LIMA assembled some of the top leaders and brand experts in the industry at the Licensing Expo 2015 to get a perspective of where the global retail is headed and how will India get there.
In contrast with the core retail, the global licensing industry is also juggling between brick & mortar stores, eCommerce, mCommerce and different permutations and combinations of the three. The present licensees and licensors observed the importance of physical stores over nay consumer channel stating that even the most tech-savvy and gadget freak consumer would favour the touch-and-feel of the product before making a payment.
“If you talk to anybody in the licensing market about the key things on their mind, whether they are licensees, licensors or service providers, it all comes to retail of how do we get the merchandise to the consumer, how do the consumer get to the merchandise etc.,” said Marty Brochstein, Senior VP, LIMA while addressing the concerns of the industry.
The eternal physical store
Addressing the issue of whether the physical stores will sustain in long run, Richard Barry, Executive Vice President, Chief Merchandising Officer, Toys“R”Us Inc opined, “Physical store is still the core of our business as a major portion of our sales is completed in physical stores. While we have very strong digital stores, a vast majority of our global sales is transacted in physical stores.”
According to Barry, the role of a store is extremely important in the business of toys and entertainment. It is also important in building the brands as the stores feature and highlight merchandise in accordance with any upcoming movie or television series, which is something one would not have at an online store and it acts as a magnet to attract consumers to the physical stores.
While some might be solving the online/offline statistics, for the Omni-channel retailer every new offline store refers to an addition in the online sales. “Every time we open a new store, it drives in a hundred thousand dollar business. So we do our analytics carefully to strengthen that relationship,” believes Lisa Harper, CEO, Hot Topic Inc.
So while the other channels of retail may grab a segment of the core retail restricted to physical stores, they cannot lead to the ultimate closure of the offline retail points. Not in a century.
When a click meets a brick
While the panel was of the opinion that physical stores are destined to be there, none shied away from the role of digital retail in driving better sales, with special emphasis on Omni-channel strategies. Barry commented, “The way consumers are using physical stores is changing over the time and the role of the Internet and Omni-channel is clearly having a big impact on it. In some cases, we see consumers moving from online to store, searching and going online to purchase, mainly in case of baby-care products and the ones with high price points.”
The consumer is moving between different channels by either ordering online and picking up at the store or buying at stores and getting it delivered. And digital technologies are helpful in cases when retailers do not keep a particular range of products at store, because not all of the stores are of same size and the inventory stocked depends upon the demographics of the area the store is located in.
Harper of Hot Topic Inc. highlighted, “If the consumers shop both online and offline, they spend about 2.5 times more the time they spend on one channel.”
Dow Famulak, the President of Global Brands Group Holding Ltd. added, “Initially, there was one way to shop; where people came, tried and bought. Now with different channels like mobile, laptop, stores, a consumer has 64 different ways to shop to get to that end purchase and a retailer has to look into all those channels to understand where to start from.”
With retail expanding to different channels, the multi-channel customer has become the darling of the retailers and the latter is trying to make the shopping as seamless as possible for consumers, while still encouraging customers to use all channels as seamlessly as possible.