For all the “death of retail” articles written over the last year, there’s a reason to believe 2018 will be different. Why? There’s a renaissance happening in brick and mortars, where over 90% of all sales still happen (source: US Census Bureau). And one of the major strategies retailers are leveraging is...mashups. No, I’m not kidding.
What’s a retail mashup? Take your current shopping experience and add impact, fun, and relevance by combining it with a complimentary offering, and poof! You’ve got new reasons to want to visit and buy, and deepen relationships with shoppers in the process. Starbucks cafes at Target. RedBox videos at Kroger. Sony store-within-a-store at Best Buy. And of course Amazon and Whole Foods. You get the idea.
The humble mashup presents low-hanging fruit in the search for more and better reasons to come, see and buy. So as we turn the calendar to 2018, welcome to the year of the mashup.
Take CVS Healthcare’s purchase of Aetna. Far more than an experiment, it’s an investment to give consumers convenient access to health services, unbound by normal doctor’s office hours. It takes CVS beyond being a place to get milk, a prescription and a flu shot. Soon it’ll be the store you visit to get better. Customers will become patients, with access medical evaluations and home monitoring, and it should be a shot across the bow of every general practitioner out there. When’s the last time you got a carton of ice cream at your GP’s office?
And retail mashups aren’t just the domain of mega businesses. Take independent grocer Hy-Vee, which recently brought the fast-growing fitness brand, Orangetheory Fitness, inside their stores. It ups the ante on convenience, by matching one great experience with another. Maybe after a high-energy workout people might want to buy some of their healthier foods? You bet. And bringing them together deepens the belief in both as purposeful, innovative brands.
Then there’s American Eagle, for a long time indistinguishable from Hollister and Aeropostale. This October, American Eagle opened a New York location sporting an actual laundromat, where shoppers can do their wash for free while shopping. A bar and lounge overlook Union Square, in case shoppers run out of things to look at while their socks tumble. Mashup indeed.
WeWork has a whole set of mashups, including a fitness offering, school, sports innovation lab, and acquisitions like MeetUp. They recently bought the NYC building Lord & Taylor occupied for more than a century, an entire department store. Lord & Taylor will continue to occupy the first two floors, while WeWork will take the upper floors.
L&T’s products will be displayed within the co-working space, and WeWork customers will have to walk through the store itself to get to their offices. Got a meeting you need to look sharp for? Pop down and get something new.
We all know millennials are driving many of the trends we’re seeing at retail, and this group actually prefers retailers with physical stores. In fact, 82% of millennials think it’s important to have a physical store v 74% among all respondents, according to a 2016 Lightspeed / Mintel study.
The irony is, all the focus among retailers these past few years has been online. It’s true that in this age of Amazon, retailers have been forced to figure out how to deliver a convenient, simple and easy online buying experience. This is where most retailers have been playing catch up, and where so much red ink has flowed. But creating an easy online buying experience has now become table stakes. And online, while key, is still just a part of the total shopping experience.
So welcome to the ‘Year of the Mashup.’ Maybe Urban Outfitters will start putting pizzerias in their stores. Or maybe Patagonia will bring yoga classes to their locations. Whatever 2018’s mashups look like, it’s vital that retailers continue experimenting with ways to bring new relevance, fun, wow, and “I have got to visit that store” panache to the their total shopping experience.
After all, mankind doesn’t live by UPS delivery alone. In fact, the data say it’s not even close.