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Sears, Kmart failed to anticipate their customers’ needs
“High-end [retail] is doing very well and so is low-end,” she said. “The middle is vanishing, much like what has happened to the middle class. Sears and Kmart are a perfect analogy to that and the middle market has fled. People have traded down to the Dollar Store, Dollar Tree, Family Dollar.”
Other large retail stores such as Wal-Mart, with its competitive pricing, and Target, with its hip merchandising, have captured the marketplace across income levels, particularly for those looking for a deal but also seeking a shopping experience, she added.
“Target made saving money cool. There has been a shift in value and being savvy, and they made it sexy,” said Ms. Bentz, a former Wall Street analyst at Lehman Brothers who now runs her own advisory firm, Talented Blonde LLC.
The shopping experience, Ms. Knutson said, is key for today’s consumers. “Otherwise, why would we go into Starbucks and spend $5 on coffee?”
The king of the coffee market provided something else, she said.
“It’s that feeling you get, the friendliness, that you can sit down by a fireplace and have a nice chat there with a friend,” she said, noting that older brands failed to deliver on this key detail.
Ann Mack, the director of trend-spotting for the global marketing firm JWT, lauds the hip fashion partnerships Target has forged with designers such as high-fashion house Missoni, whose Target collection sold out amid serious brand-buzz nationwide. It has attracted the upscale and the budget-conscious together.
“They have done cheap chic really well,” Ms. Mack said. “In organizing this high-low collaboration with designers, it really infuses modernity into Target’s brand.”
Other retailers such as Macy's, which have tapped into the aspirational consumer marketplace, also have managed to use technology to keep their customer bases engaged, she said.
In 2010, Macy's flagship store in New York City created a “magic” fitting room, a kiosk mirror linked to a tablet that could provide shoppers with a virtual try-on session. The new look was superimposed on the customer’s image and they could share that with their friends online.
Macy's also created its “backstage pass,” which let customers use their smartphones to scan the codes and read more about exclusive style tips and advice tied to a particular clothing line.
Some retailers are even using their stores as centers for events beyond buying, Ms. Mack said.
“One of the trends we looked at is retail as the third space. As more people shop online, retailers must rethink their physical stores and they’ll have to provide more than just merchandise, interactivity and really good customer service. … It could be a place to relax, to hear someone speak, an event.”
Such personalization of the experience and connectivity with which other brands — even the online-only stores that have taken so much business from traditional bricks-and-mortar companies — have achieved consumer satisfaction left stores like Kmart and Sears out in the cold, Ms. Knutson added.
“We are such a mobile society. But we are still human animals, and people still need each other, so connectivity is very important. Take Amazon. They say: ‘Welcome back, Bonnie.’ Or ‘Here are some other books you might enjoy.’ They have used technology to establish a real relationship with a customer that is taking the place of the old neighborhood store,” Ms. Knutson said.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
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