Retailers are trapped in a vicious cycle with clutter — and it's contributing to the industry's 'dirty open secret'
(Inside Macy's in Herald Square in New York City.Mallory Schlossberg/Business Insider)
American retail is struggling.
One major problem is that shoppers do not want to come into stores. After all, they have the ease of online shopping.
This is not a secret.
In fact, Forbes' Barbara Thau called the decline in foot traffic a "dirty open secret" in the industry.
In other words: Everybody knows about it.
It shouldn't come as too much of a surprise, though.
Amazon is cutting into the market share, to the point that Morgan Stanley predicts Amazon will hold 19% of the entire apparel market by 2020, up from 7% right now. Further, retailers need to give consumers more reasons than ever to shop in stores.
Yet oddly enough, as fewer and fewer people come into stores, retailers appear to become more lax about how their stores look (or the excess inventory just keeps piling up).
(Inside J. Crew in New York City's Flatiron district.Mallory Schlossberg/Business Insider)
It ends up becoming a vicious cycle, turning off more and more shoppers.
"To my mind, there are three issues: ease, inspiration, and image," Neil Saunders, CEO of consulting firm Conlumino wrote in an email to Business Insider.
Further, clutter makes it difficult to shop, makes for an uninspiring experience, and it seriously cuts into the company's brand image, something that many brands — from Nordstrom to J. Crew — have been fighting to keep alive, particularly as incessant discounting erodes their respective reputations as premiere retailers.
"The image is of 'pile it high, sell it cheap’ which, in the case of those retailers, jars with the business model and is at odds with other areas of the shop. This has become a bigger problem over recent years," Saunders wrote.
This gives consumers more and more reasons to shop online — it's much easier, after all.
That's not to say retailers aren't trying to bring people into stores. It's just that lots of the strategies that companies are employing aren't helping; Macy's, Gap, and J. Crew have all reported negative comparable sales in their most recent quarters.
Macy's actually launched its in-store off-price sections to lure consumers into stores.
However, it's only led to lots of disarray — at least, in its flagship in New York City. Look no further than the photo below as evidence.
(Inside Macy's in Herald Square.Mallory Schlossberg/Business Insider)
And Gap, for instance, proudly boasts promotions outside. It's a way to get people into physical stores (especially if they weren't going to buy the apparel at full price, anyway).
(Mallory Schlossberg/Business Insider)
Yet these come at the expense, once again, of disrupting the brand's reputation and conditions consumers to only look for sales.
Macy's, however, seems to get that it needs to latch on to "experiences" to get people — especially young consumers, who value experiences (like fitness, for instance) over "things" — into stores. In Ohio, it's testing out a new format that will include high-end experiences like personal shoppers and a spa.
But it raises a question: If people already don't want to go inside of a Macy's, is that enough to bring them in?
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