Is Amazon Killing Retail? Not According to these Guys, Who Say Retail Is Adapting

Just a few years ago, it seemed like a foregone conclusion that brick and mortar retailers were in trouble in the face of the ecommerce revolution. From Amazon to Zappos, online retailers were all the rage, while traditional retailers were being shuttered. Turns out, the eminent demise of the traditional retailer proved to be greatly exaggerated.
As Steve Dennis said, “Physical retail is not dead. Boring retail is.” (Twitter.com/StevenPDennis)

Sure, brands like Sears and Toys R Us have been falling by the wayside, but the retail industry, overall, is not going out without a fight. This is attributable, in large part, to the fact that innovative retailers are making more efficient use of 2 of the biggest 3 cost centers – real estate and labor. With the rumblings of Toys R Us being revitalized instead of sold, what do you think the NEW version would be focused on? Bet I know…

I sat down recently to interview Alan Shor, the president of The Retail Connection (TRC) (http://www.theretailconnection.net/) to learn more about the real estate side of the equation. TRC is a Dallas-based company that, among other things, helps retailers identify the right real estate to lease for new stores and expansion. TRC launched 14 years ago and currently has around 110 employees, in 4 offices, and does work from coast to coast – not only surviving, but thriving.

“Retail stores aren’t going away,” Shor said. “The U.S. is such a consumption-driven country. One of the more interesting statistics I have seen is that the U.S. has three times as much retail per square foot on a per capita basis as the number two country in the world.” He’s not claiming that is the optimal ratio, but TRC’s success illustrates they have figured out what to do with this retail per square foot.

For instance, he notes that online retailers now recognize that a storefront can be highly advantageous to their business. Witness Amazon’s acquisition of Whole Foods. “Online retailers understand that it is important, maybe even vital, that they also have a physical connection with their customers,” he said. The net result is an ever-changing, evolutionary competition in the retail space, making it all the more important that retailers set up shop in the right location.

“In new markets, there are tools you can use to see where your customers are, and then find the real estate that correlates to those customers,” Shor said. “There’s not a common playbook for this. What’s important to one retailer may not be important to the other when it comes to demographics, psychographics, site selection, etc. But those that do it the best, consider all those factors, as well as others such as the visibility of the store, the ease with which a customer can get in and out, and adequate parking.”

There are obvious subtleties involved in this equation, from the real estate side, to the brand awareness aspect, and throughout the overarching customer experience formula. It’s critical that new customers have a good experience when first experiencing a brand, and throughout the in-store journey. “Create a good experience and you’ll have a customer for life,” said Shor. “Create a bad experience and you’ll never get that customer again.”

That’s where Dallas-based Workplace Arcade (https://workplacearcade.com) and others come in. Workplace Arcade (Arcade) applies a patented gamification approach to help businesses boost the productivity of their sales team. That approach is embodied by a SaaS solution that Arcade has created, which, it claims, intelligently gamifies the workplace. By helping employers engage workers, they can create a better a better experience for consumers.

After sitting down with Shor, I visited with David Cherrie, a 27-year-old CEO of Arcade, who came up with the idea while working retail in Australia, where he was born and raised.
In our interview, Cherrie pointed out that “often, we associate ‘fun’ with leisure and a lack of productivity, but that’s not always the case.” From there, he set out find the answer to this question: “If we can actually make the work place a fun place that’s also aligned with productivity, how much more could we do and how much more value could we bring to people’s lives?” Cherrie and his company are on a mission – “To be the reason why over a million people love their job.”

The company gained momentum in 2017, when it ran a pilot program in multiple locations for a publicly traded, experiential, retail brand. It allowed for learning, testing, and moving forward in a very controlled environment. The company concluded that implementing Arcade lifted the profitability by 7.8 percent in this controlled test, confirming that an engaged led to greater profitability.
What’s “The Secret”? (Hint: It’s NOT rocket science)

The workforce – especially those involved in repetitive jobs, in service, sales or process – is a company’s greatest liability. It’s not just the dis-engaged workers, but also those who leave a company’s workforce and the effort required to replace them, or the churn. Cherrie says Arcade can reduce turnover by kore than 10 percent within 90 to 180 days of implementation.
Arcade is focused on re-engaging the employees, leading them to be more positive and helpful with customers. This encourages customers to spend more, while also ensuring customers are leaving with a positive EXPERIENCE!

While these immediate, tangible results are great, the bigger picture is perhaps even more compelling. Arcade provides retailers/large brands with a better understand of who their employees are and what makes them tick. Arcade gives managers insight into the quant and qualitative sides of the business.

As a store manager, you have multiple units that you manage (stores, departments, etc.). Twenty percent of those units are exceeding expectations, while another 20 percent are laggards. The 60 percent in the middle is what Arcade really impacts, Cherrie says. The metrics that Arcade focuses on are the ones that shift that bell curve to the right.

What Can Be Learned from TRC and Arcade?

*Invest in Creating an Experience*

Do your homework before leasing a storefront. Consider not only the residential area around the property, but also the traffic patterns. Who would be your neighbors and what kind of customers do they attract. Are they similar to the customers you expect to attract?

Learn about your workforce. Sit down with each worker and asks them what they like about the job and what they don’t like. Then consider an employee engagement solution, such as Arcade. There are many of them in the marketplace. Some require little or no setup, while others may be more involved. The bottom line is they can arm you with a way to better compete against the onslaught of e-tailers and increase your profitability overnight.


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