoint. “Eighty-two percent of online retail interactions involve stores at some point,” he said, while “seventy percent of digital interactions create a store visit.”
Mr. Johnson said the business model for Enjoy – which sells, delivers and sets up high-consideration consumer purchases like home automation and electronics – is investing in high-quality hires instead of bricks and mortar.
“Our customers order items digitally and receive a hand delivery and high-quality personal experience, at home,” he said. So far Enjoy is offering services in San Francisco, New York, Los Angeles and Chicago markets, with plans to widen that to 10 markets in its second year. He expects to be “profitable at the market level” by next fall.
The two presentations offered contrasting views about the future of stores. While Mr. Storch’s Hudson’s Bay has been doubling down on high-quality department store brands and seeking to digitally empower them, Enjoy’s Johnson is avoiding brick and mortar like a disease, preferring a high-quality field force who can deliver an in-home experience that is Apple Store-inspired.
- Flying or Dying: Whose View of Stores Rings True for The Future? – Tenser’s Tirades
- Pondering the store’s future in the age of web buying – The Associated Press
Ron Johnson (left); Jerry Storch (right) – Photos: James Tenser
DISCUSSION QUESTIONS: Are brick and mortar stores poised to soar or hit the floor? Do you agree with Hudson’s Bay strategy of adding more physical retail assets and empowering them digitally? Or is Enjoy channeling the future with a pure online service model?