Factors Contributing to Recent Retail Store Closures in Canada

By Megan Harman

With retail stores closing down at an alarming rate, retailers must focus on putting customers first and adapting to the digital transformation of the industry in order to survive, suggests a new white paper from digital marketing agency DAC Group.

The new research paper, called Customer-First Retail, explores the factors contributing to the recent wave of retail store closures, and some of the strategies retailers need to implement to remain relevant in today’s marketplace. It features insights from a variety of retail industry executives, such as Diane J. Brisebois, president and CEO at Retail Council of Canada

The paper suggests that the most critical step for retailers to take in the current environment is to make the customer experience their top priority.

“You must be completely obsessed with your customers and with their specific needs and wants so that you can communicate and serve them in an authentic way,” says Brisebois in the paper. 

A key component of customer centricity is personalization. Specifically, customers today want to feel important, special, and valued, according to DAC Group. To personalize the customer experience, retailers must get to know their market extremely well—partly by tapping into data.

(Diane J. Brisebois) 

(Diane J. Brisebois) 

Taking that approach can pay off, the white paper suggests. It points to recent research from The Boston Consulting Group showing retailers that use digital technologies and proprietary data to create personalized experiences are seeing their revenues increase by 6% to 10%—two to three times faster than companies that aren’t using this kind of strategy.

Another element of customer-centricity is engaging customers at the local level, by customizing marketing and communications towards consumers within specific regions. 

The Body Shop is one retailer that has embraced this strategy by using tools such as personalized emails and geo-targeted Facebook ads, according to Jennifer Spencer, VP marketing and corporate responsibility at The Body Shop, who participated in DAC Group’s research.

“It’s important that the customer experience is consistent across the entire brand, but it also needs to be personalized for the local markets as well to ensure that we connect with the communities where our stores are located,” Spencer says in the white paper.

One of the key reasons that many retailers are struggling in the current environment, Brisebois says, is their failure to create engaging and inspiring experiences for customers.

With disrupters such as Amazon changing customer expectations, retailers need to adapt their offerings more quickly than ever. 

“The future belongs to those retailers who constantly test, innovate and really take chances,” says Brisebois. 

Catering to the expectations of today’s customer means providing a seamless omnichannel experience, according to DAC Group. Digital and mobile channels are becoming an increasingly important part of that experience, and having a strategy around those channels is vital, the paper says.

However, the retail experts interviewed for the research paper agreed that a physical presence will also continue to be important for retailers.

“I think it would be foolish for people to dismiss the brick-and-mortar experience,” says Brisebois. 

The challenge for retailers will be remaining agile enough to maintain the right balance of in-store and online operations as customer buying habits continue to evolve. 

“I think the successful retail companies are going to have a store footprint,” says Johnny Russo, associate vice president, e-commerce and digital marketing at Mark’s. “They’re going to have a solid digital platform, but they’re going to have a store foundation, and I think the ones that get that combination right are going to win.”

Megan Harman is a business reporter based in Toronto. She writes about topics including retail, financial services and technology. Megan covers Toronto’s retail industry through her blog Retail Realm (torontoretail.wordpress.com). Follow her on Twitter at @meganmharman.

Canadian Retail News From Around The Web: July 11, 2017

 

 

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