Big brand retailers are rapidly announcing closures and liquidations as physical retail space is failing. Events however, are conversely getting traction. Why, in the face of recession, do events seem to have remained unscathed over the years?
Hundreds of mall-based stores are closing down, in what is fast becoming one of the biggest waves of retail closures in years. Shops and malls are becoming sparse, and big brand retailers are adding their names to a long list of those pruning their store fleets.
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Toy giant, Toys R Us for example, has seen its US operations tumble into bankruptcy protection, under the weight of $5bn of debt. The retail behemoth has been serving the children’s market for the past 69 years – what went wrong?
It could be argued that its stores have been in desperate need of modernization for a while. This includes being unprepared for the rapid rise and ease of online shopping and also subscription services that its competitors deliver successfully.
The rapid growth of online sales saw Amazon last year make double the amount in sales of toys and baby products in the US, putting significant pressure on Toys R Us.
With stores at both ends of the price spectrum preparing to close their doors, the battered retail industry has taken more than a few hits. Ralph Lauren Corp. closed its flagship Fifth Avenue Polo store earlier this year, department store Macy’s announced the closure of 68 stores nationwide and the loss of 10,000 jobs, and the likes of middle-of-the-mall chains like Abercrombie & Fitch and Guess are shutting down stores.
One could argue that events such as exhibitions and trade fairs, have married together the concept of retail along with experience. This combination has provided huge opportunities for eventprofs across markets including technology, venues and catering, among others.
What Has Burst The Retail Bubble?
What were once symbols of old-fashioned luxuries or childhood memories no longer resonates with today’s shoppers. As with events, adaptation to today’s market is vital to remaining fresh and relevant.
Legacy will always be appealing to audiences because trust has been built and cemented, but in the world of department store consuming population, if you’re not up-to-date with what your consumers want, you’ll lose them.
Companies that are digitally native and those who embrace the online world, have a bigger advantage over those retailers with legacy who only use legacy approaches.
In the big wide world of human interaction, the population are turning more to online sales and conversing with chatbots as opposed to physical shopping due to ease and convenience. People are also choosing to spend their money more on experiences, than on material goods. A bigger share of people’s wallets are being devoted to travel, restaurants and technology.
Credit Suisse Group AG analyst Christian Buss, said: “Today, convenience is sitting at home in your underwear on your phone or iPad. The types of trips you’ll take to the mall and the number of trips you’ll take are going to be different.”
According to according to Oliver Chen, an analyst at Cowen & Co, retailers should “refocus on customers”.
“Management needs to be fixated on speed of delivery, speed of supply chain, and be able to test read and react to new and emerging trends.”
Events Play An Important Role
Audiences have changed. Generations have changed. Gen Z consumers want products that are experiential, authentic, locally-sourced, environmentally friendly and accessible.
A study by the Harris Group found that 72% of people under 35 would rather pay money for an experience than an object. Companies are fiercely competing for millennial mindshare and finding out what makes them tick.
You only need look at the rise of event technology to see how the events industry is constantly adapting to suit the needs of not only the visitor experience, visitor journeys but also the needs of the event planner.
The likes of artificial intelligence, augmented reality, virtual technology are becoming more and more entwined with our daily lives and our current roles. Organizations such as Apple listen to their audience. Apple, for example. manages to leave people coming back for more by introducing the latest products, software and releases. Companies need to keep being consistent in their ability to adapt for each audience.
Eventprofs work and thrive off a face-to-face model. We work in a people-business and have allowed technology to complement and become part of our strategies and processes.
In the US alone for example, the US meetings industry contributes over $115 billion to the GDP, according to the Convention Industry Council, while also directly and indirectly supporting jobs for more than 1.7m Americans.
Space in the Markets?
It's very hard to change from one form of retail to another, especially If you've built a big organization that knows how to sell products one way. Changing to another way is near mind-boggling. What is key to remember, is that it isn’t necessarily the products that have changed, it's the culture.
In a similar trend to movements online, streaming services including Spotify, Tidal, Apple Music and Netflix have caused earthquakes for artists and companies alike in the marketplaces of music, film and TV.
Artists believe that these services devalues music and media. Music fans are able to listen to entire catalogues of their favorite artists for free in certain ad-supported versions or watch entire TV series online, which gives little incentive for people to pay. Adaptability is needed her.
Whether it is the Olympics, a small conference center or exhibition pop-up, some event venues have seen similar trends to the abandonment of stores’ physical retail space. However, by tapping into the psyche of your audience and finding out what interests them, an abandoned event venue could be rejuvenated and brought to life?
As with any change in generations, companies need to learn to adapt, embrace and retain. With the continuation of event planners and vendors molding their strategies and processes to suit the needs of their audiences and attendees, the events industry is here to stay.
With the rise of online sales and titanic shifts in how consumers spend their money, visits to shopping malls have been declining for years. What is the future of physical retail space? As retail organizations face a perfect storm of rising costs and falling consumer spending, the need to embrace new ideas, cultures and technology is vital for survival. The key is creating the right experience, whether it’s online or off.
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